There are four main options for resolving unsecured debt: a debt management plan (DMP), debt settlement, a debt consolidation loan, and bankruptcy. Each differs in total cost, timeline, credit impact, and who qualifies. A credit counseling session is often the one point where a consumer hears about them side by side.
In practice, most consumers do not hear about all four. Only 6% of consumers who spoke with a credit counselor recall hearing about all four main options, and 52% recall hearing about no more than one (Debt Disclosure Project/Harris Poll, 2026).
Which Options Go Undiscussed
| Option | Share who do not recall it being discussed |
|---|---|
| Bankruptcy | 81% |
| Debt consolidation loan | 58% |
| Debt settlement | 52% |
Source: Debt Disclosure Project/Harris Poll survey, conducted online August 28 to 31, 2026, among 1,504 U.S. adults. Base: consumers who spoke with a credit counselor. Accurate to within ±3.4 percentage points.
A DMP, the option the agency administers, was the most common recommendation (38%), and it led at every debt level, whether consumers owed under $10,000 or $25,000 or more (Debt Disclosure Project/Harris Poll, 2026). The gap is wider for some groups:
- Among consumers with $25,000 or more in unsecured debt, only 11% recall hearing about all four options, and 74% do not recall bankruptcy being discussed.
- Among households earning under $50,000, 66% recall hearing about no more than one option, compared with 50% in households earning $100,000 or more.
- Among households earning under $50,000, 62% do not recall debt settlement being discussed, compared with 49% in households earning $100,000 or more.
“I wish that I knew all the options I had, even the ones they wouldn’t recommend, so that I can make the choice on my own.” (Woman, 36, California, former DMP enrollee) (Debt Disclosure Project/Harris Poll, 2026).
What Industry and Government Data Show
Outside research on how counseling agencies operate lines up with the survey’s pattern of the DMP coming first.
| Source | Finding |
|---|---|
| FinRegLab and The Ohio State University (2023), data from 13 NFCC-recruited agencies | 60% of counseled consumers were referred for a DMP before the pandemic, and about 30% enrolled |
| Georgetown University Credit Research Center (2003) | About 72% of NFCC member agency revenue came from fair share fees paid by creditors out of client DMP payments |
| U.S. Senate Permanent Subcommittee on Investigations (2005) | Found agencies that “place every consumer onto a debt management program”; fair share generally amounted to 12% to 15% of payments |
Sources: FinRegLab, Debt Management Insights for Distressed Borrowers (2023); Elliehausen, Lundquist, and Staten (2003); S. Rept. 109-55 (2005).
A 2023 analysis of agency and credit bureau data found that 60% of counseled consumers were referred for a DMP and about 30% enrolled before the pandemic (FinRegLab, 2023). An earlier Georgetown study found that roughly 72% of NFCC member agency revenue came from “fair share,” the percentage of each consumer payment that creditors route back to the agency (Elliehausen et al., 2003). A 2005 Senate investigation found that a budget analysis used “solely to determine if a consumer is a candidate for a DMP fails to meet the charitable purpose” of a nonprofit agency (S. Rept. 109-55).
Of the four options, the DMP is the one that generates setup fees, monthly fees, and fair share for the agency. The other three do not.
What a Four-Option Comparison Looks Like
Hearing about every option matters because total costs differ widely. On $20,000 of credit card debt:
| Option | Total paid | Share of original balance | Timeline |
|---|---|---|---|
| Debt settlement | $15,000 to $16,000 | 75% to 80% | 36 months |
| Debt management plan | $25,041 | 125% | 50 months |
| Debt consolidation loan | $30,638 | 153% | 48 months |
Assumptions: Debt management plan figures assume $500 a month, a 7.5% interest rate after creditor concessions, and setup and monthly agency fees. Settlement figures are all-in, including fees, over 36 months. Consolidation loan figures assume the 670 to 739 credit tier, a 22.75% APR, and a 48-month term, excluding a 0% to 8% origination fee. Source: Debt Disclosure Project Cost Calculator.
Each option also carries different credit impact and eligibility requirements. A side-by-side comparison of three of these options found that settlement carries the lowest monthly payment for the same balance, while a DMP fits borrowers who can sustain a higher payment for four to five years.
Frequently Asked Questions
Do credit counselors explain all debt options?
Not consistently. Only 6% of consumers who spoke with a credit counselor recall hearing about all four main options, and 81% do not recall bankruptcy being discussed.
Why do credit counselors recommend debt management plans most often?
A DMP is the option the agency administers, and it is the only one of the four that generates setup fees, monthly fees, and fair share payments for the agency. In the 2026 survey, it was the most common recommendation at every debt level.
What are the four main options for unsecured debt?
A debt management plan, debt settlement, a debt consolidation loan, and bankruptcy. Each differs in total cost, timeline, credit impact, and who qualifies.
Sources
- Debt Disclosure Project. (2026). 9 in 10 consumers who met with a credit counselor wish they had received better information, new data shows. https://www.einpresswire.com/article/952363425/9-in-10-consumers-who-met-with-a-credit-counselor-wish-they-had-received-better-information-new-data-shows
- FinRegLab, Courchane, M., Gailey, A., Moulton, S., Tragesser, C., & Xie, R. (2023). Debt management insights for distressed borrowers: Credit counseling and lender forbearances post-COVID. https://finreglab.org/wp-content/uploads/2023/08/FRL_DB-CC_AugUpdate_FINAL-1.pdf
- Elliehausen, G., Lundquist, E. C., & Staten, M. E. (2003). The impact of credit counseling on subsequent borrower credit usage and payment behavior. Credit Research Center, Georgetown University. https://corpora.tika.apache.org/base/docs/govdocs1/272/272713.pdf
- U.S. Senate Permanent Subcommittee on Investigations. (2005). Profiteering in a non-profit industry: Abusive practices in credit counseling (S. Rept. 109-55). https://www.govinfo.gov/content/pkg/CRPT-109srpt55/html/CRPT-109srpt55.htm
- Debt Disclosure Project. (2026). Cost calculator. https://www.debtdisclosureproject.org/tools/cost-calculator/
- TechBullion. (2026). Three common debt options compared: Counseling, settlement, consolidation. https://techbullion.com/three-common-debt-options-compared-counseling-settlement-consolidation/