by Henry Dahut, Esq.

Many debt-management organizations now offer programs for individuals who are going through the early stages of post-divorce as well as people who have accumulated an excessive amount of unsecured debt and can't make the required monthly payments.

What typically happens to these individuals is that they fall behind on some of their payments, which doubles or triples their minimum payment. Interest charges then accumulate. After falling behind, late charges can get added on monthly, thus ever increasing a person's debt. Due to inadequate funds, it becomes impossible for many people to catch up.

More information on divorce and financial distress: Avoiding Financial Disaster Common Pitfalls Drowning in Debt? Protect Your Credit and Finances Collection Agencies

Financial distress can soon develop into a general sense of despair, especially for those who have just ended a marriage. This is the time people are apt to make bad and sometimes rushed choices. This is where debt management comes in. This is supposed to help you regain your balance, so you can make thoughtful choices with respect to your financial affairs.

Debt-management companies and credit counselors can help individuals by contacting all of their unsecured creditors and notifying them that the client has enrolled into a debt-management program. Creditors must accept that the client has enrolled in the program, but need not grant any leniency in the repayment of the debt. But when they realize that the individual is financially overextended and seeking professional help, most creditors will work with a debt-management company and offer some form of relief. They realize that if they don't help you out a little, you may file for bankruptcy and they will likely collect nothing.

Through debt-consolidation services, creditors can at least recover the principal on your debt. In addition, you will notice that most debt-consolidation companies are organized as "non-profit" companies. This allows the credit companies to recoup a significant portion of the "lost interest charges" through tax write-offs.

For more articles on the financial issues of divorce, visit http://www.divorcemag.com/articles/Financial_Planning.

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