Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Personal Finance Is Debt Relief a Good Idea? Updated Feb 21, 2025 2-min read Expert Approved Expert Approved This article has been reviewed by a Certified Financial Planner™ for accuracy. Written by Lindsay VanSomeren Written by Lindsay VanSomeren Expertise: Mortgages, personal loans, student loans, auto loans, banking, budgeting, debt, insurance, credit cards, credit Lindsay VanSomeren is a personal finance writer living in Suquamish, Washington. She's passionate about helping people learn how to manage their money better so that they can live the life they want. In her spare time, she enjoys outdoor adventures, reading, and learning new languages and hobbies. Learn more about Lindsay VanSomeren Reviewed by Rand Millwood, CFP® Reviewed by Rand Millwood, CFP® Expertise: Financial planning, investments, education planning Rand Millwood, CFP®, CIMA®, AIF®, is a partner at Guardian Wealth Partners in Raleigh, North Carolina. His firm assists clients of all ages and areas of life (with a strong background in the medical and legal fields) in planning, investing, and preparing for retirement and other financial goals. Learn more about Rand Millwood, CFP® No, debt relief isn’t a good idea for most people. Several other ways to handle debt are less risky, less expensive, and offer more guaranteed outcomes than debt settlement. However, if you find yourself overwhelmed with debt, in a difficult financial situation, and you’ve exhausted your alternatives, then yes, debt relief can be a good idea. We recommend debt relief if you fit the following criteria: Your debt is eligible for debt relief—typically this means you have a lot of debt from unsecured loans, like credit card debt, payday loans, or medical debt. You’re already behind on your debt payments. Your financial situation (such as low income, no assets to leverage, and poor credit score) rules out alternatives like personal debt consolidation loans and home equity loans. You’ve ruled out all other options, including credit counseling and bankruptcy. You’re not confident in your ability to negotiate a settlement with your creditors on your own. You understand how the debt relief company will be paid and how your monthly payments will be saved in an escrow account during the negotiation process. You’re willing to accept the risk that it won’t work, and you’ll have to find another path forward once the process concludes. You’re willing to accept the rare but possible event of being sued by your creditors due to nonpayment. You can identify a reputable debt relief company and avoid scams (we can help you with this part.) You can see why many people might not fit these criteria. After all, if you can make all your normal debt payments and still have some extra available to pay more than minimum payments, another alternative, such as a debt management plan or debt consolidation loan, may work better and cause less havoc with your credit score. Debt relief programs are usually a last resort once you’ve evaluated personal loans, HELOCs, debt negotiation with the creditor, and likely even a 401(k) loan. If this is your last opportunity, search out groups that specialize in this area and are not overly pushy in trying to get you to move forward. These are likely bad actors just looking to take your money and not do much to help you. Also, always know and watch the associated costs closely. Rand Millwood, CFP® Rand Millwood , CFP®, CIMA®, AIF® Learn more about debt relief Read: What Is Debt Relief, and How Does It Work? Read: 14 Pros and Cons of Debt Relief Programs Read: The Best Debt Relief Companies and How They Work [2025 Edition] Here are the debt relief companies we’ve reviewed and given the highest editorial ratings due to their practices, reputations, success rates, and more: Company Best for… Rating (0-5) 4.9 Visit Website Best Overall 4.9 Visit Website 4.6 Visit Website Best for Debts Under $10,000 4.6 Visit Website 4.4 Visit Website Best for Customer Experience 4.4 Visit Website