Who Qualifies for Debt Management?

The term "debt management" refers to the counseling and advice that a person in debt may receive from a financial professional, such as a debt counselor or a financial adviser. Anyone is legally entitled to debt management. However, only certain people qualify for low-cost credit counseling, just as only some people can afford financial advisers. In addition, only some people may qualify for hardship programs from creditors that may reduce the size of their debt.

Credit Counseling

There are a number of firms that offer credit counseling. Some credit counseling firms are run as a business, while others are run as a nonprofit concern. Both business counseling firms and nonprofits may choose to charge clients a fee for services. However, some nonprofit companies will offer services to clients free of charge if they are low income. The income requirement will vary depending on the organization offering the services.

Financial Advisers

Many people, in lieu of credit counseling, will attempt to manage their debt by consulting with financial advisers. These financial advisers can look at a person's financial situation, including his debts, assets and income, and help determine the solutions open to the person for reducing his debt load and meeting his financial obligations. However, few financial advisers come free. Many will charge by the session or charge a retainer fee.

Debt Settlement Firms

Some debt settlement firms offer both legal advice to clients and aid them in settling with their creditors. These debt settlement companies charge different fees depending on the services they offer and the company's policies. While some will charge a flat rate, others will charge a commission based on the total amount of the person's debt or the amount of money that the settlement firm is able to save him on debt payments.

Hardship Programs

Many creditors, such as credit card companies, have hardship programs in which they offer special terms to people who are deeply in debt and are not able to pay off the debts they have incurred. These programs will help the person manage his debt by restructuring it or by allowing the person to settle for partial payment. The only way for a person to determine if he qualifies for a hardship program is to ask his creditor.