Need Help? A Complete Guide to Debt Relief Programs

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A little bit of debt isn’t necessarily a bad thing. With easy access to credit cards and loans, it’s quite easy to incur debt over one’s adult life. Left unchecked, however, debt can quickly spiral out of control . Once this happens, it can negatively impact a person’s monthly cash flow, credit score and quality of life. That’s where debt relief programs come in.

Debt relief programs and other debt-relief services like consolidation are one of the best ways to handle existing debt and start paying it down. With a good debt relief program, it’s possible to cut down on debt and become debt-free.

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How Do I Get Out of Debt with No Money?

According to a 2018 CNBC report , the average American owes around $38,000 in consumer debt, not including a mortgage. Even if it’s low interest, that debt still becomes unaffordable for many people.

If you’re struggling with debt but don’t have much money, there are several ways you can start cutting it down. For instance, you could:

  • Assess your personal finances. Make a realistic budget to see where your money goes each month.
  • Set aside a small amount of money from each paycheck in a savings account, so you have an emergency fund to cover a sudden crisis.
  • Cut back on expenses (ex. dining out or going to the movies).
  • Negotiate with creditors or lenders for better rates or more flexible payment dates.
  • Pick up a side gig or extra hours at work to increase your income.
  • Cut up extra credit cards to avoid temptation.
  • Focus on paying off one debt at a time (debt avalanche or snowball method).

By doing some of these things, it will become easier to get a handle on your finances and debt. However, if none of these methods seem to be working, debt consolidation or a debt relief program may be the next step.

Three main ways to get out of debt are:

Debt Consolidation Programs

A debt consolidation program is a program in which all unsecured debts are combined into one monthly payment. This is done by getting either a debt consolidation loan or a low-balance transfer credit card.

Covered debts include:

The key advantages to debt consolidation are:

  • One monthly payment instead of multiple with different due dates.
  • A lower interest rate with more manageable payments.
  • Lower chance of making late payments or missing payments altogether.
  • Fewer calls from debt collection agencies about delinquent accounts.
  • More organized finances (this makes it easier to manage and pay off debt).

Best Debt Consolidation Programs

Before choosing a debt consolidation program, you must understand the differences between consolidation, debt settlement and debt management plans. Each type of plan/program has its pros and cons when it comes to debt solutions.

Debt Settlement Programs / Debt Relief Companies

Debt settlement plans are also meant to help get people out of debt. However, they work differently from debt consolidation programs and debt management plans (DMPs). Here’s what to expect with a debt settlement plan:

  • A debt settlement agency will try to negotiate a lower total payment with your creditors on your behalf. You will not make any payments on the debt during this time.
  • If the agency succeeds, then you’ll owe between 50% and 80% of your original debt.
  • The agency will charge a fee (up to 25% of the amount of debt settled) for its service. However, you will not be charged until negotiations successfully end.
  • Some agencies let you track the negotiations in real-time through a client dashboard. This dashboard may also include resources and information to help you manage your finances better.

Although they are beneficial in many cases, there are a few downsides to debt settlement plans, such as:

  • Since you’re not making payments during negotiations, creditors or lenders may report them as late payments to the credit bureaus. This could lead to collections calls or damage your credit score.
  • If the debt is settled at a lower amount, it may be considered as income. This means you may owe more when filing next year’s taxes.

To find a debt settlement program or other debt relief company, check with the state Attorney General’s office and local consumer protection agency. While you’re at it, check if the agency is licensed in your state. Otherwise, here are some of the best debt settlement companies.

Best for Payday Loan Relief


DebtHammer focuses on getting consumers out of the payday loan trap. The process starts with a free consultation regarding how much you owe and the number of loans you have. An expert then looks over the information and determines which loans they can help with and which they can’t.

Once that’s done, DebtHammer’s expert negotiators contact the payday lenders on your behalf to reduce what you owe. The company also helps reduce the number of collection calls you receive. With negotiations done, they help you create a flexible repayment with payments at a fraction of the original cost.

Big Solutions Inc.

BSI is a non-profit credit counseling agency that helps settle consumer debt, specifically payday loans, by 50% or more. The agency has a high success rate.

They also prevent automatic debits from your bank account and help consolidate multiple debts into a single, low-interest monthly payment. Plus, BSI provides free, expert financial advice on managing unsecured debt.

