Debt Management Option: Do It Yourself!

There’s a great article on CNNMoney that sparked a bit of desire in me to write. Society is getting further and further into debt, and once people realize what they’ve done, they go about it all wrong when trying to get out. The internet is full of debt management programs that give you the option of getting on a payment plan. The company negotiates your debts down, negotiates a lower interest rate, and gives you “peace of mind” – as long as you pay them.

What actually can happen is pretty scary, and that’s where this article comes in. It discusses different red flags that should come up when you’re weighing your debt management option.

The article gives the following seven red flags when evaluating a company as your possible debt management option:

  1. Have an ‘unsatisfactory’ record with the local BBB.
  2. Don’t spend more than 30 minutes conferring with you.
  3. Don’t let you review your contract before signing.
  4. Automatically enroll you in a debt-repayment plan.
  5. Expect an upfront fee equal to one month’s debt payment.
  6. Require ‘voluntary’ contributions.
  7. Pay your creditors late, despite your making on-time payments.

Now you’re probably saying to yourself: “Oh man, you’d have to really be naive to still sign up if you saw stuff like this.” I couldn’t disagree more. These salespeople are very skilled at what they do. They recognize that you are in a very tight situation, your emotions are probably running on high, you’ve already really had an internal battle just making a step towards resolving your debt issue, and you want so bad to see some change in your financial picture. It doesn’t surprise me at all that people get sucked into these schemes in this kind of emotional state. It’s actually pretty understandable.

The article continues with 8 tips on how you can evaluate and work with a debt management company:

  1. Check with the Better Business Bureau.
  2. Mind the fees.
  3. Look for easy-to-understand contracts.
  4. Choose a company that can help with all your accounts.
  5. Check out the agency’s credentials.
  6. If a counselor uses a stopwatch, run.
  7. Make sure they pay when they say.
  8. Do the math.

The only problem with these 8 tips is that it means you’ll actually be using a debt management company as your option. I have a completely different notion for you:


After all the math is done, remember that it’s your behavior that caused this problem in the first place. If you had not been living paycheck to paycheck, but instead had been living within your means, and possibly even had an emergency fund, you would most likely not be in the mess you’re in now.

Debt management is not an option. 99% of the time you will be better off just hacking away at the debt the same way you got into it. One bite at a time.