Debt Consolidation or Debt Management

Choosing how you will get out of debt is the first step to taking back your financial life. There are two major types of programs that you may be able to consider if you are looking to stay away from bankruptcy. Debt consolidation and debt management are programs that may sound similar, but are in actuality very different. Here is a great video explaining answering the question of ā€œWhat Is Debt Consolidation?ā€ and here are some of the major differences that you can expect.

Debt Consolidation is more hands off; debt management is more hands on.

If you feel as though you can handle your debts without a day to day financial planner in your life, just want an easy monthly amount you can afford then you may opt for debt consolidation. In most management programs, your manager will act as your financial conscience; however, your decisions will still be yours. This works well for people who have not hit the minimum for a debt management program or a bankruptcy lawyer.


Debt management actually changes the people whom you are in debt to. There are many advantages to this in certain situations. However, it is a process that is quite hands on. You will likely need a certified planner in order to find the creditors that will take on a consolidation case. You will have to give up many of your financial records and follow more direction than you would under a management program.

Debt management is usually meant for less immediate problems; debt consolidation is meant for worse situations.

Debt consolidation is usually the better way to go when a person catches a financial problem in its early stages. Perhaps the individual who is in trouble simply spent too much or had an unexpected dental bill that threw the monthly budget out of whack. This is not a problem that requires a full changing of the guard financially.

Debt management is usually the preferred method for an individual who is facing a slightly direr situation. Perhaps there has just been a death in the family, and that member was a breadwinner without a life insurance package. Maybe there was a more serious medical incident that required a huge out of pocket expenditure. There may also be an unexpected expense at a business that threatens to pull it under. These are situations that may require a complete change of the creditor dynamic.


Debt consolidation usually has a shorter timeline than debt management.

People who are on debt management programs are usually trying to pay off their debts in a shorter amount of time. People who are on debt consolidation programs usually need more time to pay off bills. In both cases, extensions can be made, but debt consolidation usually has the more formal structure in place for a timeline.

Whether you choose debt management or debt consolidation, you should choose the program that allows you to pay off your debts within your timeline and within your monthly budget. It definitely helps to have a UK debt specialist that can provide you with recommendations and further details for each type of program.

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