Debt can become overwhelming when monthly payments take up too much of your income or an unexpected expense makes it difficult to keep up. Credit cards, medical bills, personal loans, and other debts can quickly become harder to manage when interest, fees, and missed payments accumulate.
There may be ways to get help with debt without simply taking on another loan. Options can include nonprofit credit counseling, debt management plans, negotiating directly with creditors, payment arrangements, medical-bill assistance, and other financial resources.
The Consumer Financial Protection Bureau recommends considering credit counseling and communicating with creditors when you are having trouble making payments.
Who May Need Help With Debt
Debt assistance may be useful for:
- People struggling with credit card payments
- Families dealing with medical debt
- People with multiple monthly debts
- Households experiencing a sudden loss of income
- People behind on loan payments
- Seniors struggling with household debt
- Families facing unexpected expenses
- People receiving calls from debt collectors
- Individuals who need help creating a debt repayment plan
Eligibility depends on the type of assistance. Some services are available broadly, while others are based on income, the type of debt, or your financial circumstances.
Check What You May Qualify For
Checking potential eligibility is free. OpenGrants Network can help you explore assistance programs and resources that may fit your situation.
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Available programs can vary based on your financial situation, location, and type of debt.
Types of Help With Debt
1. Nonprofit Credit Counseling
A reputable credit counseling organization can review your finances, help create a budget, and discuss options for managing your debt. Credit counselors may also help you develop a debt management plan. These organizations are often nonprofits, although some services may charge fees.
2. Debt Management Plans
A debt management plan can combine payments toward certain unsecured debts into one regular payment made to the counseling organization, which then distributes payments to creditors. Depending on the circumstances, a counselor may be able to help lower interest rates or monthly payments. A debt management plan does not simply erase the amount you owe.
3. Negotiating With Creditors
If you are struggling to make payments, contact your creditor before the account becomes seriously delinquent. A creditor may have hardship options, payment arrangements, or other programs that could make payments more manageable. The CFPB specifically recommends contacting credit card companies promptly when you cannot make your payments.
4. Medical Debt Assistance
Medical debt may sometimes be reduced through hospital financial assistance or charity care. USAGov also points to credit counseling and debt management plans as possible ways to manage medical bills that remain unpaid.
5. Debt Repayment Arrangements
If you owe a debt that has already gone to collections, you may be able to negotiate a repayment arrangement directly with the collector. Before agreeing to anything, confirm that the debt is legitimate, determine what you can realistically afford, and get the agreement in writing.
6. Legal Assistance for Debt Problems
If a creditor or debt collector has sued you, or you believe your rights have been violated, consumer-law or legal-aid assistance may be worth exploring. The CFPB recommends looking for attorneys experienced in consumer law or debt collection and checking state-based legal aid resources for people who cannot afford an attorney.
How Debt Assistance Typically Works
- List your debts. Write down balances, interest rates, minimum payments, and due dates.
- Review your budget. Determine how much you can realistically afford each month.
- Contact creditors early. Ask about hardship programs or payment arrangements.
- Consider nonprofit credit counseling. A counselor can review your overall financial situation.
- Compare your options. A debt management plan may be appropriate for some people, while direct negotiation or another approach may make more sense for others.
- Get agreements in writing. Keep records of payment arrangements and communications.
- Avoid taking on unnecessary new debt. Make sure a new loan actually improves your financial situation before using consolidation.