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Debt Settlement vs. Debt Management…Know The Difference!

NOTE: This information is brought to you Nina Ericksen of Surepath. They are a true non-profit that specializes in helping people get out of debt THE RIGHT WAY. Links to their programs are below...

It’s important to know the difference between Debt Settlement and Debt Management. Please review the information below so you can make a well informed decision about your financial future.

Debt settlement is a process of negotiating with creditors to accept payment that is less than the full amount of the debt owed. Funds accumulate in a special account until enough has been saved to pay off one creditor, and then the process repeats until the debts have been repaid. Watch this Today Show investigation on Debt Settlement.

A Debt Management Plan  vs. debt settlement helps consumers repay their debts in full within 36-60 months.  A debt management program is usually arranged by a third party credit counseling agency that negotiates lower interest rates, reduced finance charges and affordable monthly payments.

So what’s the difference?


  • Negotiates with your creditors to reduce APR and finance fees.
  • One monthly payment made to SurePath, funds are disbursed to your creditors.
  • Stop collection calls.
  • No penalty on FICO score.
  • Receive financial education and an action plan.
  • Helps rebuild credit payment history.


  • Attempts to negotiate with your creditors to reduce the amount of debt owed.  Some  large creditors such as Chase, will not accept negotiations through a debt settlement company
  • One monthly payment made to settlement company until they’ve collected enough to make
  • Increased collection calls and chance of judgments and garnishments.
  • Credit score can drop 45-160 points

In the last decade, the number of debt settlement companies nationwide increased from 10 to over 500. Check out this study from theFTC regarding debt settlement.

“Beware of the Sharks that are circling,” said Joy Thormodsgard, CEO and President of SurePath Financial Solutions (CCCS), a non-profit credit counseling service. “Not knowing the difference between a reputable credit counseling service, a debt settlement firm, or a foreclosure rescue scam can easily cost the consumer $1,000 or more in upfront fees, leaving them deeper in debt and a credit report that is gasping for air. If you can't make a big enough dent in your debt yourself, look for a legitimate credit counseling agency.” She further adds that agencies which claim “to cut your debt in half, etc.,” make her think, “if it is too good to be true….it probably isn’t true”

Check with your local Better Business Bureau and state attorney general's office to see if there have been any complaints lodged against the debt settlement or counseling agency. Reputable firms will have certified counselors and be affiliated with the National Foundation for Credit Counseling or accredited by the Council on Accreditation for Families & Children.

For more information, contact them:

SurePath Financial Solutions

Consumer Credit Counseling Service
80 North Wood Road Suite 200
Camarillo, CA 93010
Phone (805) 437-7530

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