National Payday Loan Relief

National Payday Loan Relief offers payday loan consolidation and debt relief. The agency helps eliminate and settle unsecured debts. With debt consolidation, they can help reduce what you owe and makes it easier to make your monthly payments. If requested, they may also provide legal aid.


RealPDLHelp also offers a free initial consultation. They then look over your existing payday loans to determine how best they can help. With a team of debt settlement experts, they negotiate with your lenders to reduce your overall debt.

The company also restructures the payment terms and helps keep debt collectors from harassing you. This agency also offers loan consolidation, debt management plans, and credit counseling services.

Best for Credit Card Debt

DMB Financial

DMB Financial is a debt relief firm that helps clients pay off their debt through a customized plan. They have helped over 30,000 people settle more than $1 billion in unsecured debt, primarily credit card debt.

With DMB Financial, you’ll get a free initial consultation with a qualified program consultant. Once enrolled, you’ll pay into an FDIC savings account that you control while a specialist negotiates with your creditors. Once all debt has been settled, you must then pay an agreed-upon fee (not indicated online).

Accredited Debt Relief

Accredited Debt Relief offers relief from credit card debt and other types of unsecured debts. They provide a free consultation to determine eligibility and an estimate of how much debt they can settle. You must owe at least $10,000 to qualify.

If you choose to go with this company, they will create a personalized debt program with the goal of negotiating down or consolidating your debt. On average, clients see a debt reduction of up to 50%. The duration of the program varies based on the amount of the debt. For instance, if you owe $25,000, it may take around 46 months to fully settle the debt.

The company charges between 15% and 25% of the balance of your debts at the start of the process. However, they do not charge until after successfully settling at least one debt.

Pacific Debt Relief

Pacific Debt Relief works by consolidating credit card debt and unsecured loans into a single, low monthly payment. Its fees range from 15% to 25%, depending on the amount of debt and where you live. However, it doesn’t charge upfront. On average, it takes 24 to 48 months to fully settle the debt. Most clients see a high overall debt reduction, though the exact numbers vary. Like many other legitimate debt relief companies, Pacific Debt Relief offers an initial consultation before you enroll.

Clear One Solutions

Clear One Solutions helps people consolidate their debt into a lower monthly payment by comparing different loan offers. On average, the loans have around a 3.99% interest rate, which is less than the interest on most credit cards. To qualify, you don’t need to have a minimum credit score, though each lender has its own requirements.

Besides its loan comparison service, Clear One Solutions also provides expert financial advice to people. Since Clear One Solutions does not grant loans, using it is free. Receiving the loan offers does not impact your credit score either, though applying for one will.

Best for Medical and Student Loan Debt

New Era Debt Solutions

Established in 1999, New Era Debt Solutions helps people settle their medical debt, student loans, personal loans, and credit card debt. They’ve had a high success rate and are regularly praised for their customer service.

New Era Debt Solutions offers a free initial consultation with a trained debt specialist. It also doesn’t charge for its service until after the program is complete. The exact fees are not indicated online.

Unlike most other companies, the company has an online portal for clients to monitor their debt throughout the process. Many clients see their first debt settlement within 3 to 6 months. On average, it takes 27.73 months to fully settle outstanding debt. The average total debt reduction is 52.23%, which is fairly standard.

Freedom Debt Relief

Freedom Debt Relief helps clients settle anywhere from $1,000 to upwards of $100,000 of unsecured debts. The company has worked with over 650,000 clients and helped resolve upwards of $10 billion in debt. Freedom Debt Relief specializes in credit card, medical, and student loan debt.

The first step is to contact a certified debt consultation for a free consultation. This call will help determine how much you can save and if you qualify. The program itself takes between 2 and 4 years to complete. At the end, the company will charge between 15% and 25% of the total amount of initial debt.

National Debt Relief

National Debt Relief is one of the highest-rated companies online for debt consolidation. The program starts with a free quote, which is followed by a conversation with a certified debt specialist. The specialist looks over the client’s outstanding debts and credit history to determine their eligibility.

Once enrolled in the program, it takes between 24 and 48 months to finish it. On average, clients decrease their debt by around 45% to 55%. National Debt Relief does charge a fee for its service, though it’s not clear on how much. Reviews online indicate the fees are standard for the industry though.

Century Support

With Century Support , the process of getting your medical and student loan debt settled is fairly easy. The company offers a free initial assessment before onboarding clients into a customized debt relief program. Once enrolled, clients make monthly deposits into an account based on what they can afford.

