People go for debt management and settle their debts for a variety of reasons. One of the main reasons is that they have run out of money to pay all of their bills on their own. They are also looking for other options that might reduce their debt or that would increase their credit score. However, some people get tricked into signing up for a debt consolidation or settlement when they don’t really need to.

Debt consolidation involves only combining all of your existing debts into one, one-time, lump-sum payment. There are a few things to keep in mind about this method, however. You may be able to lower your monthly payments by paying a lower interest rate, but you will most likely be paying twice as much in total due to fees and charges. You also may be able to get your payments cut in half, but this is not a guarantee.

For the most part, you will be paying more than you would with a debt consolidation or settlement. Even if you are paying a reduced rate, this is still usually at least 10% more than the actual amount of your bill. Plus, many companies charge monthly maintenance fees and late fee fees, which will also need to be added to the total debt owed.

As you can see, debt consolidation or settlement does not offer any good solutions to your current financial situation. You will be paying more, you will be subject to high fees and penalties, and you will most likely be not even making any progress in your debt reduction efforts. If you have serious financial difficulties, you should consider filing bankruptcy.

Bankruptcy is one of the only methods that really do offer some help to people who have a serious financial problem. Bankruptcy can wipe out most of your debt and help you begin to get back on your feet again. It also may allow you to obtain credit that you were previously denied.

If you really want to look at the alternatives for debt consolidation or settlement, talk to your creditors. Ask them about a “payment schedule.” This is where you would make a fixed monthly payment to your creditor, rather than having them send you checks for your bills every month.

Instead of sending your money to a collection agency every month, instead mail a check to your creditor and make sure that it is sent to a collection agency that is not in business to take your money. You should also try to avoid getting any more debt in the future. The last thing you want to do is further build up your credit problems by having any more unsecured debt.

If you want to know what other alternative solutions exist, look for a good debt relief network. These networks can help you find company that can help you resolve your debt issues. And this can help you to eliminate the debts you currently have and improve your financial situation.