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What Are My Options for Debt Relief? Breaking Down the Four Main Debt Relief Options for U.S. Consumers

The United States offers a variety of debt relief options for individuals and families struggling with debt. These options include credit counseling, debt management plans, debt settlement, and bankruptcy.

Credit counseling is a service offered by nonprofit organizations that work with consumers to help them understand their financial situation and develop a plan to repay their debts. Credit counselors also provide education on financial management and budgeting.

A debt management plan, also known as debt consolidation, is a repayment plan that consolidates all of a consumer’s unsecured debts into one monthly payment. The payment is then disbursed to each creditor according to a pre-arranged schedule.

Debt settlement, also known as debt negotiation, is a negotiation process between a consumer and their creditors in which the creditor agrees to accept a lump sum payment that is less than the full amount owed in exchange for forgiving the remainder of the debt.

Bankruptcy is a legal process that allows individuals or businesses to have their debts discharged. There are several types of bankruptcy, but the most common for individuals is Chapter 7 bankruptcy. This type of bankruptcy allows the filer to have their non-exempt assets sold in order to pay off their creditors. After the debts are paid, the filer is then discharged from any remaining obligations.

If you are struggling with debt, there are options available to help you get back on track. Speak with one of our debt experts to explore which solution may be right for you.