Options Compared

At Debt Point we believe we can point you to the best option if you are struggling with debt.  We want to educate each and every applicant on the alternatives so they can make an intelligent decision for themselves.  If you would like to learn more about Debt Point or any of your options, feel free to contact one of our friendly debt consultants for a free consultation at 888-710-3328.


There are typically 4 ways to go about dealing your debt: Credit Card Monthly Payment, Credit Counseling, Debt Consolidation and Bankruptcy.


Options At A Glance


Credit Counseling Debt Consolidation Minimum Payments Bankruptcy
  • Designed to pay back 100% of your debt plus interest at a reduced rate.
  • Depending on your current interest rates, payments could be somewhat higher or lower than your current payments.
  • ”Non Profit Credit” Counselors collect "Fair Share" from creditors in addition to the fees they charge you. Some believe this creates a conflict of interest.
  • Credit Counseling programs plans are usually structured for 5-7 years. .
  • Some Credit Counselors may claim their programs do not affect your "FICO" score but they will. Also lenders will usually see that you are in a hardship plan by viewing your credit report
  • Easy to manage one lower monthly payment and loan interest rates are usually somewhat lower.
  • Debt usually secured by collateral. If payments are not made in the future, the property may be foreclosed or repossessed
  • Given the housing and mortgage crises, many banks have tightened their loan requirements making it very difficult for people to consolidate their debts.
  • Historically, within 2 years of consolidating, most people reload their credit debt to an equal or higher amount.
  • Depending on your debt amount it could take decades to be debt free and depending how much you owe, could pay tens of thousands of dollars just in interest.
  • Must be disciplined to not add additional debt.
  • Failure to make additional payments coupled with increased balances (due to high interest rates) propels most people further into debt.
  • Interest rates rise if you are late making payments thereby increasing your monthly minimum payments; for many this exceeds their budget.
  • Protects some assets; under chapter 7 start-over debt free but more difficult to file since the bankruptcy reform of October 2005.
  • Significant damage to credit as bankruptcy stays on credit report up to 10 years after discharge and is public record up to life.
  • In 2009, 28% of Bankruptcy filers were in chapter 13 - repayment of debt over of a period of time (source: American Bankruptcy Institute).
  • Bankruptcy can affect current and future employment. It may also affect the ability to obtain certain licensing.
  • You should seek legal counsel if you are considering bankruptcy.

Credit Card Monthly Payment

Unfortunately, millions of Americans struggling with their debts barely make their monthly payments.  Sadly, many people struggle for the rest of their lives in debt while their debt is stealing their ability to retire.  If you are facing a financial hardship this is a no win situation especially as credit card companies may raise your interest rates and payments.  If you are only meeting your minimum payments, you are paying mostly interest charges; and paying interest does not pay down your debts.

This means that if you owe $10,000 today and you discontinue using the cards while just making the minimum payments, it could cost you more than $20,000 over the next 10-20 years before you pay off your debt.  If you are struggling with your credit cards while paying 12% interests, for example, missing a payment could result in consequences of 25% or even 30% interest that could cause your minimum payment to double!  If you default and leave the debts unresolved, you could end up with judgments and garnished wages as well as liens against your property, depending on the laws in your state.  Unfortunately, we consult with many people who have waited too long to get help. The programs Debt Point offer may give you an alternative to bankruptcy, avoid new debt and negotiate a fair agreement with creditors.

At Debt Point we find the optimal solution for you, not your creditors.  By working through a plan tailored to your specific situation, you could settle your debts for LESS than what you owe with a plan typically estimated between 24-48 months.

Credit Counseling

The central problem with nonprofit credit counseling organizations is that they are paid in part by the creditors!  With credit counseling programs you end up paying back all of your debt, plus interest at an often reduced rate and their fees.  In the past, many have had their nonprofit status revoked by the IRS while many of their principals still enjoy very high salaries.  In other words, even though the company may say they do not make a profit, those running the company are!  Credit counseling companies do not negotiate your debts down, they come up with a plan to make sure you keep paying your credit card bills and maximize profits for creditors.  They want their consumers to pay as much money as possible to creditors because the more you pay, and the longer you are enrolled in their program, the more the credit counselor makes.  Credit counseling can be a good option for people who can afford a monthly payment that is about the same as making minimum payments or somewhat less if you are currently paying high interest rates.  If you need to decrease your monthly credit card spending significantly, credit counseling may not work for you. 

Additionally, because you are repaying 100% of your debt balance plus interest charges (possibly at a reduced rate) and their fees, it would probably take you 5-7 years to complete credit counseling if you make all of the scheduled payments on time.

Any option that involves not paying your creditors as originally agreed including bankruptcy or debt settlement will have a negative effect to your credit, though in different ways. Some credit counseling companies claim that their program will not affect your FICO score.  This can be misleading because once you enroll in credit counseling; all of the enrolled accounts are closed leaving you no "available credit."  This in turn can lower your credit score if you had available credit on your accounts prior to enrolling them.  Also lenders may view someone in credit counseling as someone at risk of filing bankruptcy.  Call a random mortgage lender or auto finance company, and ask them how they view someone enrolled in credit counseling.

Most credit counseling companies require you to make all of your payments to them and then, they in turn, pay your creditors.  People in credit counseling programs have reported that certain counseling companies did not pay their creditors on time, and some report that their debt did not go down as fast as they were led to believe.  In the past, the FTC sued one of the largest credit counseling firms because they were not actually passing on all the money they received to the credit card companies, they were keeping the entire first payment for themselves!  At one point, the IRS had stopped granting nonprofit status to credit counseling firms in addition to having revoked the status from credit counselors making up the majority of the industry at the time.

