When it comes to finances, sometimes it’s easy to get in too deep, find yourself deep in debt, and not know how to get out of the situation. If it gets to be too much, it may be a good idea to get professional help. Debt management companies can be the answer to get you back on your feet, whether you’re just beginning to get into trouble and don’t think you need help, or even if you’re overwhelmed and on the verge on bankruptcy.

The role of a debt management company is to work with you and your creditors to make your debt more manageable and keep you from bankruptcy. Types of debt that qualify are medical bills, student loans, credit card bills, utility bills, IRS debt, and various other kinds of unsecured debt. They can also provide “credit repair” services, or help fix mistakes on your credit report.

Debt management companies will normally provide two services. First, they will examine your finances and help you create a workable budget that provides a monthly amount that will go toward your debt. They will council you on how to manage your monthly income and bills and show you ways to cut back and control spending. They will work with you to develop a “debt management plan (DMP),” where you will be required to deposit a predetermined amount into a special account each month to go toward your debt.

Next, the debt management company will work with your creditors to negotiate a debt repayment plan. This can include reducing monthly payments, lowering interest rates, and possibly eliminating late fees. Your creditors are then paid from the account you set up with the debt management company.

When a debt management company goes to work for you, they can stop collection agencies and creditors from harassing you. Creditors are usually more than happy to work with a debt collection company because then they know they will get paid.

Research debt management companies carefully. Ask friends for referrals and check with the Better Business Bureau in the company’s home state. Make sure they are accredited and read all agreements in full. Fee structures vary from one company to the next, and you want to find the best deal. Bear in mind that Non-Profit companies are not government agencies; they just don’t pay taxes. Once you find a good debt management company, you can relax a little, knowing you are taking positive steps to mend your credit.