A common question faced by many people is whether they should pursue “debt management” or “debt settlement”. This situation is faced by people when they are unable to find relief due to the presence of high unmanageable debt.
For some reasons, when one is unable to manage their minimum expenses then these solutions known as a debt management plan or debt settlement should be taken under consideration.
The Process of Debt Management
It is such a process which is being undertaken by many nations to lessen the burden of people suffering from intense debt pressures. This process of debt management UAE is linked with “credit counseling”. With the help of a credit counselor negotiations are made with a particular creditor. An individual finds relief when monthly payments are reduced and he can use his money for other purposes too. Like this burden of debt is divided over a period of a few months or even too few years. The overall amount of debt being paid in debt management is high as compared to debt settlement.
An individual has to pay his debt in the period of a few months or years. But if he is unable to do so then a third party can interrupt. They can collect the debt by the process of legal debt collection. Under this process debt collectors are not allowed to make any sort of communication through emails. The person from whom the debt is to be collected can only be contacted through a particular attorney.
A person or an organization who talks on behalf of a particular individual when he is unable to pay a certain amount of debt is known as the process of debt settlement. By this process, the rates of debt are negotiated and a particular person’s debt burden also lessens down. In the case of debt settlement, the payment flexibility is high and medium legal protection is also provided to an individual.
The rate of interest related to an individual’s loans is reduced. Due to which relief is provided to those who are facing a severe debt crisis. This technique to repay debts is also adopted by people because debt settlement provides safety from bankruptcy.
It entirely depends upon an individual which process they opt for. But the overall burden that a person faces is greatly reduced when these methods of debt dealing are taken under consideration.