In this modern age, needs for comforts and luxuries have increased greater than ever. Every person wants to own a beautiful house, a luxury car and to lead a lavish life- style. To satisfy these desires, most of the people prefer to raise loans which are to be repaid over the years along with the interest amount. The repayment of loan is projected on the future income to be generated through the employment or business. Sometimes, due to a number of unforeseen circumstances, you are not able to repay your debts in time and the burden of interest coupled with the principal amount keeps on mounting which gives you a lot of mental stress, besides adversely affecting your credit in the market and society. These days, majority of the Americans are facing the problem of high debts. To overcome this problem, concept of debt management was introduced a few years ago.

Debt management denotes the engagement of a designated agency to counsel and help you to manage and repay your debts in the most convenient manner within the shortest possible period with minimum additional expenses or charges. For the persons facing the acute problem of high debt burden, this solution is like a boon. With the significant changes in the law of the United States regarding the bankruptcy since the year 2005, agencies engaged in debt management services have gathered all the more importance than earlier. There are a few non-profit earning debt management companies which provide related services for a nominal fee which is affordable for all. There are also some profit oriented professional debt management companies which provide multiple services and charge a considerable amount as their fees in the form of certain percentage of the debt amount to be repaid.

When ever you plan to get rid of your worries of high debts, you should thoroughly search for a trusted and renowned agency engaged in debt management services as there are several companies in this field which make high claims and false promises but ultimately prove to increase your financial troubles instead of providing you some relief. After carefully selecting a competent agency, you should discuss your problems in detail with the representatives of the company. In your best interests, you should not conceal any fact and should present a true and correct picture of current financial status along with the plans for future for settlement of debts. The debt management agency or company will first of all prepare a comprehensive list of all your debts and then discuss with you the probable course of action for early and effective solution for your debt burden problems.

Few of the measures adopted by the debt management companies to reduce your burden of debt are as under:

Organize meetings with your creditors and discuss about lowering down the rate of interest or allowing moratorium of interest during the repayment period. This can substantially reduce your debt burden.
Make a detailed study of your income from all sources and also the expenditure over mortgages, rent, food and utilities to arrive at the net amount which shall be available for repayment of dues on monthly basis.
Work out the amount payable monthly dues in respect of your existing debts and collect it from you for onward payment to the creditors on due date.
Discuss with the creditors regarding any possible relaxation or discounts in case of lump sump payment as one time settlement.
Advise you to plan the repayment of your debts in the order of priority.
Exploring the possibility of transferring your existing liability at lower rate of interest or with a longer repayment period to reduce the burden of monthly payments of existing debts.
Arranging finance for repayment of all the debts immediately thus, clubbing all your financial liabilities to one source.
To conduct educational programs for the persons facing difficulties with debt traps.
To refer your case to some other appropriate forum in case the agency is not able to handle it or advice you to apply for bankruptcy if in their opinion, the debt is too large to be paid by you in the given number of years with your limited resources.
Whereas these debt management companies advise you to spend less than you earn, the services of these companies can not be obtained in the case of secured loans like a car loan or housing loan. The debt management agencies can be engaged to find effective solution for the problems arising through accumulated burden of credit card repayments, personal loans, stores card loans. Overdraft facilities, etc. if in the opinion of the agency, they are not able to solve your debt problems with the solutions they have, they may refer your case to some other effective forum or advise you to go for bankruptcy proceedings. It is important to understand that taking the services of a debt management company may temporarily hamper your credit ratings and you may be ineligible to raise a loan for a specific duration. Further, if your all debt obligations are less than US $ 10000, you are not entitled for the services of a third party agency for managing your debts.

