Debt Management Programs & Debt Settlement Plans – Financial Relief Options

Have your bills overwhelmed you and you have no idea what to do? Don’t worry there are two financial aid relief options available to you – debt management programs and debt settlement plans.

Of course, if given a chance, you don’t want to have to resort to either of these financial relief programs in your lifetime.

Debt Management Programs. Debt management is a program where a consumer credit counseling service company combines all of your debts into one big sum and works out a monthly payment that you can afford. You pay this lower monthly repayment until all 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 the course of your debt management program, you cannot apply for new credit of any kind anywhere.

Debt Settlement Plans. Debt settlement differs from debt management as instead of paying a monthly payment, you pay the whole amount up front.

In order for this program to work you have to have a large amount of money on hand for a one time sum. Inability to meet this requirement will probably end up with you getting calls from a collection agency.

If neither of the debt relief programs is what you want, then just keep your bills paid on time.

The primary difference between a debt management program and a debt settlement plan is whether you credit score will get hurt.

So, will joining a debt management program or debt settlement plan negatively affect your credit score?

Credit card debt management program usually leaves you in better shape with an easier time of restoring your credit while while debt settlement usually leaves your credit in a blasted wreck and takes a while to restore.

As you know that bad things do have a tendency to happen when you are least prepared, just keep in mind you do have these two choices.

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