Key Takeaways          

• October is Financial Planning Month: a reminder to take charge of your finances, review debt, and set long-term goals.
• Multiple debt relief options exist: including debt management plans, debt consolidation, debt settlement, and bankruptcy; each comes with benefits and risks.
• Nonprofit credit counseling offers safe solutions: organizations like American Consumer Credit Counseling (ACCC) provide personalized counseling and debt management plans that reduce interest rates without new loans.
• Choosing the right path matters: the best option depends on your income, debt level, and long-term financial goals.
• Planning today prevents stress tomorrow: taking steps toward financial wellness in October can set you up for lasting stability and peace of mind.

As the autumn air ushers in the month of October, it also brings with it an important opportunity for financial introspection and planning. October is Financial Planning Month, a time to evaluate and refine your financial strategies. One key aspect of financial health that often requires attention is debt management. If you’re feeling overwhelmed by debt, know that you’re not alone. Finding the right debt relief option is what makes or breaks your financial future.

What are the Different Debt Relief Options?

Depending on the type of debt you have and your overall financial situation, there are several approaches to finding relief. Make sure you take the time to learn about all the options available to you.  The most common options include:

1. Debt Management Plans
2. Debt Consolidation loans
3. Debt Settlement Plans
4. Or Bankruptcy.

The right choice depends on your financial goals, income, and type of debt. However, options like debt settlement and consolidation loans carry higher risks compared to safer alternatives like Debt Management Plans through nonprofit credit counseling.

Did you know? According to a 2025 NerdWallet Survey, 35% of Americans have the financial goal of paying down or paying off debt.

Why ACCC Recommends Debt Management Plans

At American Consumer Credit Counseling (ACCC), we believe debt relief should set you up for long-term success, not create more risks. That’s why our certified nonprofit counselors often recommend Debt Management Plans (DMPs) as a safer alternative to settlement or high-interest consolidation loans.

With an ACCC DMP, you can:

• Lower your interest rates and monthly payments
• Consolidate multiple bills into one simple payment
• Repay your full debt without taking out a new loan
• Preserve your credit while building healthier financial habits
• Our nonprofit mission means we put your financial well-being first, helping you find a realistic path to becoming debt-free.

First Step to Determining the Right Debt Relief Option for You

The first step to determining the debt relief option right for you, is to understand the nature of your debt. It could be anything from

• Credit card balances
• Student loans
• Medical bills
• Or mortgages

Each type of debt can impact your financial situation differently. Taking stock of your debts, including interest rates and repayment terms, is the first step in determining the best path forward.

Debt Relief Options Explained

1. Debt Management Plans

A Debt Management Plan (DMP) offered through non-profit credit counseling agencies like ACCC, a DMP consolidates your credit card payments into one monthly payment. The agency negotiates with your creditors to reduce interest rates or waive fees, making it easier for you to pay off your debt over time. While on a DMP, you may be required to close your credit card accounts, so consider the implications on your credit score and future credit needs. However, this option avoids new loans and actually protects your credit over time. 

“A debt management works best if you are someone who has overwhelming credit card debt and your debt-to-income ratio is 43% or more. Consider these pros and cons of debt management plans before making the decision to enroll.” –Sean Pyles. NerdWallet. “What is a Debt Management Plan?“

2. Debt Consolidation Loans

Another debt relief option for managing multiple debts is debt consolidation loans. This involves combining several debts into a single loan, usually with a lower interest rate. By consolidating your debts, you simplify your monthly payments and potentially reduce the overall interest you pay over time. Debt consolidation loans can be secured or unsecured, and it’s important to compare offers from different lenders to find the best terms for your situation. While it simplifies payments, it can come with high interest rates or fees, and qualifying may require good credit.

3. Debt Settlement

Debt settlement, on the other hand, is a more aggressive approach, typically pursued by individuals who are unable to repay their debts in full. This process involves negotiating with creditors to settle your debt for less than the full amount owed. While this can potentially reduce your debt burden, it’s important to be aware of the harsher drawbacks, including a negative impact on your credit score and possible tax implications. It’s advisable to work with a reputable debt settlement company or attorney to navigate this process, as many for-profit companies that handle debt settlement do not have the consumer’s interests first.

