Mike Della
Lindenhurst
Debt management by definition is actually the agreement between a debtor and creditor to come up with a workable plan of repayment to eventually settle money owed. But because of the rise of overwhelming debt of individuals, debt management has also come to mean a change in the consumption and asset management of the average Joe. In other words, debt management is spending less than what one earns.
But that is only applicable when debts are not yet overwhelming. For the average Joe weighed down by mortgages, car and insurance payments, credit card bills and utility bills, simple spending less is no longer enough. Many turn to debt management companies who will promise to provide a plan that will reduce a person’s debt liabilities. However, not all debt management companies can deliver what they promise, and are more intent on improving their cash position rather than their client’s.
There are some credit counseling organizations that provide valuable advice and information that will help a financially distressed person to overcome their difficulties, but due caution should be taken when engaging their services. The Federal Trade Commission has cracked down on debt management companies who claimed they are nonprofit, but charged high fees or required clients to deposit their money with them with the false promise to disburse these according to an agreed debt management plan that will get them out of the hole.