Once people hear what I do, the next question is usually some version of this: “Oh, so you’re like those debt relief companies?” It’s a fair question.

There are many kinds of insurance agents, attorneys, and investment advisors, and there are just as many kinds of debt companies, all over the internet, TV, and radio. They all promise roughly the same thing: less debt, sooner. From the outside, they blur together.

They aren’t the same. You wouldn’t hire a real estate attorney to handle your taxes, even though both are lawyers. Each of the seven paths below is real, and each is right for someone. Pick the wrong one and you’ll pay for help you didn’t need or miss the help you did.

This post lays out the seven main paths: what each one actually does, who it fits, what it costs, and where it can hurt you. One of them is close to what I do. The other six aren’t. If you finish this and decide you don’t need anyone’s help, that’s a perfectly good outcome.

First, a word about “debt relief”

“Debt relief” sounds like a category. In practice, it’s mostly a marketing label. Debt settlement companies use it most, but you’ll also see it on credit counseling, consolidation loans, and a few things that are none of the above.

So when an ad promises debt relief, the right question is: relief how? There are only four ways to get out of debt faster: pay more, pay sooner, pay less interest, or owe less.

Every product on this list pulls one or more of those levers, and each one affects your credit and your wallet differently. The seven options below are sorted by what they actually do, not by what they’re called.

One number to know first

This post is a map, not a sales pitch. Each of the seven options is right in some cases and wrong in others, and I’ll write a deeper post on each one. Links will appear here as they go up.

Before you read them, though, it helps to know one number: how much money is left over each month after your bills are paid. That number decides which of these options even apply to you. Most people guess, and most people guess wrong. If you’re not sure of yours, the Cash Flow Calculator helps you figure it out in a few minutes. It’s free, and no email is required.

The seven options

1. Pay more than the minimum, on your own or with a guide

You keep making every minimum payment. Then you pick one debt to attack first. The two classic orders are highest interest rate first (often called the avalanche, which saves the most money) and smallest balance first (the snowball, which builds momentum). Both work if you stick with them.

Here’s the part most people miss: this works even if nothing is left over at the end of the month. The key is to keep paying the same total you pay today. As a card balance falls, the card company will lower your minimum payment. Keep paying the amount you were already paying.

And when a debt is paid off, don’t spend that payment. Roll it to the next debt on the list. Your budget doesn’t change, but every payoff makes the next one come faster.

Money left over each month makes it faster still. There are over a dozen ways to speed this up, from paying on payday to asking a card company for a lower rate, and every one of them pulls one of those four levers. And your credit usually improves as balances fall.

This fits anyone whose take-home pay covers all their minimum payments.

The catch is that knowing what to do is simple, and doing it for three or five years is hard. A car repair, a holiday season, or eating out too much because you’re too tired to cook can stall it.

Doing this with a guide is where I come in. I review those strategies with you, build the plan together and, most importantly, check in regularly until it’s done.

Plenty of people can figure out avalanche or snowball on their own. But like most things to do with money, the calculator part is simple arithmetic. It’s the behavior (the habits and misconceptions we all carry) that gets in the way.

2. Consolidation

A new personal loan, a balance-transfer credit card, or even a fixed-rate second mortgage pays off several debts, leaving you one payment, ideally at a lower rate. It fits people with good credit and steady income who can clearly get a better rate than they have now.

The costs are often modest: balance transfers commonly charge a fee on the amount moved, and personal loans charge an origination fee. Your credit takes a small hit from the new account and recovers as you pay it down.

A second mortgage deserves its own look. It ties debt that used to be unsecured to your house, and it comes with closing costs. Weigh both against the interest you’d save. For many people, it’s still the better solution.

Consolidation moves debt. It doesn’t remove it. Before you sign, ask one question about the lower payment: lower compared to what, and for how long? A longer term costs more in total interest only if you pay the new, lower amount. Keep paying what you paid before, and the lower rate works for you instead of the calendar.

Promotional rates end. And freshly cleared credit cards have a way of filling back up. That’s the behavioral finance thing again.

3. Nonprofit credit counseling and debt management plans

A credit counselor, usually at a nonprofit, reviews your whole budget with you. If it helps, they set up a debt management plan: you make one monthly payment to the agency, and the agency pays your creditors, often at reduced interest rates (CFPB).

This fits people who are just keeping up, or starting to slip, because their rates are so high the balances barely move. It also fits people who simply want structure and someone in their corner. Counseling agencies may charge fees for the plan, and you still repay the full balance. Counselors can’t erase debt.

This is the most underused option on the list. Many people jump straight to settlement when a counselor could have lowered their rates without the credit damage.

4. Debt settlement

A settlement company negotiates with your creditors to accept less than you owe, usually in lump sums you save up first (CFPB). To be fair, for a household that truly can’t repay, a negotiated settlement can beat years of collection calls or a full bankruptcy.

It carries real costs. Companies often tell you to stop paying your creditors while they negotiate, and your credit can be badly damaged in the meantime, with late fees, interest, and possible lawsuits. Many lenders won’t negotiate with settlement companies at all. And any amount forgiven may be taxable income, though exceptions exist, such as being insolvent when the debt is forgiven (CFPB; IRS). Ask a tax professional before you settle.