During this time, Century Support’s team of specialists negotiates with the client’s creditors to reduce what they owe. Once a debt has been negotiated, the team sends the first payment to the appropriate creditor.

As with other debt settlement companies, Century Support collects payment for its services after the debt’s settled. Timeframes and costs vary, but the program usually takes between 18 and 48 months. Most clients see a 50% debt reduction by the end.

Best for Tax Debt


CuraDebt uses an in-house debt relief program to negotiate and settle large amounts of outstanding tax-related debt. The company also helps clients with other forms of unsecured debt like medical bills and credit cards. To get started, you can fill out the “Free Savings Estimate” calculator. This will allow CuraDebt to provide you an estimate of how much you could save, how long it’ll take, and what to expect.

Since its founding, CuraDebt has helped more than 200,000 people settle their debts. On average, clients see a 50% debt reduction. After settlement, CuraDebt charges around 20% of the total enrolled debt for a final savings of 30%+.

Best if You’re Overwhelmed By Debt

American Fair Credit Council

The American Fair Credit Council (AFCC) is one of the nation’s largest debt settlement company associations. It has a network of members who help consumers manage and lower unsecured debt. It also serves as an advocate for American consumers’ rights when it comes to their finances.

The AFCC negotiates with creditors and lenders to settle debts by at least 50%. This makes it easier for the consumer to manage their finances and make their payments.

Beware of Debt Settlement Scams

Legitimate debt settlement programs and debt relief companies may be the answer to your debt woes. However, there are debt settlement scams out there. Here are some red flags to look for when choosing a debt settlement company, according to the Federal Trade Commission (FTC):

  • The company charges an upfront fee for its services.
  • They refuse to put anything in writing.
  • Promise to successfully settle debt, even though there’s no way of guaranteeing this.
  • There’s no website. Or, if there is a website, there’s no contact information like a phone number or business address.
  • They’re not accredited or listed on the Better Business Bureau (BBB) or the FTC .
  • They refuse to list their fees, terms, conditions of service, etc.
  • They ask you to put money in a dedicated account for creditors but don’t provide complete access to that account.
  • The company sends illegal robocalls, or recorded messages, claiming they can get rid of your debt.
  • They tell you to quit communicating with or paying creditors, but they don’t tell you the consequences of doing so.
  • Their company is brand new.
  • If they have credit counselors, they aren’t certified.
  • They promise to stop all lawsuits and debt collection calls.
  • They claim to use a “new government program” to get rid of credit card debt.

Most debt settlement scams target consumers who are desperate to get out of debt. Keep an eye out for these warning signs when dealing with a debt settlement company. If you’re not sure they’re legitimate, check the official FTC website or contact your State Attorney General’s office.

Debt Management Plan

Another option for debt relief is a debt management plan (DMP). DMPs are offered by nonprofit credit counseling agencies. If you enroll in a DMP, you’ll work with a certified financial counselor to assess your financial situation and create a repayment plan for your debts.

The financial counselor or credit counseling organization may also try negotiating with your creditors to lower your monthly payments or interest rates. Once that’s done, you pay the agency the agreed-upon amount each month. The agency, in turn, sends that payment directly to the creditors.

DMPs are similar to debt consolidation programs because they help you gain control of your finances and pay off debt. However, they do have their differences. For instance:

  • Debt consolidation programs require you to apply for and open a new account to combine existing debts. This account may be a low-interest credit card or personal loan.
  • A DMP is a service that uses a credit counselor and does not involve any new accounts.
  • Debt consolidation programs typically only end once all debt is repaid. DMPs have a finite timeline.

What to Look for in a Debt Consolidation Company

When choosing a debt consolidation company, or another debt relief program, keep an eye out for the following:

  • Customer service . How’s the customer service of the company? How are the reviews? The company should have high customer satisfaction ratings online. They should also be responsive to your inquiries and needs.
  • Transparency . The best debt relief programs and agencies are transparent when it comes to the terms of their service. They should be upfront with their fees and how long the process will take. They should also be clear on what you can expect during the process.
  • Trustworthiness . The company or agency should be highly rated on BBB and other reputable sites. Ideally, it will have years, if not decades, of expertise. It should also be licensed in your state.
  • Counseling and education . The best debt consolidation companies and debt relief programs offer free counseling and educational resources. They should help you create a budget and manage your finances to avoid future debt. Any resources should be available on their website or through direct communication.