With the United States Bankruptcy laws coming under vital changes in October, 2005 many indebted people now prefer to undergo long term debt management plans. Before deciding about engagement of any particular debt management agency, you should ensure that the same is properly registered with the Better Business Bureau and it does not charge any exorbitantly high fees for their services to devise a debt management plan for you. While non- profit companies charge a negligible sum for their services, profit making debt management companies charge a certain percentage of total debt amounts to be repaid as their fees for services provided by them. If you have a large portfolio of debts, this fee can be substantially higher. You should stick to the schedule of repayment on monthly basis as it shall improve your credit rating and will help you to get the relief from debt burden in a speedy manner.

National Foundation for Debt Management has been set up to provide assistance to the persons seeking help in the chronic cases of huge debt burdens. This foundation runs regular seminars and educational programs for the benefit of people in general. Proper guidance and advice is also provided at this foundation by the experts to face the problem of heavy debt burden in an effective manner. One can also get useful help online through the website of this foundation. This is a non- profit group organization which has been formed on a membership basis. It offers on course membership for debt help. Apart from this, there is an additional facility of Right Track personalized debt help programs to help highly indebted people. So far, more than 50,000 people have already benefitted through this program. NFDM also organizes free of cost chartered course in a personalized way for its members to impart education about proper and effective debt management techniques.

While a few management companies aim at reducing your burden of debt only, there are a few others which besides helping you to repay your debt also educate you about the various aspects of debt management in an effective manner. These programs also guide you to get the loans at best possible rate of interest to reduce the burden of repayment. A debt management company negotiates on your behalf with the creditors to get the amount of interest reduced or for some other concessions which can make it easy for you to repay your debts in the most convenient way. While selecting a debt management company, you should select one which is well established and has a proven track record. You should also compare the charges proposed by different companies to select the one with most reasonable charges which are also easily affordable for you.

With the increasing trend of raising multiple loans at a time and due to some recessionary economic trends, incidences of high indebtedness have increased in the recent times. Simultaneously, there has been a sudden spurt in the number of companies which are coming up almost another day and claiming to get you rid of your debts in quick time. Before falling prey to these unrealistic claims you should enquire about the background of the company. As debt management is not a simple task and it takes a few years for a company to get itself established in the market, you should select a debt management company which has sufficient experience in this field. By paying regular installments of your debt as per the terms of agreement decided by the debt management company on your behalf with your creditors, not only you lessen the burden of debt gradually, but also improve your credit scores in an effective way.

Another important aspect of proper debt management is to keep a periodical watch over your current liabilities and review the status regularly. If you keep a close watch over the market conditions and other offers for loan at attractive rate of interest you can avail these cheaper loans to square off your existing debts at higher interest rates and this can save a lot of money for you.

Regular savings are also a part of an effective debt management program. If you can set aside a small portion of your earnings every month, you can plan to buy your desired car or house from your own sources or you can thus minimize the amount of loan required. If you have got moderate financial liabilities, these can be effectively met with a proper planning and regular repayment on due dates. Further, in case of credit cards, you should always prefer to entire amount due on monthly basis as paying the minimum amount due sounds lucrative; it becomes costlier in a long run and can lead you into severe financial stress over a period. Meeting your financial commitments on the due dates is the key to effective debt management.

While some debt management programs are designed to reduce your debt burden through negotiations, alternative loan facilities or arranging for some concessions in the rate of interest etc., there are few specialized programs which provide education about various methods of debt management and also tell you about various ways to remain out of the debt trap as preventive measures. You can find a number of websites regarding various debt management companies but you should carefully choose one according to your need and suitability. Further, you should also take into account the fee to be charged by these companies as a company with high fee structure may worsen your financial condition further. You can find a number of advertisements in the local newspapers and financial magazines and journals about various debt management companies. You should verify the credentials of the company you want to engage, from some reliable sources.

With proper education and guidance about various debt management programs, you can organize your debts in a better and more effective manner. With a little prudence and strict financial discipline along with proper planning, you can be sure to clear your debts easily and speedily with the minimum extra cost and the least stress and worry. An effective debt management plan can take care of your worries related to burden of debt in a proper and beneficial manner. You have to just select the most appropriate debt management company having a professional approach and adequate experience and expertise in this field.