Debt Management vs. Debt Settlement
Getting out of debt can be a tricky proposition. There are a number of programs that purport to help work through your debt issues, but you need to be careful. While some can provide needed assistance, others are little more than scams. One of the distinctions you should make when deciding what debt plan to go with is that between debt management and debt settlement. It is important to note that your mortgage obligation is usually not included in these types of arrangements.
Debt Management
With debt management, you have a third party help you create a repayment plan for your debt. You pay down the principal at a reduce interest rate, and possibly with your fees waived. Interest you have accumulated to the point of debt management is usually added to the principal. You make one payment to the (hopefully reputable) debt management company, and the company makes payments to your creditors.
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