Learn how debt settlement works
What settling credit card, medical and collections debt involves, from costs to credit.
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Quizzes and calendars on this site are provided and operated by third-party companies. We may be paid by those companies. Full disclosures
How it works
A simple way to see what may be available to you.
Answer a few questions
Share a little about what you owe in a short quiz. It runs on a debt relief company's system, not ours.
Learn your options
A company that serves your state may contact you to explain programs that may fit your situation.
Decide what fits you
Ask about fees and timelines, and read the agreement before you sign anything.
Which debt is weighing on you?
Every situation is different. These are the kinds of unsecured debt we explain most.
Credit cards
High balances and interest that keep growing. Learn how settlement may work for card debt.
Collections
Accounts sold or sent to a collector. Learn your rights and how settlement may apply.
Medical bills
Unpaid hospital and doctor bills. See how medical debt differs and how settlement may work for it.
How debt settlement works
Settlement is one way some people handle unsecured debt. Here is how it usually works and what to weigh first.
What it is
A debt settlement company negotiates with your creditors to accept less than the full balance on unsecured debts such as credit cards, medical bills and collections.
How a program usually works
You set money aside each month in a dedicated account. When enough has built up, the company tries to reach a settlement with one creditor at a time.
What it costs
Companies may not charge a fee until a debt has been settled. Fees vary by company and state, so ask how they are worked out before you enroll.
What to watch for
Your credit can suffer, creditors may add fees and interest or sue, not every creditor agrees to settle, and forgiven debt may be taxable.
Before you enroll
Debt settlement programs are not right for everyone. They do not cover all types of debt, and creditors are not required to agree to a settlement. Stopping payments to creditors can hurt your credit, lead to late fees, added interest and collection activity, and may result in a lawsuit. Forgiven debt may be taxable. Debt relief companies may not charge a fee until a debt has been settled. Consider all of your options, including nonprofit credit counseling, speaking with your creditors directly, and bankruptcy.
An education site, not a debt company
We teach, we don't settle
DebtHelpTown does not negotiate, settle or pay debts, and we don't give legal, tax or financial advice.
Forms belong to other companies
Each quiz or calendar is run by a third-party debt relief company. What you type goes straight to them, not to us.
How we're paid
Those companies may pay us. Programs aren't offered in every state, and not everyone will qualify.
Common debt settlement questions
Straight answers about how this site works and what to expect.
Is DebtHelpTown a debt relief company?
No. We are an educational website. We don't settle, negotiate or pay debts, and we are not a law firm.
Who runs the quiz?
A third-party debt relief company. Your answers go directly to that company and are handled under its privacy policy and terms.
Is a program available in my state?
It depends on the companies taking part at the time. We don't connect residents of California, Oregon, Kentucky, New Jersey, Connecticut, Vermont, Minnesota or West Virginia.
Can debt settlement affect my credit?
Yes. Stopping payments to creditors can hurt your credit and lead to late fees, added interest, collection activity and possibly a lawsuit.
Is forgiven debt taxable?
It may be. The IRS can treat forgiven debt as income, so it is worth asking a tax professional before you settle.
Do I have to sign up after the quiz?
No. Taking the quiz doesn't require you to enroll in any program. Take your time and read any agreement before you sign.
Ready to learn your options?
Answer a few questions and see what programs may be available where you live.
Answer a few quick questions