Many people may face financial crisis some time in their lives, whether the crisis is due to an illness in the family, loss of job, overspending or a new business gone sour. It may seem that everything is spiraling out of control and can be quite overwhelming. But often, this can be overcome. Debt management programs may be able to help you to keep your head above the water. A debt management program (DMP) may help you to negotiate lower interest rate, get late fees waived, work out a payment schedule agreeable to you and your creditors and consolidate several monthly payments into one.

It is imperative, however, to understand your personal needs and then tailor a solution to what best fits your financial game-plan. There may be many options to consider in getting your finances under control like realistic budgeting, credit counseling, debt negotiation and debt consolidation.

Before you get a credit counselor involved, it may be important to self access your position and know what your inflow of money is and what your expenses are. You may like to list all your different sources of income and then list your expenses for each month. By doing so, you may be able to cut unnecessary expenses and prioritize your debts. Again, it may be a good idea to call your creditors and negotiate or waive your late fees, reduce your interest rates, and/or work with them on a payment schedule.

But if you are not able to create a workable budget, there may be many forms of debt programs available to overcome your struggle. Debt relief programs include credit counseling, debt consolidation loans, debt negotiation and bankruptcy.

A credit counselor may help to establish a DMP that can get debts into manageable amounts and provide some debt relief solutions to get a hold on your debts. Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems.

Another strategy is to use the debt consolidation loan program. A debt consolidation loan is a loan that you are given in order to "consolidate" your other loans. Debt consolidation does not reduce your debt directly. It consolidates your debt to reorganize your financial situation and make it much easier to achieve your goals. A consolidation loan may lower your monthly payments, either by reducing your interest rate or by extending the length of time for repayment, but it may help you pay off the other creditors completely.

Other debt services that credit companies provide is debt negotiation which is basically negotiating to settle your debts for something less than what you owe. You pay a part of what you owe to a creditor, and the creditor writes off the rest of the debt. Credit card companies often offer lump-sum settlements as a way to recoup part of their losses.
Many third-party companies that offer debt management programs have been known to disguise their practices as consolidation under the pretext of negotiation, and these companies frequently charge exorbitant fees while simply passing along payments to your original creditors, sometimes failing to even negotiate any difference in your repayment terms. Therefore, it is important that you get involved with a reputed organization which will have your best interest in mind.