What is the difference between debt management and debt settlement?
Debt management is usually a nonprofit agency that helps you come up with a repayment plan to pay off your debts.
Debt settlement is for-profit and negotiates down your debts on your behalf with your creditors so that you can reduce the amount of debt that you owe.
You may wanna consider debt management if you wanna be educated on your finances and have an agency work with you to come up with a plan to help you get out of debt, and you have the financial resources to do so.
You may wanna consider debt settlement, if you’re in financial hardship, you have a significant debt amount and you don’t wanna file bankruptcy, and you wanna reduce the amount of debt that you owe as quickly as possible.
Enrolling into a debt management program may affect your credit score depending on what the program asks you to do, such as closing credit cards, et cetera, et cetera.
Debt settlement will affect your credit score, and lower your debt-to-income ratio.
And once your debts are completely resolved, then you can work on getting your credit score back up.
To conclude, if you are not in financial hardship, then enrolling with a debt management program may be worth considering.
However, if you are in financial hardship, and struggling to make your minimum payments, then you may wanna explore debt relief or debt settlement as a good option for you.
If you would like more information about debt relief or debt settlement, visit us on our website at alleviatefinancial.com.
How Debt Relief and Debt Settlement Work?
Debt Relief and Debt Settlement is a negotiated agreement by which a creditor accepts less than the total amount owed to legally satisfy a debt.
Settlement programs typically last 24-48 months and are highly dependent on factors such as delinquency, creditor policies, the number of accounts, and the total dollar amount of the debt.
Debt settlement services have existed in some form since the advent of debt itself.
The modern industry has seen significant growth in the 21st century, largely due to the easing of lending requirements by financial institutions.
In addition, today’s borrowers are taking on significantly more debt than their parents had at a similar stage in life and are subsequently paying off that debt at a slower rate.
[ECONOMIC INQUIRY, 2013]
These large debt loads and slower payoffs, coupled with today’s high-interest rates, mean that without intervention many borrowers could be paying off these loans for decades.
While there are a multitude of interwoven causes for these trends, industry experts point to increased access to larger amounts of credit coupled with a reduction in the social stigma of being in debt.
Potential clients speak with a certified debt specialist regarding their financial situation. The debt specialist evaluates the caller’s financial situation and suggests the optimal debt relief strategy. Clients choosing to enroll in our debt relief program are then guided through the enrollment process. Signed enrollment documents are processed and the new client receives a call from our team of dedicated account managers to welcome them to the program. Account managers are available 24/7 and remain in active communication with clients throughout the program. Our talented negotiations team begins working on client accounts immediately. When settlement offers are received they are first reviewed for accuracy and then presented to clients for approval. This process repeats until all client accounts have been settled.
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Your debts will be resolved in a few short years or even months so you can have a new beginning financially.
