Carrying debt can feel like a constant burden that’s hard to shake—especially with high interest rates. While different debt relief options are available, each comes with its own set of considerations.
What is Debt Relief?
Debt relief refers to strategies or programs that help you reduce or restructure the amount of debt you owe. This makes paying back debt more manageable and can help you avoid defaulting on loans or filing for bankruptcy.
Debt Relief Options
Credit Counseling
If you’re struggling to pay back your debt on unsecured loans like credit cards, medical bills, or personal loans, credit counselors can help you get on track. The best option for credit counseling is to make an appointment through a nonprofit consumer credit counseling agency. A certified credit counselor will review your expenses, help you create a budget that works for you, and provide greater financial literacy. Nonprofit credit counseling agencies are obligated to promote financial responsibility through free education and counseling services, so you won’t have to worry about additional fees.
A Debt Management Plan
Through counseling, you may also decide to enroll in a debt management plan (DMP). This allows your counselor to work with your creditors to consolidate your credit cards into one affordable monthly payment while also reducing your interest rate, making it easier to pay back your balances in three to five years.
Debt Settlement
Another option for debt relief is debt settlement, but this carries a number of risks and should only be a last resort. For one, debt settlement companies charge high fees, while a DMP usually only costs a small fee between $40–$75 to cover the cost of managing your program. While debt settlement may help you pay off your debts for less than you owe, debt settlement companies are for-profit, third-party companies that typically charge 15%–20% of your settled debt. They often advise clients to stop paying on their credit cards altogether during the settlement process with their lenders. However, this will cause your account to become delinquent, accruing late fees and penalties that will ultimately cost you more money while damaging your credit score. Lenders are also not obligated to settle, leading to more negative hits on your finances.
Bottom Line
According to a 2025 Bankrate survey, 46% of credit cardholders have card balances, with about 23% reporting they don’t think they’ll ever pay it off. But that doesn’t have to be your story. You can regain financial stability and pay down your debt by pursuing debt settlement with the right organization.