5. Debt Management Frequently Asked Questions

What is debt management?

A person or business can get help with managing debt with various types of programs.

Are debt management and debt relief the same thing?

Yes, basically. Both terms are used when referring to programs or plans that help a debtor find a solution to heavy indebtedness.

What is debt consolidation? A person or business can consolidate debts and seek credit counseling to help with smaller monthly payments, or an equity loan can be taken out against personal or business property to pay off debts.

What is Bankruptcy?

Bankruptcy is a legal process that can exonerate debt when the debtor is unable to pay. A person’s credit rating usually suffers greatly with this action.

Is bankruptcy preferable to debt consolidation?

With the new bankruptcy laws making bankruptcy more difficult, debt consolidation is probably more preferable.

What is credit counseling?

Credit counseling is a program provided by debt management services to help a debtor reorganize his debts, usually paying a smaller monthly payment for all his consolidated bills.

What is credit card debt?

Credit card debt is the accumulation from balances due on credit cards.