What is the difference between debt settlement and debt management?

Debt settlement and debt management are two common methods used to help individuals in Pennsylvania who are overwhelmed with debt. The primary difference between the two is that debt management focuses on the repayment of the debt, while debt settlement seeks to reduce or eliminate the amount owed. With debt management, individuals enlist the help of a debt counselor. The counselor negotiates with creditors to arrange for a reduced monthly payment that the individual can afford. The individual then pays the reduced amount on a regular and timely basis until the debt is paid off. Debt settlement, on the other hand, involves the individual or a lawyer negotiating a settlement with creditors. This involves the individual paying a lump sum payment that is lower than the amount owed. The creditor agrees to forgive the remaining balance of the debt, and the individual’s credit report reflects the debt as “settled.” The main benefit of debt settlement is the amount of debt that can typically be eliminated. Although debt settlement may have a negative impact on a person’s credit report, it can help those who are unable to pay off their debt in full. It can also be quicker and cheaper than debt management. However, debt settlement can also be a risky option. It is important that individuals do their research, and consult a lawyer or financial expert who can help them make an informed decision. Furthermore, individuals in Pennsylvania should make sure that they are familiar with all of the applicable laws and regulations before beginning any debt settlement process.

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What is the difference between debt settlement and debt management?

What is the difference between debt settlement and debt management?

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