Report by Analyzes Consumer Debt Relief Options

Review the pros and cons of the most widely available debt relief solutions

San Mateo, Calif. — May 10, 2010 —, the leading resource for free, personalized and expert money advice, today released a new report titled, "Debt Relief Options: Which is Right for You?" This groundbreaking report exposes the truth behind and analyzes the pros and cons of the confusing array of debt relief options available to consumers.

Just as high unemployment, deflated home values, rising gas prices, and the economic recession have driven up consumer debt levels, so too have tightening credit markets and a strict regulatory environment limited many forms of debt relief for Americans. Most consumers today must turn to either credit counseling or debt settlement as the only viable ways to resolve high debt levels.

"With fewer options available to them, consumers in debt often find themselves alone and struggling," said Brad Stroh, founder and CEO of "For those who decide to pursue a debt relief service, the process can often be confusing and hard to navigate. We have crafted this guide as a primer to help consumers ask the right questions and uncover the truths about credit counseling and debt settlement."

Consumer Options

Traditional debt relief options include debt consolidation, credit counseling, debt settlement, and bankruptcy. However, a difficult credit market has largely eliminated debt consolidation loan options, while bankruptcy reform laws have reduced that program’s viability for many individuals.

With the debt settlement industry under fire from regulators over false marketing claims and credit counseling companies drawing scrutiny for their relationships with creditors, consumers can often be confused about the remaining legitimate companies and services. The report finds that despite these dangers, both services offer consumers the ability to save money on their debt. In an effort to help consumers find the right option for their unique needs, the report outlines the pros and cons of each service.

Credit Counseling Services

Originally devised by creditors to ensure repayment from consumers behind on their monthly payments, credit counseling employs standard reductions in penalties and interest charges on debt, but leaves the actual principal balance intact.


  • Reduced time to payment (5 years is typically the maximum)
  • Lowered monthly payments
  • No or minimal impact to credit score
  • Small monthly fees (usually $10-15 per line of debt)


  • Small reduction in overall amount owed
  • Monthly debt payments typically remain large because of short program duration
  • Most lenders won’t extend new loans to consumers during repayment period
  • Fees can mount over time (10 lines of debt over 5 years could total up to $6,000)

Debt Settlement Services

Debt settlement is a more aggressive program in which consumers do not make payments to creditors while a settlement is negotiated on their behalf.


  • Savings can often be large (up to 50% of what is owed in many cases)
  • Repayment period is often short (3 to 4 years is typical)
  • Fees are substantiated by significant savings for graduates of these programs


  • An individual’s credit score will drop as a result of not making monthly payments
  • Late charges and interest accumulated during the program can raise total debt
  • Consumers can be subjected to aggressive debt collection efforts during program
  • Creditors can sue program participants for unpaid debt


The report found that both credit counseling and debt settlement programs can lead to important savings for consumers in debt. However, each has its own unique set of disadvantages to consider. The two most important factors to evaluate when researching these services are the impact to an individual’s credit score and the amount paid monthly.

"Unfortunately, there is no silver bullet — both options will still require consumers to be disciplined and pay down their debt," continued Mr. Stroh. "However, with careful research, consumers can evaluate each option and find the one that best improves their unique situation."

Additional Debt Resources

In addition to its new Debt Relief Report, also offers short video guides and advice on the subject of debt relief. They can be found in a video on debt consolidation and debt settlement.

Consumers can also take advantage of the company’s Ask Bill service to obtain personalized advice to their debt or money questions. This free service allows an individual to ask a direct question of a expert editor and receive a custom response.

For more information on debt relief, please visit the Debt Relief Resource Center.