One protection worth knowing: since 2010, federal rules bar for-profit companies selling debt relief by phone from charging a fee until they’ve actually settled at least one of your debts, you’ve agreed to the terms, and you’ve made a payment under that agreement (FTC). If someone asks for money up front, walk away.

5. Credit repair

Credit repair companies dispute items on your credit report. That can help your credit score if your report has genuine errors. It isn’t a debt solution, though. It doesn’t lower a single dollar you owe.

You can do this yourself for free. AnnualCreditReport.com is the one site federal law authorizes for free credit reports, and you can pull your reports from all three bureaus (Equifax, Experian, and TransUnion) every week at no cost (CDIA). No credit card, no trial subscription. If you find an error, you can dispute it directly with the bureau, also at no cost.

Accurate negative information can’t be removed just because it’s unflattering; most of it ages off after seven years (CFPB). And by federal law, a credit repair company can’t charge you until the work it promised is fully done (15 U.S.C. §1679b).

6. Velocity banking and HELOC payoff programs

These programs have you run your paycheck through a home equity line of credit (HELOC), sometimes one that replaces your first mortgage, and pay your bills from there. In the other common version, you borrow a lump sum from a line of credit (usually a second mortgage or a personal line of credit) and apply it to your mortgage, often called “chunking.”

They’re usually sold as a way to pay off a home years early without changing your budget, often with a sizable program fee.

The pitch usually turns on interest math: your mortgage “front-loads” interest, while a HELOC charges simple interest on your daily balance, so routing your paycheck through the line supposedly beats the lender. It doesn’t. Both charge interest on what you owe.

The people who sell this mostly believe in it, and organized borrowers do like the discipline it creates. So we tested it. Against 36 years of interest-rate history, the version usually sold (a HELOC in second position behind your mortgage) never beat a simple fixed-rate plan using the same extra cash. It didn’t win once, at any time horizon we tested. The first-mortgage version won about 5% of the time after fees, only for people who happened to start just before rates collapsed, and its losses ran four to five times its wins.

There’s also structural risk. HELOC rates are adjustable, and lenders can freeze or reduce a line, as many did in 2008. And for all the talk of not changing your budget, these programs only work when money is left over each month. What pays a mortgage off early is extra cash going to principal. The account structure doesn’t add any.

7. Bankruptcy

Bankruptcy is a legal process in federal court. Chapter 7 is a liquidation: some assets may be sold, and many debts are discharged. Chapter 13 lets you keep your property and repay over three to five years under a court-approved plan. Either way, you must complete credit counseling with an approved agency within 180 days before filing (U.S. Courts).

It fits households whose debts can’t realistically be repaid, even with help. The effect on credit is serious and long, and not every kind of debt can be discharged. If you’re here, talk to a bankruptcy attorney before anyone else.

Bankruptcy isn’t a moral failing. I’ve had many clients who went this route because of things truly beyond their control, like medical bills.

The idea of releasing people from debts they can’t repay is ancient: Judaism (Deuteronomy 15:1–2), Christianity (Matthew 6:12), and Islam (Qur’an 2:280) all make room for it. Congress wrote it into federal law for people whose debts outgrew any honest way to repay them.

The seven options, side by side

Two questions that sort it

Seven options can feel like a lot. Two questions narrow them fast.

First: can you make every minimum payment each month?

If the answer is no, start with a nonprofit credit counselor. They’ll look at your whole picture and tell you honestly whether a debt management plan, a settlement, or a conversation with a bankruptcy attorney makes sense.

If the answer is yes, Option 1 works for you starting today, even with nothing left over. Hold your payment steady and roll each paid-off debt into the next.

Consolidation can help when it truly lowers your rate. A longer term is fine, as long as you keep paying what you were paying before. That’s how a 25-year loan gets paid off in three. And if your rates are so high the balances barely move, a debt management plan is worth a call.

Second: after your bills are paid, is anything left over each month?

If yes, you have a lever. Every extra dollar sent to the right debt moves your date closer. The next step is to see your date: enter your debts, your rates, and what’s left over each month, and the planner shows how soon your debt could be paid off and how much interest you’d save. About three minutes, and you keep the result. If you’re still guessing at what’s left over, start with the Cash Flow Calculator.

From there, you can run the plan yourself. If you’d like a guide for the hard part, that’s the work I do.

Sources

• CFPB: What is debt settlement?

• CFPB: How does a debt management plan work?

• CFPB: What is a bankruptcy?

• FTC: Final rule on debt relief services (2010)

• Credit Repair Organizations Act, 15 U.S.C. §1679b

• CDIA: Equifax, Experian, and TransUnion make free weekly credit reports permanent (2023)

• IRS Publication 4681: Canceled Debts, Foreclosures, Repossessions, and Abandonments

• U.S. Courts: Chapter 13 bankruptcy basics

• Velocity banking back-test: Kent Kopen, 36 years of rate history (2026); full analysis to be linked when the research page is live