Debt Negotiation vs Debt Management

Debt negotiation versus debt management is a form of financial guidance to correct a bad credit situation through negotiation of accounts with creditors agreeing to compromise their terms. Credit management not only involves negotiations, but it also works to teach the debtor how to manage finances for prevention of a debt problem recurrence. This comparison provides an option that solves the immediate problem, while management has helped thousands of borrowers learn how to manage their finances proving to be a better long term arrangement.

It is important to focus on getting out of the current financial load by getting creditors to reduce interest rates, lower payments, and even eliminate portions of the amount due in exchange for immediate payoff. Management, however, includes negotiation tactics, but includes teaching the borrower how to stop overusing money; how to save income; and how to avoid easy terms offered by charge card companies and others. The primary difference of debt negotiation versus debt management is the long-term effects on the borrower's future financial habits.

While both services are performed by professional credit counselors, they tend to view their service complete at the settlement of the current financial situation. Managers specializing in this area consider the borrower in a more responsible attitude, seeking to guide them following the at-hand credit situation is resolved. Debt negotiation versus debt management, as in the ancient proverb, "gives the hungry a fish". Management "teaches them how to fish" thereby equipping the borrower for future success by avoiding similar financial dilemmas.

The after effects of these actions still include a poor credit report for a lengthy period of time since negotiations usually stop regular payments to the creditors during negotiations. Management counselors will encourage the borrower to continue their monthly repayment even if in much smaller increments until the account is resolved through complete payback or a negotiated settlement is reached. Debt negotiation versus debt management isn't a cut and dried choice for all situations. Each given situation will differ in needs and strategies.

Going through the difficult process can seem less satisfactory to a borrower. There is a feeling that something was overlooked or forgotten. Like reading part of story that leaves out the ending, there is a sense of anticipation for the climactic end, only to be left hanging, waiting to know what ultimately happens. God knows the human need for complete fulfillment - the need for guidance and security. "Show me thy ways, O Lord; teach me thy paths. Lead me in thy truth, and teach me: for thou art the God of my salvation; on thee do I wait all the day" (Psalm 25:4-5). He promises to never leave His children, and see them through all circumstances. Payment management provides that final chapter, the guidance to see the process at hand though completion, but with direction as to where to go when done.

Add to: File Insurance Business article Teen Photo Images