Financial Resource

Have your bills overwhelmed you and you have no idea what to do? Don’t worry there are two options immediately available to you – debt management program and debt settlement. You probably don’t want to have to choose one of these choices in your lifetime, but let’s take a look at them anyway.

Alright let’s look at debt management. Debt management is a program offered to people where a company takes all of your debts and combines them into one big sum. After this combining they work out a monthly payment that you can afford and you pay this till the debt is gone. All the major credit card companies will work with a debt management program rather then see you go into a collection agency.

There is one catch though. During this you cannot apply for new credit of any kind anywhere. This is done to keep sleazy people from messing around and trying to take advantage of the system. Debt repayment program can take up to two to three years to pay back, depending how big your debt is.

Debt settlement is where they take all of your debts and make you settle for a large lump sum. This makes it so they will stop adding interest fees but you need to be able to afford the giant lump sum. This process can damage your credit depending on the size of the debt. If you cannot make it usually you are turned over to a collection agency, or your goods are repossessed.

Making either of these choices is taxing on an individual. If you are wondering how to avoid this the answer is simple, just keep your bills paid on time. Even though bad things do have a tendency to happen when we are least prepared. Just keep in mind you do have these two choices if things get really bad.

The primary difference between these two programs is what the end up doing to your credit. A debt management program usually leaves you in better shape with an easier time of restoring your credit while a debt settlement plan usually leaves your credit in a blasted wreck and takes a while to restore. Make sure to think carefully before you choose.

To wrap this article up choosing a debt management program versus debt settlement is a difficult task. No one would even give these debt relief options a second thought unless they were in some kind of trouble.

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