4. Bankruptcy

In layman’s terms, bankruptcy is a legal process that can eliminate or restructure debt. Bankruptcy may provide a fresh start, but it has long-lasting consequences on your credit and should typically be considered as a last resort. There are different types of bankruptcy, such as Chapter 7 and Chapter 13, each with its own eligibility requirements and consequences. Chapter 7 bankruptcy involves liquidating assets to repay creditors, while Chapter 13 allows you to restructure your debt and create a repayment plan. Please consult with a professional before committing to anything! There are millions of people out there who are simply unaware of the other options that may fit their financial situation better than bankruptcy.

“Since your bankruptcy filing will remain on your credit record for up to ten years, it may affect your future finances. A bankruptcy is a troublesome item in your credit record, but often debtors who file already have a troublesome history.” American Bar Association. “Pros and Cons of Filing for Bankruptcy.”

Which Debt Relief Option is Right for Me?

With so many options available from debt management, consolidation loans, to settlement and bankruptcy, it can be overwhelming to know where to start. That’s why beginning with nonprofit consumer credit counseling is often the smartest first step.

At ACCC, our certified counselors review your full financial picture, explain each debt relief option, and recommend the path that best fits your goals and circumstances. For many consumers, a Debt Management Plan offers a safe and effective way to pay down debt faster, lower interest rates, and avoid the risks of settlement or new loans.

About American Consumer Credit Counseling

Speaking of professional guidance, consider reaching out to American Consumer Credit Counseling (ACCC). A non-profit credit counseling agency, ACCC, has been helping people become debt-free since 1991. ACCC provides services like free credit counseling, personalized debt management plans, reverse mortgage counseling, and even bankruptcy counseling. ACCC also provides financial literacy resources in the form of financial education articles.

Dealing with Debt Needs a Plan – Start Now

While dealing with debt can be daunting, Financial Planning Month serves as a reminder that there is hope for a more secure financial future. By taking proactive steps and exploring your options, you can reduce your debt burden and work towards achieving your financial goals.

With perseverance and the right support, you can transform October into a month of empowerment and positive change. As you embark on this journey, remember that financial health is not just about eliminating debt, but also about fostering habits that promote sustainable financial well-being. Building an emergency fund, creating a budget, and investing in your future are all essential components of a robust financial plan.

Building a Supportive Community

It’s important to acknowledge that the road to financial recovery is often smoother with a supportive community. Whether it’s joining a financial literacy group, participating in online forums, or simply sharing your journey with friends and family, having a network of support can make a significant difference. Encouragement and shared experiences can provide motivation and practical advice, helping you stay committed to your goals.

In Conclusion:

As October progresses, take advantage of Financial Planning Month to assess your financial landscape. By understanding and exploring debt relief options such as debt consolidation, management, settlement, and bankruptcy, you can take decisive steps toward financial freedom. Remember, the journey to financial wellness is not one-size-fits-all, and what works for one person may not be suitable for another. Stay informed, seek guidance when needed, and remain hopeful. Each step you take towards managing your debt is a step towards a brighter financial future.

Frequently Asked Questions

Q1: What are the main debt relief options available?
A: The most common options include Debt Management Plans (DMPs), debt consolidation loans, debt settlement, and bankruptcy. Each has pros and cons, so the right choice depends on your financial situation.

Q2: How does a Debt Management Plan work, and why is it safer?
A: A DMP, offered by nonprofit agencies like ACCC, consolidates unsecured debts into one monthly payment while lowering interest rates. Unlike debt settlement or consolidation loans, it doesn’t require taking on new debt or risking damage to your credit.

Q3: What is the difference between debt consolidation and debt settlement?
A: Debt consolidation combines multiple debts into one loan, ideally with better terms. Debt settlement involves negotiating with creditors to pay less than you owe. Consolidation depends on good credit and may carry fees, while settlement can seriously harm your credit and may trigger tax consequences.

Q4: When should I consider bankruptcy?
A: Bankruptcy is usually a last resort if other debt relief options aren’t feasible. It can wipe out or restructure debts, but it has long-term credit impacts. Consulting a nonprofit credit counselor before taking this step is recommended.

Q5: How can ACCC help me choose the right option?
A: ACCC provides free credit counseling, personalized action plans, and DMPs designed to lower interest rates and simplify payments. Speaking with a certified counselor is a safe starting point to understand your options and create a long-term plan for financial stability.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.