Admitting that you need help is said to be the most important step in eliminating debt. The next step is listing down all the debts that you have on paper, as well as calculating your expenses and the amount you put away on savings (if any) versus your monthly salary. This allows you figure out where your money really goes. Delayed payments, in particular, can add to your growing debt, because these often mean getting an additional penalty. If you still can’t figure out what all those amounts mean, then it might be a smart idea to speak with a debt counselor. One of these alternatives is debt management.

Understanding what debt management is will help you decide if it’s the right alternative for you. Debt management is undertaken by a debt professional on your behalf to come up with the optimum amount that you as a debtor can pay based on your expenditures and income.

Unlike other options, debt management is excellent when you have a lot of unsecured loans that need to be resolved. These are kinds of loans that don’t need any collateral, such as credit card debt, medical bills, and personal loans. In contrast, secured loans, such as a mortgage or car payments are not covered by debt management plans.

One of the awesome things about debt management is that it inhibits you from borrowing more to pay off other loans. Doing so may sink you further into debt with massive interest rates. Unfortunately, a lot of people who take this route out of desperation. Mostly, this is because they are being intimidated by creditors. If you seek the advice of a debt management firm, these tactics may cease. Choosing the debt management option means that you can unify all your bills into a one monthly payment. In some cases, creditors may agree to freeze the interest rate or approve a fixed payment monthly.

But keep in mind that your creditors can choose to ignore your debt management plan at their discretion. If you choose debt management, you must keep in mind that this plan can affect your credit score. It may also take some time before you can settle all your debts.

However, debt management is not for everyone. Before you decide, make sure you are informed about all your options. Just a friendly reminder—you can easily become a victim of debt management scams. Read the fine print before agreeing to any debt management service.