Debt Consolidation Loan Options

A debt consolidation loan is a personal loan that uses one lump sum to combine everything into a single monthly payment. Here are the main pros and cons of getting a debt consolidation loan:

Pros of Debt Consolidation Loans

  • Can help improve credit through on-time payments.
  • Lower monthly interest rate and more affordable monthly payments.
  • Easier to manage than multiple debts with different due dates.
  • Secured loans are fairly easy to get.
  • Unsecured debt consolidation loans don’t require collateral, so there’s less risk to the borrower if they default.
  • One payment means you can save money on late fees.
  • Longer loan terms mean minimum monthly payments can be kept low.

Cons of Debt Consolidation Loans

  • Applying for one may temporarily damage your credit due to the initial hard inquiry. Getting one may also damage your credit since your credit utilization will increase.
  • Secured debt consolidation loans require the borrower to put up collateral. This could be anything from real estate to a paid-off vehicle. If you default, the lender may take the collateral.
  • Loan terms may be longer than the original debt. This means the total interest owed may be more over the life of the loan.
  • Unsecured loans may have higher interest than secured loans. They may also require a higher credit score to qualify.

Best Debt Consolidation Loans

Many lenders offer debt consolidation loans. Here are a few of the best ones.

  • Lending Club : Lending Club offers debt consolidation loans with a maximum of $40,000 with 3 to 5-year repayment terms. These loans do come with an origination fee, but they do not have prepayment penalties. Borrowers must have a 600 FICO score or above to qualify.
  • LightStream : With a low starting interest rate of just 4.99%, LightStream is a great option for debt consolidation. It offers loans up to $100,000 with various repayment terms.
  • RocketLoans : If you don’t have the best credit and are having trouble getting a loan from other lenders, consider RocketLoans . They offer loans ranging from a couple of thousand dollars up to $40,000. Loan terms range from three to five years and have an APR from 5.97% to 29.99%.

For more options, check out this article on the best debt consolidation loans . Or, if you have bad credit and need a debt consolidation loan, check out this article .

Is debt consolidation right for you? Watch this to learn the pros and cons:

Other Debt Relief Options

Looking for other ways to reduce or get rid of debt? Here are some of the best options.

Balance Transfer Credit Card

A balance transfer credit card lets you move debt from one credit card to another. This is beneficial if your current credit card comes with higher interest than the new one. Transferring the balance can make the debt more manageable. It can also decrease how much you end up owing by hundreds or even thousands of dollars.

Not all credit cards are good for balance transfers. Look for a balance transfer credit card with 0% introductory APR and a $0 annual fee. Keep in mind, the transfer may cost between 3% and 5% of the total amount transferred. If the new card has a lower limit, then you may not be able to transfer the full amount. Qualifying can be difficult: most balance transfer credit cards also require a good credit score and a debt-to-income ratio under 36%.


If you have student loans or a mortgage, you may qualify for forbearance. Forbearance lets you temporarily postpone payments on certain debts. These debts will probably still accrue interest while in forbearance though, so you may have to pay that. You won’t have to pay the principal balance though.

The terms of forbearance vary by lender. Some lenders will also require a clear reason why you need the forbearance (ex. medical emergency or lost job).


Deferment lets you postpone making payments on an account for a set period. Loans do not usually accrue interest in deferment. If they do, you won’t have to pay until the deferment period is over. Deferring certain loans, such as student loans, does not generally impact your credit score.

Loan Modification Programs

Loan modification programs allow you to change the terms and conditions of your original mortgage loan. Doing so can extend the loan’s terms and reduce interest rates. This can result in lower monthly payments. In some cases, the lender may put the principal amount of the loan in forbearance. If they do, you’ll only need to pay the interest each month, rather than the principal.

A loan modification is good for people who struggle to make their payments on time or are behind. It’s also useful when refinancing a mortgage would not result in lower monthly payments.

Debt Forgiveness Programs

A debt forgiveness program is where the lender or creditor cancels all or part of the debt you owe. There are various debt forgiveness programs out there. For example, the U.S. Department of Education offers one to those with federal student loans. This program is based on an income-driven repayment plan.

Another option is debt cancellation. In this case, all debt is completely wiped. Some of the canceled debt may be taxable, however, which could affect how much you owe to the IRS.

