Debt Relief Companies » Debt Management Solution

Is a Credit Card Debt Management Solution Right for Me?

Scott — Fri, 21 Sep 2007 16:27:25 +0000

People visit this site to learn more about their debt relief options and they want guidance on which solution is best for them. Unfortunately, there is no “one size fits all” answer to that question but generally here is when you should consider credit card debt management as a solution for you.

1. You have more credit card debt than you are comfortable with
2. You find that you are only making minimum payments and your balance is increasing every month
3. You feel that the problem can still be brought under control if you could just get some help to reduce the rate at which your debt is piling up
4. Some counseling, budgeting help, and a modest decrease in your monthly payment will help you tremendously

In other words, you have a problem but it’s still manageable. A little financial education and discipline mixed in with a consolidated debt payment and lower interest rates could help you get your situation under control. True? Then consider a credit card debt management solution.

For many people, the greatest benefit in signing up for a debt management company plan is that you have someone to help you discipline your spending habits. Your counselor is there to help you and “coach” you as you need it, when you need it. For many people, this is invaluable and is all they need to stop their debt from accumulating beyond what they can ever pay off.

If it’s too late and you need more than just a little help on your monthly credit card payments then your problem may exceed the help that a credit card debt management solution can provide and you may need to start considering a debt settlement solution.

How can I be certain that I won’t end up in greater trouble by using a debt solution company?

Scott — Sat, 18 Aug 2007 20:56:23 +0000

Actually, like everything in life, there are no guarantees. Debt solutions have varying degrees of risks with debt settlement being the riskiest and debt management being less risky. Debt settlement is a process that credit card companies generally dislike (of course) because they prevent them from getting all their money back. For this reason, in certain instances, some creditors can get nasty and there is always the risk of them filing lawsuits to try and force you to pay them everything you owe.

However, most people who enter debt settlement do so beacuse they are way behind and their income can in no way pay for the debt they have accumulated. In this case, often, the credit card companies would rather get something vs. nothing (as in the case with bankruptcies).

A good way to think about it is, if you REALLY are in trouble (and not just trying to pay back less than you owe) AND you work with a reputable and honest debt settlement company, then odds are you will greatly reduce your risks of a lawsuit and debt settlement is a solution you should explore.

On the other hand a debt management solution is encouraged by credit card companies as they look at these services as helpful to consumers before they get in major financial trouble and start having to consider debt settlement. In debt management the creditor also get almost all of their money back (although over a much longer period of time) so they prefer consumers use those programs. Therefore, the risks are less with debt management but you will pay more and it will typically take 5-7 years to get out of your debt.