Debt Management Help

The concept of debt management as mentioned above is an important service that is being rendered by counselors and consultants to people who have been caught up in the evil cycle of debt in the economic recession. Apart from the economic recession, excessive credit card usage, charges and unfair processing plus subprime lending loan is also often blamed for the huge mountain of debt that United States citizens are facing today and hence need to turn to debt management for aid.

Debt management services are principally provided by financial experts, accountants and consultants and such services are found in several places. You can also look up the Internet to get the service in your locality. However please note that there are considerable number of spam, fraudulent and misleading advertisements that might lure you into fraudulent transactions. In the following paragraphs, an overview of the debt management as a service has been provided. Apart from the actual borrowing, credit report and credit rating system plus late fees, fines and charges, have proved to be a very big problem.

The Concept
The concept of debt derangement is simple, and it is principally a service dispensed by the consultants to their clients. Clients may include, all victims of unfair trade practices and recession or even shopaholic. The debt management companies, basically help you to get out of debts using two principle methods and in some cases further consolidation debt assistance. Hence the debt management plans, are mainly services that help you to move a mountain of debts. The counselors or consultants being experts in the field of finance, help you to plan out the repayment schedule and in the entire process also help you to minimize the volume of excessive charges such as late fees and fines.

total debts = actual amount borrowed + APR or interest + late fees and charges + projected late fees and fines for later fiscal periods

The debt management plan will help you to repay all the debts with minimal possible, APR's, late fees and projected fees. Note that there are some significant debt management plan pros and cons, with a significant drop in credit rating being the biggest disadvantage.

Credit Counseling
In debt management, credit counseling is the first step to recovery. The counselor and consultant sit across the table with you and all your debts are analyzed. The consultant will tell you about the working of your debt and will also explain you all possible reparations. Then with the help of regular pro-rata calculations, he will sketch out a good, debt management plan, which would include, a structured repayment schedule that has minimal fines, fees, interests and APR's. If the debt is reasonably good, or less, then counseling does the trick, however if it is huge, further measures have to be taken.

Debt Negotiation and Settlement
The concept of debt negotiation and settlement is the second part of the plan. Instead of just giving debt management tips and plans, the company and consultants, negotiate a reduction of the total debt amount, knocking off some fess, fines and charges. Some debt settlement programs make claims in advertisements, by advertising a record of 70% reduction of debt. The bad part of the negotiation and settlement is that the credit rating and credit sore of the person come crashing down.

Debt Consolidation Loans
Debt assistance programs in certain cases also provide a certain loan known as debt consolidation loan. This loan is calculated as follows...

consolidation loan = total amounts owed + interest and APR's + late fines and charges - negotiated settlements

This debt consolidation loan is basically a long-term loan which is also a secured loan and tends to have a low rate of interest. This loan is then repaid to the debt management company who acts as a lender and originator.

Now the question is, how to choose a debt management program? The answer is simple, just get to know the services offered, licensing and documents that are offered and so on and so forth. You can also avail the services of a reputed debt management company and make an informed decision.