Debt Management

Debt management. To be sure, the phrase has been in use for some time
now and the Federal Trade Commission reports that there is a fast growing area
of complaint involving the so-called Credit Management or Debt Management
industry. But what is debt management anyway? And why do people consider it as
either potentially lucrative or downright hazardous path to follow?


The term debt management is actually an umbrella for a large group of
debt-environment functions and activities. Debt management involves one or all
of the following: debt reduction, consolidation, negotiation, settlement,
bankruptcy, credit repair clinics, and even deciphering credit reports. To have
some inkling as to what debt management really is, let's first define these few

  • Credit Repair Clinics - These are services offered by institutions
    that are said to help you fix your credit. Nolo Press and other notable
    consumer groups for debt management issues strongly advise against credit
    repair clinics. They say that a lot of these clinics are illegal. Some of their
    actions include stealing the credit files of folks under the age of 18 or the
    credit files of those who have died or live in far away places. Some have also
    been said to break into credit bureaus and change files. Still, others suggest
    you to start a new IRS Employer Identification Number (EIN) which is illegal
    and prevents you from earning Social Security benefits. But the bottom line of
    these so-called debt management operations is that they can't do anything that
    you can't do for yourself.

  • Deciphering Credit Reports - It can be a bit intimidating trying to
    study credit reports. However, if you take it slowly, you can get through it.
    Debt management involves some bit of understanding of credit and credit
    reports. If you want to correct your credit, then you need to understand it

  • Debt Reduction - Debt reduction is just that - reducing your debt.
    This is perhaps the most logical way to manage your debt. Reduce your debt so
    you'll have little trouble with it.

  • Debt Settlement and Negotiating with Creditors Yourself - There's no
    doubt that debt management can be a daunting task. Although settling debts
    might be best relegated to professionals, there is still nothing like

Debt Management vs. Bankruptcy

The differences in impact between debt management and bankruptcy are
debatable. Deciding which course of action is best for you can be very tricky.
This is because there are so many factors involved and these are often dictated
by external circumstances. In theory, we all know bankruptcy to be a method
used by people when they are absolutely unable to repay their debts. However,
we known that this is not always the case in reality. The idea therefore is to
find out if it is a temporary or permanent problem. Then and only then can
start deciding which is best: debt management or bankruptcy.

Tony Forster has a keen interest in living debt free having been "up to his ears" before realizing the need to take control. He has compiled an online financial article resource at