Debt Relief Options


There are several debt relief options available to consumers struggling with a financial hardship. The following list provides a brief description of each option in no particular order. We recommend that consumers conduct their own due diligence when exploring debt relief.

Payment in Full

Most consumers assume that the only way to resolve their outstanding debts is to pay the accounts off in full.  Paying off the balance in full may be limited to the minimum payment amount or include additional funds towards the total balance due.  Consumers who can only afford to make their minimum payment amount will take significantly longer to resolve their debts as a large portion of their payment is attributed to the interest and fees determined by the creditor.  Consumers who cannot afford to make their monthly payments to their creditor should review the remaining debt alternatives.

Debt Dismissal

Debt dismissal if done properly, can mean that you won’t have to pay any of the debt back. A debt can be dismissed with or without prejudice. To simplify, prejudice means that the debt collector has the ability to sue you again. With prejudice means the case is completely over and you can’t be sued again. Dismissal can occur if debts cannot be verified, debt collectors are harassing the debtor, or other laws have been broken while attempting to collect the debt.

Debt Consolidation

Consumers who are looking to make one monthly payment towards their debt often turn to debt consolidation.  Debt consolidation requires obtaining additional credit and using that credit to payoff multiple creditors.  This can be done as a loan, line of credit or credit card balance transfer.  Consumers who have assets often turn their unsecured debt into secured debt by obtaining an Equity Loan, Line of Credit or Mortgage Refinance.  Debt consolidation does not reduce the amount of debt owed, but may decrease the amount of payments by reducing the interest rate and fees.

Debt Management

Debt management is another debt relief option that requires one monthly payment.  .  Debt management allows consumers to receive assistance in paying off their debts by determining alternate payment arrangements.  By establishing relationships with creditors, a debt management company works within the creditors’ repayment guidelines and makes re-payment adjustments for consumers.  These guidelines may include an interest or fee reduction to allow for decreased monthly installments.   A debt management company can be a for-profit or non-profit company, but both receive incentives from creditors for submitting payments on behalf of consumers.  Debt management does not reduce the amount of debt owed, but may decrease the payments by reducing the interest rate and fees.

Debt Settlement

Debt settlement requires one monthly payment from the consumer.  This payment is not made to their creditors, but is set aside as savings to be used to negotiate settlements with their creditors.  The debt settlement process requires that a consumer allow their accounts to progress through the collections process and once sufficient savings have been made, a negotiator contact their creditors to facilitate settlement for less than the balance owed.

Consumer Proposal

A Consumer Proposal is a legally binding agreement between a consumer and their creditors facilitated by a trustee that re-negotiates the repayment terms on unsecured credit accounts.  A trustee creates a proposal on the consumer’s behalf and presents it to the creditors.  The creditors may then approve or counter offer.  The consumer must adhere to the counter proposal or file bankruptcy.


Bankruptcy is a last resort for consumers who cannot afford to make payments to their creditors.  It requires that the consumer legally surrender their assets in exchange for the release of their unsecured debts.  In addition, the consumer must surrender any surplus income throughout the period of bankruptcy to their trustee.