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Debt Management

Posted by Timothy Brown | Feb 27, 2022 | 0 Comments

Debt Management

Debt Management (not to be confused with "Debt Settlement") is an option that enables the debtor to repay unsecured debt through a structured plan.  In most cases, arrangements are made with each creditor to allow for the repayment of each credit account over a period of 5-years.  Typically, the agency or firm that administers the plan will reach out to the creditors and negotiate a reduced interest rate for each account.  Once the plan is fully approved, the debtor sends a single payment to the plan administrator, each month, who in turn sends payments to each of the creditors participating in the plan.  At the end of the plan, if all payments were made as agreed, the debtor will be debt free.

Many people believe that Debt Management is a suitable alternative to other forms of debt relief.  In many cases, though, Bankruptcy may be the better option.  Here are the pro's and cons of Debt Management


  • it allows for full repayment of the debt over an extended period of time
  • it allows the debtor to make a single monthly payment, rather than many separate monthly payments to each creditor
  • it it allows the debtor to pay less interest to each creditor


  • the debtor must repay 100% of the principal debt, as well as some interest
  • the plan administrator will likely charge a large fee for their services
  • not all creditors will participate in these programs
  • it won't help with delinquent or defaulted car loans or mortgage debt, missed rent, student loans, tax debt, or lawsuits

About the Author

Timothy Brown

Meet Our Experienced Crystal Lake Bankruptcy Lawyer Attorney Timothy Brown of The Law Office of Timothy Brown is a highly accomplished Crystal Lake bankruptcy lawyer. With over a decade of experience, he has the necessary skills to help his clients address a broad variety of legal matters pertai...


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