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The Truth About Debt Management

3 Minute Read

Myth: The debt management companies on TV, like Consumer Credit Counseling Service, will save me.
Truth: You may get out of debt ... but only with your credit trashed.

Debt management companies are springing up everywhere. These companies help "manage" your debt by taking one monthly payment from you and distributing the money among your creditors, with whom they've often worked out lower payments and lower interest. This is not a loan as with debt consolidation. Sometimes people get the two confused. However, because Americans are up to their eyeballs in debt, the debt management business has become one of the fastest-growing industries today.

Companies like Consumer Credit Counseling Service can help you get better interest rates and lower payments, but at a price. When you use one of these companies and then try to get a Conventional, FHA, or VA loan, you will be treated the same as if you had filed Chapter 13 bankruptcy. Mortgage underwriting guidelines for traditional mortgages will consider your credit trashed, so don't do it. Real debt help is found only in changing your behavior.

In short, debt management companies are out. Hard work is in. Change your financial behavior and change your life—for good. True debt management is about one thing: you controlling your money.

Real Debt Management

The good news is that there's not some magical, mystical formula to good debt management. The solution is common sense and having a solid plan to get out of debt. Good debt management is 80% behavior and 20% head knowledge. It isn't rocket science as some debt management companies try to make you believe.

Is it easy? No. In fact, it's really hard most of the time. But it's worth it. It's amazing to see people change their lives through simple determination and having a plan that works every time. Once you have a real debt management plan in place, its only a matter of time before you eliminate debt completely.

Financial Peace University Is Your Plan

People every week tell us how they have paid off $10k, $20k and sometimes even $100,000 in debt using Financial Peace Univeristy. This nine-lesson, personal finance class is your solution to getting out of debt, saving money and building wealth.

The first step to paying off all your debt is finding how much you owe and how long it will take you to pay it off. We've made it easy! Start now with our simple debt calculator!