Debt management means that you hand over the management of your debts to a hired third party. This person sums up all of your debts, figures out what you can actually pay per month, contacts your creditors to negotiate a different repayment schedule, often involving reduced payments and frozen interest rates, and basically consolidates your loans into one. You make one monthly payment to the debt management organisation, and it then doles out the repayments to your creditors.
Unfortunately, getting an idea of the cost of a debt management program is difficult. For all of the ?easiest? to use debt management programs on-line, you must first supply quite a bit of personal information before learning what the fees charged are.
If you choose to work with a debt management company, do your homework. Where there is a need, there is a scam. Get references from those you trust, including the Office of Fair Trading, and do this before divulging any of your personal information. And make sure to get all of the terms in writing. Whatever kind of debt management solution you choose, you want it to lead you out of debt, not further into it.
If you are in serious debt trouble, this form of debt management may be your best option. However, make sure to study all of the choices available to you before making a decision. Debt consolidation, debt relief, individual voluntary agreements (IVAs), home equity loans, filing for bankruptcy, and simple budgeting may work better for you.
If you feel that you can do the debt management yourself, by simpler methods, Bankrate.com has a helpful article from March of 2008 to get you started. They suggest that you use ?all means? necessary to get out of debt, even to the point of ?working three jobs.? The writer of this article suggests sticking to cash and trading credit for debit cards as other simple ways to work on debt management without enlisting the help of a third party.