Article by Peter J. Wilson

Debt management helps in managing debt. It is the most sensible way to live without debt. None of us ever plan to get into debt, but the only way to avoid it is to learn proper debt management skills.

Start by making an expense list. You then have the option of sticking to that budget, getting credit counseling from a good firm, getting debt consolidation, or declaring bankruptcy. The amount of your debt, your level of self-discipline, and your potential income can help you decide what is best.

The first step is to contact your creditors, explain your circumstances and try to arrange a repayment arrangement that is acceptable to both of you. However, the problems start when your debt goes to a debt collector. They collect, do not like negotiating, and any dealings with them can prove to be very nasty. You are better dealing with your creditors immediately as some will be glad to lower your payments or even stop them for a short while. Others your loan’s time period and lower your monthly repayments.

If you prefer to get advice about negotiating with creditors then you need to find a reputable credit-counseling firm. They can work out a consolidation plan that takes into consideration your personal situation that reduces your monthly payments. Also they can negotiate with your creditors to get a more reasonable payment plan and lower your interest. However, you will have to pay a fee for these services.

The other option is to consolidate your debts into one big loan. However, this way relies heavily on your ability to work within a tight budget and the amount of self-discipline you possess. This is the cheapest form of debt management in a sense.

Debt management through reputable companies can be free-ish. They can help with debt management skills that eventually will help you eliminate your debts. However, each company has different methods and it is your choice as to which works best for you.

The term ‘free’ gives with debt management firms means that every penny you put towards your debts goes toward your debts and not any administrative, deposit or set-up charges. All the advice and services you need can be done via phone, email or mail. Of course there are varied options that are open to you. If your debt and financial circumstances are very serious, using a debt management firm, which takes a direct approach, can be helpful. A debt payment plan is created whereby you are obligated to make monthly deposits in a trust type account. The firm will also handle negotiations with creditors to reduce monthly payments and interest rates.

The final option is the non-profit counseling services. They are charitable organizations that analyze your personal circumstances, create a workable budget, and give you free credit counseling, but they don’t negotiate any terms with creditors. However, whichever service you choose, you can only benefit if you follow their advice and change how you spend your money.

About the Author

Being especially interested in assets and money management, Peter J. Wilson has been writing numerous publications on this specific subject. His publications on assets and managing credit card debt are found on his web publications.

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