Define: Debt Management

Debt management refers to the process of effectively managing and repaying debt obligations in a manner that is sustainable and conducive to achieving financial stability. It involves creating a comprehensive plan to address outstanding debts, reduce interest costs, and establish a manageable repayment schedule. Debt management strategies may include budgeting, prioritizing debts based on interest rates or balances, negotiating with creditors for lower interest rates or payment arrangements, consolidating debts into a single loan, and exploring options such as debt settlement or bankruptcy as a last resort. The goal of debt management is to regain control over finances, reduce financial stress, and ultimately achieve a debt-free or more manageable financial situation.

A unique strategy developed to help a debtor manage their debt. This strategy is usually developed and implemented by an outside company or organisation on behalf of the debtor, usually because the debtor is unable to sufficiently manage their debt on their own, due to lack of knowledge or because they are overwhelmed by the amount of debt.

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This glossary post was last updated: 29th March 2024.