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As of 2026-10-15
Owe more than you can comfortably pay? There are five main ways out: pay it down yourself, a balance transfer or consolidation loan, a debt management plan from a credit counselor, debt settlement, or bankruptcy. Here is which one fits your situation, in plain words, from the FTC, CFPB and IRS.
Sources: FTC: How to get out of debt · 16 CFR 310.4 (Telemarketing Sales Rule) · IRS Topic 431 (updated Sept. 24, 2026) · U.S. Trustee approved counselors.
| Your situation | Best move | Why (source) |
|---|---|---|
| I can make my payments, but the interest is eating me | Call each card company and ask for a lower rate. Then pay extra on the highest-rate debt first (avalanche calculator). | You can ask yourself, for free; no one needs to call for you (FTC). |
| I have good credit and want one payment | Compare a balance transfer or consolidation loan with the check below. Take it only if the total cost is lower. | Lower payments can come from a longer term that costs more overall; promo rates end (CFPB). |
| I'm behind or can't pay the minimums | Call a nonprofit credit counselor; ask about a debt management plan (DMP) and get fees in writing. | Counselors may get creditors to lower rates or waive fees; plans take 48+ months (FTC). |
| A debt collector is calling about an old debt | Talk to the collector once to confirm the debt is yours. Don't pay or promise anything yet. | In some states a payment or written promise can restart the time limit to sue (FTC). |
| A company offered to settle my debts for less | Try asking the creditor yourself first. Never pay up front, and get any deal in writing. | Fees before settlement are illegal; settlement can hurt credit and the forgiven part may be taxed (FTC; IRS). |
| I'm thinking of using my home to pay off cards | Usually don't. If you can't pay, you could lose your home. | Home equity loans add closing costs and foreclosure risk (CFPB). |
| My debts are far more than I could ever repay, or I'm being sued or garnished | Talk to a bankruptcy lawyer or legal aid. Take the required credit counseling first. | Bankruptcy can stop garnishments and collection but stays 10 years on your report (FTC). |
| I'm behind on my mortgage | Call your lender now, then a free HUD-approved housing counselor: 800-569-4287. | Never pay a company up front to save your home (FTC; HUD). |
Sources: FTC: How to get out of debt · CFPB: consolidating credit card debt (reviewed Sept. 2, 2026) · IRS Topic 431 · HUD housing counseling.
Sources: FTC: How to get out of debt · 16 CFR 310.4(a)(5) · IRS Topic 431.
Type what you owe now and the new loan's terms. We do the loan math and show it. It's arithmetic, not an offer.
Math used: months to pay off now = −ln(1 − r·B/P) ÷ ln(1 + r), with r = APR ÷ 12. New loan: to get your full balance after a fee taken out of the loan, you borrow balance ÷ (1 − fee). Payment = L·r ÷ (1 − (1 + r)−n). Assumes no new charges and a fixed rate. Too close to call when the two totals are within 3% of your balance.
| Option | What it is | Cost & risk | Credit effect |
|---|---|---|---|
| Do it yourself | Budget, call creditors, pay highest rate first | Free | Best, if you keep paying on time |
| Balance transfer card | Move card balances to a card with a low promo rate | Transfer fee (a % or a flat amount, whichever is more); rate rises after the promo; 60+ days late can raise the rate on all of it (CFPB) | New account and credit check |
| Consolidation loan | One new loan pays off the old debts | Interest plus fees or points (1 point = 1% of the loan); a longer term can cost more (FTC; CFPB) | New account and credit check |
| Debt management plan (DMP) | Nonprofit counselor sets a plan; you pay them monthly and they pay your unsecured debts | Fees vary: ask for them in writing; often 48+ months; may have to stop using credit (FTC) | You keep paying, so less harm than settlement |
| Debt settlement | A company (or you) asks creditors to take less than you owe | Fee only after a settlement; late fees grow meanwhile; you can still be sued; forgiven part may be taxable (FTC; IRS) | Likely damaged (missed payments) |
| Bankruptcy (Ch. 7 or 13) | Court order that wipes out or reorganizes certain debts | Filing fees of several hundred dollars plus lawyer; usually doesn't erase child support, most taxes, most student loans (FTC) | Up to 10 years |
Sources: FTC: How to get out of debt · CFPB: consolidating credit card debt.
Sources: 16 CFR 310.4(a)(5) · FTC: Debt settlement · IRS Topic 431 · IRS Pub. 4681. Report problems at ReportFraud.ftc.gov or the CFPB.
If you can still pay, call each card company to ask for a lower rate and pay extra on the highest-rate debt first. Consolidation only helps if the total cost is lower and you stop adding debt (FTC, CFPB). If you're behind, talk to a nonprofit credit counselor.
Only if the total cost, interest plus fees, is lower than what you'd pay now. A lower monthly payment can come from a longer term that costs more overall, and teaser rates can rise (CFPB).
No. Under the FTC's Telemarketing Sales Rule (16 CFR 310.4(a)(5)), it can't charge any fee until it settles at least one debt and you make at least one payment under that settlement.
Generally yes: canceled debt counts as income for the year it's canceled, and the creditor may send Form 1099-C. Exclusions include bankruptcy and insolvency (IRS Topic 431, Pub. 4681).
A plan set up by a credit counselor: you pay the counselor each month and they pay your unsecured debts, often at lower rates or with fees waived. It can take 48 months or more (FTC).
No. VaultRubric republishes facts from the FTC, CFPB and IRS with dates, and the consolidation check is simple loan arithmetic.
Estimates, not financial advice. Taxes, insurance, PMI and fees vary by lender, county and city; confirm with your lender, dealer and state agency before acting.