Compare debt relief options

Six approaches, different tradeoffs

This table is a starting point for questions, not a recommendation for your personal circumstances. Done With Debt is not a lender, law firm or credit counseling organization.

Approach	What it does	What to examine
Repay directly	Pay creditors from your budget; direct extra money toward priority debts	Affordability, interest and the time required
Creditor hardship	Ask an existing creditor for changed payment terms	Available help, duration, interest and account restrictions
Consolidation loan	Replace debts with a new loan	APR, fees, term and any collateral
Credit counseling or debt management	Review finances and potentially coordinate repayment	Agency fees, creditor participation and plan terms
Debt settlement	Seek agreements for less than the amount owed	Fees, credit damage, collections and creditor refusal
Bankruptcy	Use a legal process to address debts	Eligibility, assets, debts affected and legal consequences

Sources: CFPB: Comparing debt relief approaches · FTC: How to get out of debt · U.S. Courts: Bankruptcy basics · CFPB: When you cannot pay your credit card bills

Look beyond a lower monthly payment

A lower payment may result from a lower rate, a longer term or a different approach to the debt. Those changes have different costs. Ask what you would pay in total, which fees are included and what remains owed at the end.

For example, paying $300 for 60 months totals $18,000, while $400 for 36 months totals $14,400. This arithmetic compares two hypothetical schedules only. It does not show which offer is available, appropriate or cheaper after fees for your situation.

Sources: CFPB: Comparing debt relief approaches

If repayment is manageable but expensive

A budget and repayment order can help you use extra money deliberately. The avalanche approach prioritizes higher interest rates; snowball prioritizes smaller balances. Both still require payments on the other accounts.

Ask your creditor about hardship terms if you are struggling. If considering a consolidation loan, compare its APR and total cost, not just the convenience of one payment. Done With Debt does not make consolidation loans.

Sources: CFPB: Comparing debt relief approaches · FTC: How to get out of debt · CFPB: When you cannot pay your credit card bills

If required payments are not affordable

Nonprofit credit counseling can help you review your budget and repayment options. Ask about fees and whether a debt management plan is optional. A plan generally focuses on repayment rather than forgiving principal.

Debt settlement has different risks and uncertain outcomes. Bankruptcy is a legal process with eligibility rules and consequences that a qualified attorney can explain. We do not provide bankruptcy advice or decide which legal option fits you.

Sources: CFPB: Comparing debt relief approaches · FTC: How to get out of debt · U.S. Courts: Bankruptcy basics

Use the same questions for every option

Write down what you are trying to change and ask each organization to explain how its proposal addresses that problem.

What is the total expected cost, including fees and debts outside the proposal?
What happens if my income falls or I miss a payment?
What can happen to my credit, assets and creditor relationships?
Who provides the service, and how is that company paid?
What alternatives can I consider before making a commitment?

Sources: CFPB: Comparing debt relief approaches · FTC: How to get out of debt

Sources and further reading

General educational information. This guide does not assess your circumstances or replace financial, legal or tax advice. Read our editorial policy.