Debt Relief Options

Finding an alternative to debt settlement is important when you have at least one unsecured debt account that is still with the original creditor. You simply have more attractive options when you can still negotiate with the original creditor. These are all alternatives to debt settlement.

Self-Guided Strategies

If you are earning more income or have reduced expenses and are now able to send more money each month, then you might consider getting back on track on your own. This involves sending in amounts greater than the normal minimum payment plus any fees so that both the balance and the subsequent "required minimum payment" amounts are lower.

Eventually, you could get the accounts caught up on your own, thereby eliminating late and over-the-limit fees while avoiding a charge-off. This can be done if you successfully keep the account from being turned over to collections. Charge-offs normally occur once an account is 6 months delinquent, so make sure you never fall that far behind.


Some creditors offer hardship relief to debtors who have had a temporary setback. This can include job loss or medical emergency that interferes with your ability to keep up with normal minimum payments. In order to qualify, you must prove that the impact on your finances was substantial and that you can expect to resume normal minimum payments within 6 months.

Hardship relief may include a temporary reduction in finance charges and a temporary reduction in minimum payment. Acceptances is solely up to each creditor's discretion. Gaining hardship consideration is difficult when you have multiple creditors as some may be more likely than others to grant your request.

Debt Management Plan

A debt management plan is designed for debtors who could pay off all of their unsecured debt within 3 to 5 years with the help of lower payments and reduced interest. Many major credit card companies sponsor these plans and provide benefits to help you eliminate your debt. Benefits can include substantially lower interest rates, a lower consolidated payment, re-aging of your accounts to reflect current status and a waiver of late and over-the-limit fees.

Some companies focus solely on debt management plans as a means for eliminating debt. Others use it only as one of many tools that are available. A reputable and effective organization will provide credit and financial counseling to determine which options are feasible for you. Expect your counselor to provide information, not advice. It is up to you to determine what your best option is.


If you cannot reasonably afford a debt management plan, then perhaps bankruptcy would be your best choice. Bankruptcy is an option to eliminate legal obligations for debt by providing protection from creditors and arranging partial repayment.

Chapter 7 bankruptcy is often referred to as liquidation. Your non-exempt assets could be sold in order to partially repay your creditors. An income test may apply in order to qualify. You may request a Chapter 7 Resource Guide for more information.

Chapter 13 bankruptcy allows you to repay a portion of your debt over a number of years through a court appointed trustee. Known as reorganization, this can allow you to gradually pay off a portion of your debt using future earnings.

Help with Options

If you are unsure which options are the most feasible for your situation, consider contacting a reputable credit counseling organization. The best credit counselors provide both credit and financial counseling. Look for certification through the Association for Financial Counseling and Planning Education or through the Council on Accreditation.

Through a thorough financial analysis, you will be able to see how your debt stacks up and how it affects your budget. This financial analysis can include details on options, including debt management plans, bankruptcy or self-guided strategies. See how you could benefit from a credit counseling session.

AddThis Social Bookmark Button

Need Help?

Call us now


Please provide your contact information below and we will call you as soon as possible. Thank you!

Fields with * are required.

Please enter the letters as they are shown in the image above.
Letters are not case-sensitive.