Debt Management And Credit Counseling

There are a thousand and one commercials out there on debt management. You cannot watch television without seeing an ad for debt management or debt settlement services! This reflects how important debt management actually is.

The reason is because many people are struggling with more debt than they can afford to pay. Their mailboxes are full of second, third, and final notices. Their phones are ringing off the wall with calls from bill collectors.

People can start struggling with debt for many reasons. There are many reasons for this such as job loss, medical bills, an accident. This stuff happens all the time.

Sometimes people find themselves in deep debt because of their careless spending and oftentimes find themselves drowning in their sea of debt because of their inability to plan and budget. There was a time when debt management companies were more like social services than for-profit businesses. These debt management companies were nonprofit, and they were known as consumer credit counseling services (CCCS) affiliated with the National Foundation for Credit Counseling (NFCC).  But you could also go with debt settlement as well.

As more and more Americans became deeply embroiled in debt, companies began to spring up that are generally classified as debt management companies or debt settlement companies. These businesses do charge fees and their object is to make a profit.

Debt management agreements with debt management companies really are not for everybody who has a debt problem. The best way to assess for yourself whether a debt management company can help you is to add up all of your payments, and if you unsecured minimum payment obligation exceeds 20% of your take-home pay, then you might need their services.

Remember that only unsecured debt is covered by debt management companies. Unsecured debt is generally credit card debt. Your mortgage payment and your car payments are not unsecured debt.