What Is Debt Management?

What is debt management? Debt management is basically debt consolidation or credit counseling. If you have heard the term CCCS it simply means consumer credit counseling service. If you are facing a mountain of bills that you can no longer handle, you may want to consider a debt management program.
Even though the debt management industry has received some bad marks in recent years, there are plenty of nonprofit organizations that still remain focused on their mission. The mission of debt consolidation firms is to help people get out of debt. They also provide education on how to stay out once someone gets out of debt. Some organizations go so far as to teach good interviewing skills, budgeting, saving money for a home etc.
The National Foundation for Credit Counseling or the NFCC estimates that nearly two million American households are counseled about their debt every year. What brings people to a debt management firm is debt of course. Some people just seek financial advice with their budget or others with to enroll into a debt reduction program. Most have similar stories. Usually there is a life changing event such as a divorce, death or even a job loss. These events can happen quickly and often have long term effects.

I want to file Bankruptcy
If you want to file bankruptcy, you will now have to enroll in a credit counseling program. It is no longer optional. This change took place in 2005 when President Bush signed the new bankruptcy laws. Credit counseling should be a last resort to solving your debt issues. You should always explore other options first. You may want to speak with a family member about a loan or even talk to your banker about a debt restructure. A 401k may be an option. Paying the taxes on a 401k is not fun but not having peace of mind over your debt may be paying an even higher price on your health.

Credit Counseling Options
Getting out of debt may require you to be a little creative. If your credit score is still pretty good, you may want to consider trying to get one of those 0% credit cards or even get a tax deductible home equity loan. A HELOC or home equity loan will dramatically lower your payments. Keep in mind that the payments on a home equity line of credit are only interest only. You will need to add some principal to those payments if you ever wish to get the debt completely paid off.

How Do I Choose A Debt Counselor?
Finding a good and reputable debt counselor can be challenging. It probably is not something that you want to talk to your friends and family about. So for many people getting advice will come from outside and less trusted sources.
Find a good non profit debt counseling firm. You already spent more than you had why would you want to keep doing that. The big thing you want to watch out for is excessive monthly maintenance fees. Even though it is a non profit company, they are still in the business to make money. You may want to compare a few different companies to see what their fees are. You should not have to pay more than $75 to sign up for the program and no more than $50 a month to be in the program.
Getting out of debt is a journey. Just be sure to allow yourself to be a human being and not beat yourself up too much. People make mistakes, its just part of being human. Do not quit, stick with your debt management program and in no time you will be out of debt.