If you can afford payments that are about the same, or depending on your current interest rates, possibly somewhat less than your minimum payments you may want to consider credit counseling if you are aware how lenders may view it on your credit report.  If you can afford to pay off your debt on your own, you should do so. However if you complete a credit counseling program, you could be out of debt in 5-7 years versus possibly 10-20 years or more making minimum payments.  If the credit counselor makes all payments on time, you should not receive any harassing phone calls from your creditors and you virtually avoid the possibility of a creditor taking legal action against you.  Also, since you are paying back your debt in full creditors cannot send you a 10/99-c which could create a tax liability if you are not insolvent, meaning your debts are less than your assets.  Creditors may, but often do not send a 10/99-c after a debt is settled for less than the full balance. See FAQ: Will I owe taxes on debt the is settled. 

Programs offered by Debt Point receive no payments from creditors.  Our programs represent the best interest of our clients and not the creditors.  We are here to help you.



Debt Consolidation

A debt consolidation loan is one of the first and most common solutions people think of when they fall into financial difficulties. This is an unfortunate problem because most people who receive a debt consolidation loan find themselves in much deeper financial trouble than they were originally. Why? Because debt consolidation loans transfer debt from one place to another. Although in some cases a lower monthly payment is achieved, a debt consolidation loan will NOT reduce what you owe. You will still pay back 100% of the debt consolidation loan, plus interest. A final sobering fact about debt consolidation is that once you sign up for debt consolidation loans, in almost all cases you have chosen to transfer your unsecured debt to secured debt and therefore have put your personal assets (usually your home) at risk. If at any time you are unable to pay your bills your creditors can come and take your personal property - thus creating a much bigger problem than you had to begin with.

We have yet to find someone who has solved his or her severe debt problem by borrowing more money through debt consolidation. We receive an enormous amount of calls from people genuinely searching for help, yet we are unable to assist them because their debt is secured by property and is unable to be negotiated. Unfortunately, their only option may be to sell those assets if there is any equity, or have those assets repossessed and possibly face further consequences.

Debt Point has years of experience assisting tens of thousands of individuals and families find a new financial start. We believe that debt negotiation combined with financial education is the best solution for many people to permanently resolve the problem and not just put a "band aid over a large wound."


If you have a high debt load and little or no income, bankruptcy may be your only option to resolve your debt.  Bankruptcy leaves a long-lasting scar and comes at a high price - financially, emotionally, and socially.  And if that doesn't outweigh any potential benefit, discharging debt in bankruptcy can be more difficult since the Bankruptcy Abuse and Consumer Protection Act of October 2005.  We have seen that many people are forced into a chapter 13 repayment plan for 3 to 5 years because they did not qualify to discharge their debts by filing a chapter 7.  Consider that the payments for a chapter 13 plan are usually paid by your employer from your paycheck.

The financial impact is severe; a chapter 13 bankruptcy can stay on your credit report for up to 7 years and 10 years for a chapter 7.  Additionally, most people do not realize that bankruptcy can stay in the court's records much longer, which means if you apply for a job, a loan, rent an apartment, or even insurance, your bankruptcy filing could be easily uncovered even when no longer on your credit report.  Many applications ask if you have "ever" filed for bankruptcy and not disclosing this information could lead to very serious legal trouble.

Bankruptcy is not a financial decision that most people are proud of.  The emotional and social impact should not be overlooked when considering bankruptcy as an option.  We believe that most people strive to find an alternative to bankruptcy and it should only be considered as an absolute last resort after discussing with an attorney. Bankruptcy is not an easy or quick fix. It is a very serious decision with potentially very serious consequences.

If you are considering bankruptcy, you should carefully consider your legal representation options.  Debt Point cannot give legal advice.  There are honest bankruptcy attorneys, and ones who are not.  Simply put some attorneys may "downplay" the effects of bankruptcy to earn your business. If you do not meet certain criteria, including earning more than the median income in your area, you may have no choice but to file a chapter 13 repayment plan. Consider that after you have made a decision on legal representation and paid the attorney to begin the bankruptcy process for you, there is no guarantee that the court will approve your bankruptcy plan.

All things considered, the programs Debt Point offers are a better choice for many people who want an alternative to bankruptcy. In these programs you are working to resolve the financial difficulty - by negotiating to settle your debt at a substantial reduction and resolve it once and for all. Although debt negotiation affects your credit profile (as does most any program other than paying your creditors as originally agreed), it is a private program unlike bankruptcy which is public record. Unfortunately for some people bankruptcy is ultimately unavoidable but our programs give those who qualify an opportunity to resolve their debt without suffering the financial, emotional, and social impacts of a bankruptcy.

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Estimates are based on prior results. We do not assume consumer debt, make monthly payments to creditors, provide tax or legal advice or credit repair services. Read and understand all program terms prior to enrollment including potential tax consequences. Failing to make monthly payments to creditors may result in an adverse credit rating impact, increased interest rates and fees added to balance owed and increased collection efforts including potential legal action by creditors. We do not guarantee that your debts will be lowered by a specific amount or that you will be debt free within a specific time. Individual results vary and not all clients successfully complete programs due to individual circumstances and ability to save sufficient funds. Not all creditors may negotiate or provide settlement offers and full program participation is required. "Live Debt Free" refers to our company belief that consumers should live without debt and does not imply any guarantee. Services not available in all states.