The major difference between a Debt Management Program and Debt Settlement Program is that through a debt management option, creditors are being paid monthly whereas in debt settlement options the creditors are no longer being paid until such time as the debtor has built up sufficient funds to allow the debt settlement company to initiate negotiation procedures to reduce the amount of the debt and enact a lump sum settlement.
Either way, in most cases, settling credit card debt or enrolling in a credit counseling program should eliminate harassing phone calls from bill collectors and collection companies.
Debt settlement can have a significant effect on a debtor’s credit score and rating as a whole, whereas a debt management after a period of time may have a positive effect on a debtor’s credit score, but may still be damaging to the debtor’s credit worthiness. The good news is that credit can be repaired and credit repair solutions are affordable. Take your time, when considering debt negotiations or any type of credit counseling.
