Debt management is a term that applies to any act of trying to get your debt under control and become responsible for repaying your obligations. You can develop your own debt management plan, or you can hire a financial professional.
Monthly Budget
One of the ways to manage your debt is to create a monthly budget that allows you to compare your income to your bills. Prioritize your bills by due date, and tailor your spending to meet your monthly obligations.
Debt Management Firms
If you are unable to organize and manage your own debt, then you can contract with a debt management firm to help you stay current on your bills.
Features
A debt management firm will set up a monthly installment plan where you deposit money in a pre-determined account, and then the organization pays all of your creditors for you. A fee is added to your bills each month to compensate the debt manager. This fee varies depending on the company, and you should ask about the fee before signing any agreement.
Warning
The Federal Trade Commission suggests checking your billing statements each month to make certain that your debt management company is paying your bills as scheduled. If your bills are not getting paid, then contact the debt company. If you get no help, then contact your state attorney general's office.
Considerations
The Wall Street Journal suggests finding a nonprofit debt management company to help lower your fees.
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