If you are receiving unsolicited phone calls from an entity pretending to be ACCC (a trusted non-profit credit counseling agency), please be assured that ACCC’s policy is NEVER to contact you unless you’ve explicitly requested for us to call you.

×

ACCC’s Client Login allows current clients to access their program information, including the due date, program benefits, and other documents.

Select a Client Login below based on the service that you are currently enrolled in:

Debt Management Program

Client Login

Bankruptcy

Pre-Bankruptcy Client

Post-Bankruptcy Client

Not yet a client, but looking to get started?

ACCC offers debt relief options to individuals and families that are suffering from stress related to credit card debt by providing effective credit counseling, helping to consolidate debt, and advising on debt management.

Get Started

Wait!

You are now leaving the Consumer Credit website and are going to a website that is not operated by ACCC. We are not responsible for the content or availability of linked sites.

Are you sure you want to leave?

No, return me to the previous page.

Yes

Debt Management vs Debt Settlement: Which One’s For You?

When your credit card debt becomes too much for you to handle on your own, you might start looking into different debt relief options. You may have heard the terms “debt management” and “debt settlement.” Though they sound interchangeable, they are actually quite different. Let’s dive in and explore the difference between debt management vs debt settlement so you can decide which one is best for you!

debt management vs debt settlement

Debt Management

A debt management program is administered by a nonprofit credit counseling agency. In this program, your debts are combined into one monthly payment to the credit counseling agency. From there, they disburse your payment to your different creditors. Having one monthly payment makes things easier for you in that you don’t have to remember to pay every credit card bill individually. The credit counseling agency does it for you. Also, because these agencies negotiate lower interest rates and fees with the credit card companies, your payments in a debt management program are lower than they would be otherwise. You still pay off the principal amount you owe, so your credit score is not negatively impacted.

In order to get enrolled in a debt management program, you first must go through a credit counseling session. A credit counselor will ask you about your income, expenses, assets, and liabilities. With that information, they work with you to create a realistic budget. From there, they determine if a debt management program is the best option for you.

Debt Settlement

Debt settlement, on the other hand, is administered by for-profit companies. They will also consolidate all your debts into a single payment, but in a different way. Unlike a credit counseling agency, they negotiate with your creditors to allow you to pay less than the principal amount you owe. Your credit score can take a massive hit after that because it shows future lenders that you aren’t a reliable borrower. Additionally, any money you save from debt settlement can be counted as income by the IRS. This means you will have to pay taxes on it. Debt settlement companies also charge high fees, so in the end, you may not be saving as much money as you thought you were.

Debt Management vs Debt Settlement: Which Option to Choose?

With all the above information, which option will you choose? Debt management programs are better for long-term financial health. They help you pay down your debt without dropping your credit score. Many credit counseling agencies, like ACCC, also offer financial education materials. This helps clients can learn how to better manage their money. Check out our financial resources at consumercredit.com!

If you’re struggling to pay off debt, ACCC can help. Call 800-769-3571 to speak to a certified credit counselor.

ABOUT AUTHOR / Madison

Madison is a Marketing Communications & Programs Associate at ACCC. She is excited to share her tips on saving money and being financially responsible here on the Talking Cents blog!

View all author posts →

Dev Tool:

Request: blog/debt-management-vs-debt-settlement-which-ones-for-you
Matched Rewrite Rule: blog/([^/]+)/?$
Matched Rewrite Query: post_type=post&name=debt-management-vs-debt-settlement-which-ones-for-you
Loaded Template: single.php