Three categories of debt options exist, and they work in fundamentally different ways. This section explains each one on its own terms.
Enter a balance and see the total cost and timeline across all three options, side by side.
Run the numbers ToolAnswer seven questions about your situation and see which category fits, and why.
Try the advisor| Bankruptcy | Debt Relief (Settlement) | Credit Counseling (DMP) | |
|---|---|---|---|
| What it does | Court process that discharges qualifying debt (Ch. 7) or restructures it (Ch. 13) | Negotiates enrolled accounts to resolve for less than the full balance | Repays the full principal at reduced interest rates; it does not reduce what you owe |
| Total repaid | Largely fixed cost; does not scale with balance | Roughly 75% to 80% of balance, all in | Roughly 110% to 130% of balance |
| Credit impact | On the report up to 10 years (Ch. 7) or 7 years (Ch. 13) | Significant drop during the program; enrolled accounts go delinquent by design | Accounts closed at enrollment; falling behind can revert accounts to the original rate |
| Typical timeline | Months (Ch. 7) or 3 to 5 years (Ch. 13) | 2 to 4 years | 4 to 5 years |
| Tends to fit when | There is no source of income to sustain repayment | The full balance can't be repaid, or the budget needs a materially lower monthly payment | The budget can comfortably sustain full repayment and near-term credit protection matters |
Accreditation from the NFCC or FCAA tells you an agency meets the standards the industry set for itself. In the NFCC's case, that body was founded by creditors and its board still includes creditor executives.. Treat it as a floor on conduct, not as evidence the program is your least expensive option. It is not a cost signal, and it was never designed to be one.
Chapter 7 and Chapter 13 explained for consumers: who qualifies, what each costs, what gets discharged, and the counseling federal law requires before filing. Bankruptcy carries the strongest legal protection of any option covered here.
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How debt settlement works, what it costs all in, and the trade-offs that come with it: credit impact during the program, creditor lawsuits, and taxes on forgiven debt. Start with how the option works, then see it against the alternatives in the Cost Calculator.
Read the latest: Best Way to Pay Off $25,000 in Debt: Total Cost by Credit Tier and Monthly Amount →
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Everything on file about credit counseling and debt management plans: how the program works, what it costs in total rather than per month, how agencies are paid, and how many people finish. Start with the cost explainer, then run your own balance in the Cost Calculator.
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