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, which then allocates out the repayments to your creditors.
So, how can debt management help you? First of all, by hiring a debt manager, your emotions are removed from your debt situation. While caught up in the present anxiety of debt distress, it may be difficult to see a way out and to make good judgments. Handing over the management of your financial situation may be the best first step out of debt that you can take.
Secondly, the debt manager is professionally trained in how to deal with situations like yours and in how to resolve problems such as yours. He or she knows what works and how to make the known solutions work for you.
A third way that debt management can help you is by simplifying your finances. As previously mentioned, generally the debt management company can, for all intents and purposes, consolidate your debts. Only having one due date, one payment and one interest rate to manage each month can be very helpful in an overwhelming and confusing situation.