If you’re feeling overwhelmed by debt, you’re not alone — but you do have choices. Debt relief can take many forms, from self-guided tools to working with trained professionals. Here’s a breakdown of the most effective options and who they might work best for.

1. Credit Counseling
A credit counselor helps assess your budget, debts, and financial goals. Most nonprofit agencies offer free sessions and may recommend a debt management plan (DMP) if it’s a good fit.

Pros:
• Personalized financial advice
• Budgeting support
• Often free or low-cost
• Helps improve financial literacy

Cons:

2. Debt Management Plan (DMP)
Under a DMP, your debts are consolidated into one monthly payment managed by the credit counseling agency. Creditors may reduce interest or waive fees.

Pros:
• One simplified payment
• Lower interest rates
• Structured path to becoming debt-free

Cons:

• You may need to close credit cards
• Takes 3–5 years to complete
• You must stay committed to avoid losing creditor concessions

3. Debt Consolidation
This involves using a personal loan or balance transfer credit card to pay off high-interest debt.

Pros:
• Streamlines your payments
• Can reduce interest and save money
• Easier to manage one due date

Cons:

• Requires good credit to qualify for better rates
• Fees and terms may vary
• Risk of falling deeper into debt without budget control

4. Debt Settlement
A company (or you, on your own) negotiates with creditors to accept less than the full balance. You stop payments and save up to offer a lump-sum.

Pros:
• Potential to reduce debt by 50%
• Faster payoff than some other options

Cons:

• Major credit score damage
• Creditors might refuse to settle
• High fees and tax consequences
• Risk of lawsuits from creditors

5. Bankruptcy
If debt is completely unmanageable, bankruptcy can discharge some or all debts through a legal process.

Pros:
• Can stop foreclosure or wage garnishment
• Offers a financial “reset”

Cons:

• Severe credit damage
• Not all debts are dischargeable
• Legal and filing fees can be costly

Choose the Right Path
Before committing to a solution, compare your options carefully. If you’re not sure where to start, talk to a certified credit counselor — often for free.