Debt management is the process of negotiating an amended payment plan with a lender in order to make monthly payments more manageable. In most cases, that is achieved by lengthening the repayment term, lowering the interest rate, and waiving certain fees. Debt management does not include the forgiveness of any principal balance owed. That would be more along the lines of debt settlement. Debt management isn’t credit counseling either, but it’s often a service provided by credit counseling companies. Confusing, I know.
Still, enrolling into a debt management plan with your lender can be extremely helpful. Sometimes a bit of a break in the short-term is all one needs to avoid missing additional payments and getting into even more trouble with creditors. While enrollment in a debt management plan will hurt your credit standing some in its own right, the effects are far less severe than they would be if you don’t figure out a way to get back on track.