Debt Management Companies offer debt management plans, which are helpful if you are in debt trouble and need advice. A company may offer you a debt management or debt negotiation, which are not necessarily the same things. Debt negotiation often involves the management companies negotiating settlements with your creditors. This result in less debt for you to pay back, but it is very damaging to your credit. It is possible that the company administering your management plan goes out of business. You need to contact your creditors to make payment arrangements. You might be allowed to keep the same terms as under the plan, but it is not necessarily. If you fall behind or miss even one payment, creditors may drop out of the program, raising your interest rates and charging late fees.

Before you enrol in a debt management plan, you may be able to negotiate reduced interest rates, waiver of fees, and other arrangements on your own. This way, you may end up saving some money.

Debt companies will specify the number of payments required to pay off the debts through the contract. If you miss one or more payments, it will take longer than the contract specifies.

Debt Management Companies cannot remove negative information from your credit report. It is going to stay on your report for good. Therefore, if a company promises to be able to do this, you must avoid doing business with them. Once you enrol in management plan, your credit report will still show the previous late status. Your current report might be improved but your previous information on it cannot be deleted. Creditors will also often report that you are in a debt management program, which may affect positively your credit. You can build your credit by simply continuing paying your bills.

Debt management is just one of many ways to settle debts. It can save you a lot of trouble with your debt problems by cutting down on the number of bills that have to be managed. If you have multiple bills you cannot manage efficiently, or if you have tried out a self-repayment plan that did not work, then you need a debt management plan. The best solution is to get professional intervention to assist you. It will free you getting collection calls, and even better, it will lower the interest rate on your bills.