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We have two children in college and have basically done a poor job in managing our finances. Our combined income is approx over $150,000 yearly. We have at least $80,000 in unsecured loans and have managed to get in over our heads. We prefer NOT to go the route of Debt Settlement. Is it wishful thinking to believe we can simply use the Debt Management Program? And…will it hinder us from getting further student loans. The current student loans have not come due yet.

Hello, thanks for the question. Debt management may help you somewhat without damaging your credit too much but it will not result in a large monthly payment reduction. Debt management will consolidate the bills and help you budget while reducing the interest rates on your unsecured debts. So the question is are you able to handle your current monthly payments? Just the minimums or can you pay some amount over the minimums each month (so you actually can get ahead of the curve over time)?

If yes, then for the sake of leaving your credit untouched (to not risk jepordizing the student loans) you probably want to cut back wherever possible, tighten your belts, and try and ontact the creditors to see if you can get the interest rates reduced on your own.

If no, and you see no way to avoid falling further behind the curve, you may want to at least contact a non-profit debt management company or two and see what they say. The student loan question is dicey and you’d want to get some assurance from them before you sign up assuming their plan is workable for you and makes sense.

I also need to mention that debt relief companies typically do not handle student loan debt so they’d only be able to assist you with your other unsecured debts.

Hopefully that is helpful.