Effective Debt Management Services Tips If your debt management service negotiates reduced interest rates or balance reductions on your behalf, (Which they very likely will do) those negotiations will likely …
Category: Debt Management Service
What is a debt management service and can one help you with your financial problems?
Generally speaking, a debt management service acts as a middleman between you and your creditors, obtaining a single monthly payment from you and then paying off various debts on your behalf. In essence, it is the same a debt management program, which is explored in other areas of this site. Some people just refer to it differently.
Many lenders are willing to negotiate with these organisations or companies on your behalf because they know that a professional helping should start to bring the situation under greater control. This greater control and responsibility with money will hopefully, in the long term, help the lender to recover more of their money more easily.
Such a service will receive a commission, usually a percentage of your monthly payment, and possibly additional rebates from your creditors.
Debt management companies may be willing to make payments on all of your debts, but their services relate primarily to unsecured debts, such as credit cards.
These services are not the same as ‘credit counseling’, and it is not suitable for every person who is in financial distress. People whose debt is primarily secured, for example in the form of a home mortgage or car loan, will usually find little benefit in using a debt management service.
These pages will explore their workings in more depth.