What is the difference between debt settlement and debt management?

Debt settlement and debt management are two forms of debt relief services. Both services help individuals who find themselves in financial distress. The primary difference between the two is that debt settlement involves negotiating with creditors to reduce the amount of debt owed, while debt management works to lower the cost of interest and fees charged by creditors. Debt settlement is a type of debt relief option where an individual is able to negotiate a reduction in the amount of debt owed, usually with the assistance of a debt settlement company. The settlement company will contact the creditor and attempt to settle the debt for a lower amount than what is actually owed. In some cases, the creditor may agree to forgive the entire debt or reduce the total debt owed in exchange for a lump sum payment. Debt management, however, focuses on helping individuals make their debt payments more manageable. A debt management company will negotiate with creditors to reduce the amount of interest and fees being charged to reduce the overall cost of paying the debt. These companies will also help to create a budget and create a payment plan to help the individual pay down the debt. Additionally, debt managment companies may contact creditors on behalf of the individual to negotiate other concessions such as lower interest rates and extended payment timelines. Ultimately, debt settlement and debt management are both methods of debt relief that can help individuals struggling to pay off their debts. However, debt settlement typically results in a reduction of the total amount of debt owed, while debt management works to reduce the cost of paying that debt.

Related FAQs

Are there any discounts available for debt settlement?
Are there any ways to avoid paying for a debt settlement service?
Is there a minimum debt amount to qualify for debt settlement?
What is the average time frame for debt settlement negotiations?
How do I make sure I receive a fair settlement from my creditors?
How quickly can I expect to see results from a debt settlement?
How can I make a debt settlement offer more attractive to creditors?
What is the difference between debt settlement and debt consolidation?
Can creditors refuse to negotiate a debt settlement?
Are there any alternatives to debt settlement?

What is the difference between debt settlement and debt management?

Related FAQs

Related Blog Posts