Debt management and debt settlement are two very different repayment options. A debt management plan provides regular monthly payments to your creditors. In contrast, a debt settlement program often encourages you to stop sending payments to creditors, which can result in serious consequences. The risks associated with debt settlement programs are important to understand. Below is a summary of things you should consider before choosing debt settlement as an option.
Even with the best debt settlement companies, costs are often higher than debt management. With debt settlement you can expect:
- Higher fees
- Additional tax implications
- Negative affect on credit rating
- No financial education to help you stay out of debt
With a nonprofit like Take Charge America, the fees are modest, and you will receive support as you learn to regain control of your finances and build a strong financial future.
If you would like assistance managing your debt, call 866-528-0588 to speak with one of our certified credit counselors, or take part in our online credit counseling process.