Best Debt Management Company

How do I find a good Debt Management Company? I have heard horror stories on these programs. They hurt your credit, they charge you large fees, they can't reduce all interest rates (like Sears and American Express). How is a person supposed to know who to use?

I don't know of any debt management companies that I would recomend but, I can give you some important things to ask when chosing a debt settlement company. Many people confuse debt settlement with debt management. The difference is that with debt management you are hiring a third party to manage your debt. They will reduce your interest rates, but not the balance you owe to the creditor. So, your payments will be less, but not as low as with debt settlement. Debt settlement reduces your debt up to 60%. So, your payments will be much less. Both debt settlement and debt management effects your credit. When your debts are settled your credit score will improve.

For information on what to ask when hiring a debt settlement company click on the link below.
http://www.debtconsolidationcare.com...t-company.html

For Debt Management just look for CCCS in your area. They are non-profit and are regulated by how high their fee can be. DM Companies are funded by the CC companies so they will get you lower interest rates. You need to understand what your monthly payment will be and how long you have to make it. Most people fail a DM program as they cannot keep up the payments for such a long time. Your credit is only affected in that you cannot get credit while in a DMP.

Debt Settlement is another animal altogether. With DS you stop paying your creditors and instead put the money in a savings account. You wait from 90-180 days to settle the account for much less. Your credit is hurt much worse as you will have late payments and possible over-limit marks. You will be charged fees for this as well along with interest so your total debt will continue to increase as you stop paying. After 180 days the debt will be charged-off and most likely sent to a collection agency. DS can be done but is serious business and you need to understand everything at stake. Take a look at my blog for a breakdown of different ways to get rid of debt.

Debt settlement is for people who are unable to pay their debts due to their circumstances, but want to pay back their debt as best they can. Most people who enter a debt settlement program are either behind in their payments or about to go behind in their payments. It is not for people who can afford to pay their debts, but would rather not. The program gives people a way to settle their debt without declaring bankruptcy. Everyone's circumstances are different. In order to determine what is the proper approach that should be taken, a complete financial analysis needs to be done to ensure a proper decision is being made, whether it be for bankruptcy, debt settlement or debt management. Until that is done there is no way to make an informed decision.

I have been in the banking industry for many years and I respectfully disagree with the previous post. Debt management is viewed by underwriters, who make the decisions on who to lend to, as almost as negative as bankruptcy. The negative effect of debt management will most likely effect your credit far longer then in debt settlement for two reasons. One is that debt management usually takes much longer to pay off the debt because you are paying the debt in full. So, for as long as you are in the program, which can be many years, your credit is affected.
Second, many people can not complete the program because the payments are not signicantly lower then before they started the program. So, now they have the bad mark of debt management and unpaid.

With debt settlement, your debt is settled in anywhere from 12 to 40 months (with our company). After the debt is settled your credit will begin to improve; far less time then with debt managment. Again, each person's circumstances are different. Each course of action has it's own merits, Debt Settlement may be right for one person, but bankruptcy or debt management may be right for another person.