What is Debt Management?

The payments in a debt relief management program can be significant. It is important to be aware that:

1. Sticking with consumer debt management requires both responsibility and commitment. Debt management consolidation plans generally last 5 years so you will need to commit to your debt management solutions plan and make the required monthly payments.
2. With a debt relief management plan, your principal balance will not be reduced.
3. Your required monthly payment in a consumer debt management plan will be only slightly lower than the regular minimum payment
4. During your credit debt management plan, you’ll be unable to secure additional credit, including a car or home loan.
5. You will most likely need to make some lifestyle changes in order to be successful with your debt management solutions program.
6. There are monthly fees involved in being in a plan to manage credit card debt. These fees can add up over 5 years.
7. Issues you encounter during the credit card debt management process, such as medical issues, divorce, or losing a job, will make it challenging to meet monthly payments and other expenses.

Do Your Homework: Research the Consumer Debt Management Agency

While a credit debt management companies can help you manage credit card debt, it is important to do a little homework. It is imperative to make the right choice for you when it comes to credit card debt management.

Before making a choice on how to resolve accumulated credit card debt, you should thoroughly research not only your different options, but also the debt management agency itself. A few things to take into consideration when selecting the right debt management services for you include how wide the range of services and individualization the debt relief management agency offers. You want a credit card debt management company that will take the time to analyze your personal financial situation and offer you a choice of plans that would work best for your own debt relief management. You also should look at the history, background and success of the consumer debt management agency. It is also important to ask a debt management solutions agency what their fees are so you know those up front.

Debt Relief Management Terms

Going through a debt management consolidation program requires diligence and commitment. You’ll also need to know a few terms related specifically to credit card debt management.

1. Debt Settlement: It is important to know that there is a difference between debt management and debt settlement. A credit debt management plan lowers your interest rate while a debt settlement lowers your principal balance.
2. Concession Rate: the term used to describe the low interest rate that a debt management services is able to secure on behalf of debtors from credit card companies.
3. Debt Management Plan (DMP): a class a consumer is enrolled in as part of the consumer debt management process. Under the terms of the credit card debt management plan, the debt relief management agency will collect a monthly fee from the consumer. It will also collect a “fair share” payment from credit card companies.
4. Fair Share Payments: revenue that the debt management services agency earns from credit card companies.