Debt-management companies manage your debt by taking one monthly payment from you and distributing the money among your creditors, with whom they have often worked out lower payments and a lower interest rate. This is not a loan like debt consolidation. When you use these companies and try to get a loan, you will be treated the same as if you filed for a Chapter 13 bankruptcy. Mortgage underwriting guidelines will consider your credit trashed if you use one of these companies. When using these companies to get out of debt, it will not change your habits of frivolous spending. You have to do that yourself.

Labels: Debt, Debt Reduction