Debt Relief US: Every Way to Get Out of Debt in 2026 (Free Guide)

You have six tabs open, three of them promising to cut your debt in half, and you can’t tell which one is real.

Before you pick anything, put your debts in one place. The free AI Debt Payoff Planner shows what each option would do to your payoff date.

Three questions that point you to an option

• Can you repay everything if the interest were lower? If yes, look at a debt management plan, a consolidation loan or simply asking for a lower rate.
• Is the debt too big to repay in about five years? NerdWallet’s rule of thumb is debt equal to half your gross income or more, and five or more years to clear it. That is when settlement or bankruptcy gets a serious look.
• Has anyone sued you or started garnishing your pay? Then the clock matters more than the interest rate. Go to the section on lawsuits below first.

Source for the 50% and five-year rule of thumb: NerdWallet.

Your options side by side

Sources: NerdWallet, InCharge, U.S. Courts.

Start with the free options

Call each creditor and ask for a hardship plan or a lower rate before you pay anyone to do it. It costs nothing. See our how to pay off debt guide for the order to attack balances, and the minimum payment trap calculator to see what minimums really cost.

If you can repay in full at a lower rate, a nonprofit debt management plan pools your payments into one. The InCharge page says fees are likely waived and the plan usually runs 36 to 60 months, with cards closed (InCharge). The NFCC offers free and low-cost counseling at nfcc.org or 877-360-6322.

For consolidation, see our consolidation guide, the debt consolidation calculator and balance transfer vs consolidation loan. Don’t borrow against your home or your retirement plan to do it. NerdWallet lists both as options to avoid (NerdWallet).

When settlement or bankruptcy is on the table

Settlement means you stop paying creditors, save money, and a company negotiates lump-sum offers. InCharge says expect fees of 20% to 25% of the debt, accounts get marked “settled” rather than “paid in full”, and creditors can sue or sell the account to collectors while you wait (InCharge). On an illustrative $12,000 of enrolled debt, 20% to 25% is $2,400 to $3,000 in fees alone. Try the debt settlement calculator, and compare options in consolidation vs settlement vs bankruptcy.

Chapter 13 is a repayment plan. If your income is below your state’s median, it runs 3 years unless the court allows longer, and above the median it generally runs 5. It can’t exceed 5 years. The filing fee is $235 plus a $75 administrative fee, and you need credit counseling within 180 days before filing (U.S. Courts). Chapter 7 takes about six months (NerdWallet). Talk to a bankruptcy lawyer or legal aid before deciding.

If you’ve been sued or your pay is being taken

• Served with papers: getting sued for debt
• Wages: wage garnishment and two creditors at once
• Bank account frozen: bank account levy
• Collectors crossing the line: know your rights and collector harassment
• Old debt: statute of limitations and debt validation letters

What each route does to your credit

A debt management plan has little long-term effect, though closing cards can lower your score for the first few months (InCharge). Settlement is likely to drop your score, and settled accounts are marked as such. Bankruptcy stays on your report for a long time: up to 10 years for Chapter 7 and seven years from filing for Chapter 13 (NerdWallet). A lower score is not the worst outcome if the alternative is a judgment, but it is a real price, so weigh it honestly.

Match your situation to a first move

These are general starting points we put together from the sources on this page, not advice for your case.

Which debts these options can reach

Most programs focus on unsecured debt: credit cards, medical bills, personal loans, some private student loans and utility bills (InCharge). Secured debts like a car loan or mortgage work differently, because the lender can take the asset. Federal student loans have their own rules and their own relief programs, and collections have been on and off this year, so check our guide to the student loan tax refund offset for the current picture.

Mistakes that make it worse

NerdWallet lists four moves to avoid: letting a secured debt such as a car loan slide to pay an unsecured one, borrowing against your home equity, borrowing from your workplace retirement plan, and paying whichever collector is shouting loudest (NerdWallet).

A 15-minute checklist before you choose

1. List every debt with the balance, the interest rate and the minimum payment.
2. Mark anything that is secured, in collections, or already in court.
3. Check old accounts against the statute of limitations before paying anything on them.
4. Work out what you can truly pay each month after rent, food and utilities.
5. Run the numbers in the payoff planner, then book a free session with a nonprofit counselor at nfcc.org.

How to spot a debt relief scam

The FTC says its 2010 rule bars for-profit companies that sell debt relief by phone from charging a fee before they settle or reduce your debt. Red flags include large upfront fees, vague promises to cut your debt and robocalls (FTC). NerdWallet adds that no program can promise to stop lawsuits or collector calls (NerdWallet).

What readers often ask

Which debt relief option is cheapest?

Usually the one you do yourself. Asking for a lower rate or a hardship plan costs nothing, and a nonprofit debt management plan often waives or keeps fees low (InCharge). For-profit settlement tends to cost the most, with fees of 20% to 25% of the debt on that page.

Will debt relief ruin my credit?

It depends on the route. A debt management plan has little long-term effect, though closing cards can cause a short dip (InCharge). Settlement and bankruptcy hurt more. Chapter 7 can stay on your report up to 10 years and Chapter 13 for seven years from filing (NerdWallet).

Can I stop wage garnishment with debt relief?

Sometimes, but no program can promise it. NerdWallet says relief programs can’t promise to stop lawsuits or collector calls (NerdWallet). Bankruptcy is the main route that pauses most garnishments. Start with our wage garnishment guide.

Is a debt settlement company worth it?

Often not. You stop paying, interest and late fees can grow, and creditors can sue (InCharge). Many people do better negotiating directly. Read our debt settlement companies guide before you sign.

Is it a scam if they want money before doing anything?

That’s a red flag. The FTC’s 2010 rule bars for-profit companies selling debt relief by phone from charging before they settle or reduce your debt (FTC). Report problems at reportfraud.ftc.gov.

Do I owe tax on forgiven debt?

Possibly. The page from InCharge says forgiven debt may be taxable as income (InCharge). See our guide to the 1099-C and cancelled debt tax.

I got a lawsuit letter. What now?

Don’t ignore it. A default judgment can lead to garnishment or a bank levy. Read what to do if you are sued today, and talk to legal aid or a nonprofit counselor.

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