The type of debt and how much you owe are key factors in determining whether or not the debt is forgiven. For instance, educators may qualify for student loan forgiveness. Reach out to a nonprofit credit counseling agency or debt settlement company to see if you qualify.

Voluntary Surrender

If you can’t make payments on your home or vehicle, another option is voluntary surrender. With voluntary surrender, the original lender will take back the vehicle (or home) and sell it. You may have to pay the difference between the original loan and the sale price. You may also have to pay for things like late payment penalties. However, voluntary surrender doesn’t hurt your credit as much as repo or foreclosure.


Although it’s generally considered a last resort, bankruptcy may be an option in certain circumstances. For instance, if you have large amounts of unmanageable debt, poor credit, or are unemployed, it may work for you.

Bankruptcy is expensive, though, and will remain on your credit report for seven years. Additionally, filing will not remove all debts such as taxes or child support. Debts it will clear include:

  • ​Credit card debt
  • Overdue bills turned over to collection agencies
  • Certain utility bills
  • Medical bills
  • Personal loans
  • Business debts
  • Some unpaid/overdue taxes

The type of bankruptcy you file also has an impact on which debts are cleared and its full impact on your credit report. For more information, check out this article on the different types of bankruptcy . Before going this route, speak with a bankruptcy attorney to make sure it’s the right step for you.

Are there Government Debt Relief Programs?

No, but there are multiple nonprofit consumer credit counseling agencies and other debt relief programs out there. Many of these programs are funded by grants from credit card companies or local organizations.

National Debt Relief Hardship Program

The National Debt Relief Hardship Program is one of the largest debt settlement companies in the United States. It helps people who have a lot of unsecured debt and struggle to pay it. To qualify, you may have to prove you’ve recently suffered a financial hardship like a lost job or difficult divorce.

Here are some key facts.

  • No payment is required until the debt is settled.
  • The average consumer pays between 15% and 25% of the total debt.
  • They offer a free consultation with a certified debt specialist. They also provide a personalized debt consolidation quote.
  • Debt is combined into one monthly payment, but the program does not offer debt consolidation loans.
  • The program lasts between two and four years.

The Bottom Line

Even good debt can become stressful and hard to manage. If you feel like you’re fighting an uphill battle, a debt relief program may be right for you. With the right program, you can get ahead of your debt and get in control of your finances. Make sure you consider your options though. That way, you can pick the program that works best for you.

If you’re interested in learning more about debt relief, click here to fill out our questionnaire .


Does Applying for Financial Hardship Hurt Your Credit Rating?

Simply applying will not impact your credit, but enrolling might. Any program or payment plan you choose will go on your credit report. Plus, if the plan results in a closed or new account, it could hurt your credit rating. This could make it harder to qualify for future loans or lines of credit in the short term. Less-than-perfect credit history could make it harder to qualify for future loans or lines of credit in the short term.

Can I Get My Debt Written Off?

This depends on the type of debt. For instance, a credit card issuer may eventually write off the debt if there’s no chance of them collecting payments on it. They may only do so in certain cases though (ex. long-term unemployment or major health issues).
Once the creditor writes off the debt, they’re essentially agreeing not to pursue payments for it. A debt write-off does not make the debt disappear from your credit report, so it may damage your credit.

How does Debt Affect My Credit Score?

There are a few ways. For one, one late payment (30+ days late) will show up on your credit report for up to seven years. If you’re using more than 30% of your available credit, it will also hurt your credit score. Plus, if you have a lot of debt, it may be harder to qualify for new loans or lines of credit.

How Can I Stop a Debt Collector from Calling Work?

Debt collectors are not allowed to contact you at work unless you say otherwise. The Federal Trade Commission has strict rules about contact from debt collectors. If they are harassing you at work, send a written letter to request that they stop. In the letter, mention that you will take legal action if they don’t agree to stop calling your workplace.

What are the Four Types of Debt?

The four main types of debt are unsecured, secured, installment, and revolving.
Unsecured debt does not require collateral. This means your credit will be a key factor in determining your eligibility. Secured debt does require collateral. This puts less of the risk on the lender and more on you if you default on the loan.
Installment debt is debt you repay over a set period of time (typically in fixed monthly payments). Revolving debt, or credit card debt, is open-ended and can increase or decrease as you use it.

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