Getting Relief From Debt Could Be Easier Than You Think!


If you are overwhelmed by debt, then you might be considering filing for bankruptcy. Don’t be too hasty in making this decision though! Many sources argue bankruptcy could actually be the worst course of action to take in such situations. The multitude of options available in regards to debt relief are crucial to understand, and shockingly effective solutions could be at your fingertips that are far preferable to bankruptcy.

An iPhone with the calculator app, a notepad, and banknotes lying on a table.

Instead, consider debt relief. Debt relief allows you to retain your assets and negotiate new, more cost-effective terms with your creditors.

Debt relief is easier to get than you may think – you can find many reputable credit counseling organizations that are ready to help! However, before getting in touch with anybody, you should understand what debt relief is and how it can help you.

What Is Debt Relief?

Debt relief is a set of means aimed at helping you get out of debt. Methods of debt relief include but aren’t limited to the following:

  • Reduction of the interest rate.
  • Partial or total waiver of the outstanding debt.
  • Consolidation of several debts into one larger debt, often with lower interest.
  • Extension of the debt term.

One thing to keep in mind with debt relief services is that they are generally intended for unsecured debt – that is, debt that isn’t secured by collateral like your car or home.

4 Types Of Debt Relief

Debt relief is sometimes considered a separate form of debt management, with its own distinct terms and tools.

However, you could also view debt relief as a set of any and all methods directed at reducing your debt load one way or another. This is roughly how the U.S. Federal Trade Commission presents debt relief in its guide [1].

With that in mind, here are 4 common forms of debt relief that you could make use of.

Credit counseling

To get credit counseling services, you need to address a credit counseling organization.

The main goal of a credit counselor is to educate you and provide you with advice on how to better manage your budget to successfully pay off your debt. After discussing your financial situation, credit counselors come up with a personalized plan to help you cope with your financial obligations.

Debt management plans

With debt management plans, you deposit money each month to a special account at a credit counseling organization. Then, the credit counseling organization typically negotiates with your creditor in order to lower your interest rate or achieve a waiver.

After finalizing terms with the creditor, the credit counseling organization uses your deposits to pay your debts.

Debt settlement

In debt settlement, you get in touch with a debt settlement company to waiver your outstanding debt amount partly or in its entirety. The debt settlement company negotiates with your creditor to convince them to forgive your debt in exchange for a lump sum.

Usually, debt settlement programs encourage you to stop paying to your creditors. Aside from that, debt settlement often incorporates monthly deposits that will be used to pay the agreed lump sum.

Debt consolidation

Finally, there is debt consolidation [2]. In debt consolidation, you take out a new loan to pay off other debts. Essentially, this allows you to combine multiple small debts into a larger one.

Debt consolidation typically implies better payoff terms, including but not limited to lower monthly payments or lower interest rates. However, you still have to make monthly payments in order to deal with your debts, whereas debt settlement, in contrast, allows you to significantly reduce or completely eliminate any outstanding debt.

Which debt relief option is right for you depends on your situation and needs. We suggest that you have a deeper look into each of these debt management types to better understand what you are dealing with.

How Does A Debt Relief Program Affect Your Credit?

Different forms of debt relief will affect your credit score differently. Not only that, but the effect of debt relief on your credit score ultimately depends on how well you follow the tips and strategies offered by your credit counselor.

No matter what, debt relief is generally preferable to bankruptcy. The U.S. Federal Trade Commission considers bankruptcy as a last resort for debt management [3]. Investopedia shares this opinion as well, and it also notes that bankruptcy can severely damage your credit score [4].

Should You Give Debt Relief A Shot?

If you are overburdened with debt, then debt relief services are most likely worth a try. If you cannot manage your debts by reducing your spending or saving more money, then you should consider debt relief.

Bankruptcy is also an option, but it’s last resort and should not be addressed unless you have no other way out of debt.

But as always, before committing to debt relief, we recommend that you research your options and try to understand what would be optimal for your situation.


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  1. “Coping with Debt”, the U.S. Federal Trade Commission,
  2. “Debt Consolidation”, Investopedia,
  3. “Debt Relief or Bankruptcy”, the U.S. Federal Trade Commission,
  4. “What You Need to Know About Bankruptcy”, Investopedia,