This is a topic many would rather not discuss. However, when situations turn that you cannot meet your obligations to your creditors then it is a reality check time. Debt management is necessary for anyone who, despite the burden of debt, would still want to save his/her public image and still transact some business, albeit at a reduced pace. There are several methods that have worked over the past including;

Bankruptcy
Considering the roots of this word and its applications today in the financial world, one would almost make a direct connect. Bankruptcy is believed to come from the Italian phrase banca rotta to mean broken bench. Its meaning, filing for a court order to absolve an individual from debts is almost a kin to breaking a creditor’s bench or working capital for that matter.

Debt Consolidation
Those with limited knowledge of finances categorise this debt management method as the case of digging a whole to cover another. Those in the know, however, say it is a bright idea especially if the rates of the new facility are low. It involves getting a loan facility against collateral, ideally at a lower market rate and using the proceeds to settle earlier unsecured debts.

Initiating a Debt Consolidation Plan
This involves getting into formal agreements with creditors to renegotiate the terms of the outstanding loan facilities. Its main purpose is to help a client debtor end up with a manageable repayment schedule.

Debt Relief
This requires a lot of benevolence on the part of creditors. It involves the complete or partial writing-off of outstanding debts. The aim usually is to help slow the accumulation of debts. Mostly, it is nations and organizations rather than individuals who qualify for this sign of good heart.

Debt Snow-balling
A method most suitable for credit card debts and other accumulated revolving credit. The principle is to pay the least debts in turn. On completion of one, the amount set for it is then transferred to pay the next least debt. This is debt management in a wrap.