Debt Relief Programs- Find the Right Way to Get out of Debt

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Daniel Cohen

UpdatedJun 22, 2020

3 min read

Key Takeaways:

Review the pros and cons of the most popular debt relief programs.
Compare debt relief programs, before you choose one.
Commit to a debt relief program with affordable monthly payment.
Start your FREE debt assessment

Find the Right Debt Relief Program for Your Specific Needs

When you are searching for debt relief, it can be hard to figure out which of the many debt relief programs is right for you. There is no one-sized-fits-most debt solution. Each debt relief program has pros and cons. You can have the same financial situation as someone else (the same debt, income, assets, family size, etc.) and yet you could two different programs to pay off your debt- and both of you could be right.

Figure out which program has pros that outweigh the cons for accomplishing your financial goals. Your primary goal may be to get out of debt at the lowest total cost. Maybe finding the debt relief program with the lowest monthly cost is the most important goal, even if it takes longer to get out of debt. Paying off debt could be a high priority, but protecting and improving your credit score may be even more important to you. In that case, understanding the credit impact of each debt relief program is very important. The bottom line is that your individual goals will determine which of the many debt relief programs is right for you.

Prefer to Discuss Your Situation?

If asking questions and getting immediate answers is important to you, call 844-731-0836 to speak with one of our Enrollment Advisers. They have a full suite of debt solution options and are trained to consult with you to help you find the debt relief program that best suits your needs.

Here is a chart designed to help you weigh the pluses and minuses of the various debt relief programs. You will find the type of debt relief program with a list of its pros and cons.

After you look at the pros and cons, use the links in the "Type of Program" column to find more information about any debt relief programs that appeal to you.

Type of Program	Pros	Cons
Credit Counseling	Lowers interest rates	Payback is 100% of principal plus some interest
	Can lower monthly payment	Monthly payment may not drop enough to offer cash-flow relief
	Stops late fees	Monthly fees
	No collection calls	High dropout rate
		Credit rating impact
Debt Settlementt	Significantly lowers monthly payment	Credit rating impact
	Lowest cost to get out debt, while avoiding bankruptcy	Collection calls are possible
	Speeds up the time to debt freedom	Creditors can pursue legal action
Bankruptcy Chapter 7	Wipes out debts	Difficult to qualify
	Offers a fresh start	Process is public, which may be embarrassing
	Prevents levy or garnishment	May require liquidation of assets
		Severe credit impact
		Have to answer 'yes' on any job or financial application that asks if you ever filed BK
Bankruptcy Chapter 13	Stops collections	Doesn't erase your debts
	Prevents levy or garnishment	Severe credit impact
		Monthly payment can be high, offering no payment relief
		Public process
Debt Consolidation Loan Personal Loan	Lower interest rate	Requires excellent credit for best rates
	Convenience of one monthly payment	Doesn't address the reason debt existed,
	May extend the loan term	Many borrowers rtake out the loan and run up new credit card debt
	May lower monthly payment
Cash-out Refinance to Consolidate Debt	Interest rates far lower than unsecured loans, generally	Can increase total costs by extending repayment to 15 or 30 year term
	Increase cash-flow with smaller required monthly payment	Turns unsecured debt into secured debt
	Low rates for fair credit scores and above	Need to have sufficent equity and meet lender's requirements for credit and DTI
		You can be 'trapped' in your home, if the home value drops below the mortgage balance
Balance Transfer	Lower interest rate	Requires excellent credit
	Get out of debt faster	Interest rate skyrockets, if a payment is missed or late
		Low rate expires after 'teaser' period
		Can't transfer a balance from the same creditor
		Requires bigger monthly payment to pay debt off during low interest period

Debt Relief Pros and Cons

Debt Navigator

Use the Bills.com Debt Navigator to compare different debt relief programs. You will receive a recommendation based on your priorities. The Debt Navigator is free and has no impact on your credit.