Credit card debt hit arecord-breaking $1.12 trillionin 2024.
While some third-party debt relief programs can definitely help you, not all of them are trustworthy.
This is especially true among companies offering “debt management plans” (more on that below).
Does it attempt to enroll you into a plan without assessing your financial situation?
Does it ask for upfront fees before doing any work?
Does it claim to offer help through a new government program you’ve never heard of?
Does it tell you to stop communicating with your creditors without explaining potential risks?
Does it promise to stop collection calls and lawsuits?
If a company or program does any of the above, proceed cautiously and do some research.
Check the Better Business Bureau for accreditation information, ratings, reviews and complaints from past customers.
The costs of credit counseling agencies and their services vary.
Some credit counseling agencies will set you up on a debt management plan.
Most debt management plans take 48 months or longer to complete.
The money is used to settle debts for less later on.
However, debt settlement is never guaranteed, and these plans aren’t free.
You could also get relief from credit card debt through adebt consolidation loan.
Debt consolidation loans let youconsolidate all your debtsand make just one payment each month at a fixed interest rate.
If you have crushing amounts of debt, the last resort could be to declare bankruptcy.
Both types of bankruptcy stay on your credit report for 10 years.
Thisdebt payoff strategyhelps you get rid of smaller debts first so you could focus on the bigger ones.
The bottom line
Credit card debt relief can look different depending on the program you choose.
