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Debt Help That Actually Works

Debt is tricky. It starts out innocent . . . just a few swipes here, and a few payments there—nothing you can’t handle, right? But one day, you realize it’s gotten a little out of control and you’re drowning in debt. The payments are getting harder and harder to make. And your paycheck? Psh, that thing doesn’t go quite as far as it used to.  

If that’s you, you’re not alone. And if you’re looking for ways to get help with that debt of yours, you’ve come to the right place.

Why Getting Debt Help Is a Good Idea

66% of Americans say they have consumer debt—and the average total per person is a whopping $34,055.1 Oof. It’s time for some debt help, don’t you think?

But here’s the thing: True debt help is not instant or easy. And just like any get-rich-quick scheme, you should be suspicious of anyone who promises to solve your money problems with a snap of their fingers. (Debt probably didn’t become your way of life overnight, so it’s going to take some time to get back on your feet.)

Companies that offer debt management or debt reduction services almost never help you actually get out of debt because they don’t solve the one thing keeping you in debt—your spending habits.

Here’s the deal: Personal finance is 80% behavior and only 20% head knowledge. If you truly want to get out of debt and stay out of debt, you have to treat the root of your money issues, not just the symptoms. Even though your choices landed you in a tough spot, you have the ability to fight, kick and claw your way out of debt. You just need a game plan, and it starts with knowing what types of debt relief services will actually help you with your debt.

Debt Relief Services to Watch Out For

We said it before and we’ll say it again: Not all debt help is helpful. Yep—there are companies out there who make money off your desperation. Gross, right?

That’s why it’s so important to know what kind of debt help is actually helpful, which to steer clear of, and how you can demolish debt yourself. (It’s possible.)

1. Debt Consolidation 

Debt consolidation is a type of loan that rolls several unsecured debts into one single bill, usually to get a lower interest rate. The intent is to help you slash mounds of debt. But in reality, you end up staying in debt longer because the term of your loan is extended. The longer it takes you to pay off your loan, the more money you pay. That’s why we call it debt CON-solidation (get it?).

2. Debt Settlement

Debt settlement means you hire a company to negotiate a lump-sum payment with your creditors for less than what you owe. Debt settlement companies also charge a fee for their “service.” Most of the time, settlement fees cost between $1,500 to $3,500, which is way more than you would pay if you cut out the middleman and settled the debts yourself.

3. Student Loan Consolidation

We all know student loans are the worst. So, it’s no wonder that most graduates going into their early career are feeling the heavy weight of those payments, especially if they’ve got multiple loans. When you’re eating ramen noodles for the fifth night in a row because you’ve got to pay your bill, any sort of student loan relief seems tempting—including consolidation.

For the record, student loan consolidation is the only kind of consolidation we recommend. It will roll all your federal student loan payments into one, and it can also help you trade in any variable interest rates for a fixed rate.

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Pay off debt fast and save more money with Financial Peace University.

But consolidating won’t get you a lower interest rate overall, so you’re not really saving any money. And it tends to extend your loan—which means you’ll end up paying more in interest if you just stick to the minimum payment. It’s more a question of what will motivate you to pay off your loans faster.

So, even if consolidation gives you a little extra breathing room, don’t take your foot off the gas!

4. Credit Counseling

A credit counselor is someone who “helps” you come up with a debt management plan. They essentially become the middleman between you and your creditors, paying your bills for you, negotiating smaller rates on your loans, and combining your bills into one lump payment. Sounds nice right? Not so fast—credit counseling only works on certain types of loans. And you’ll want to watch out for those hidden “maintenance fees” too. Oh and P.S. . . . while the name implies counseling, the only one getting counseled is your debt!

5. Credit Repair and Debt Elimination Scams

In a world that revolves around the almighty FICO, it’s easy to come across companies that are ready to “fix” your credit report—for a fee. But the truth is, most of these repair companies are scams. They offer to take the negative information from your report (even if it’s accurate).2 Psst. That’s illegal.

And debt elimination scams are similar. They offer to eliminate or drastically lower your debt for a large up-front cost. But all you’re paying for is falsified loan documents that aren’t tricking anybody. Yikes.

6. Bankruptcy

Sometimes your situation feels so desperate that bankruptcy seems like the answer. But it is not your only option. Bankruptcy is a gut-wrenching, life-changing event that causes lifelong damage. It also doesn’t guarantee that all your debts will be canceled. Bankruptcy falls into the same category as divorce—sometimes it’s necessary, but as a general rule, you should do everything in your power to avoid it.

7. Balance Transfers

Think a simple balance transfer from one credit card to another will help? Think again! It may seem like you did something to help your debt when you transfer it to a credit card with lower interest. But all it really did was trick you into thinking you’re better off than you were before. The only way to really help your debt is to get rid of it!

8. Personal Loans

Borrowing money to pay off debt is like trying to dig yourself out of a hole. A personal loan won’t solve your problem because it’s just moving your debt from one place to another. Even cash advance apps like the Dave app won't help you break the paycheck to paycheck cycle.

It’s time to stop thinking of debt as the solution and end the cycle of borrowing money for good. And if you’re thinking about borrowing money from family, don’t. The borrower is slave to the lender (see Proverbs 22:7), and you change the dynamic of a relationship when a loved one loans you money. Trust us on this—it’s not worth the trouble.  

Debt Help That Really Works

Don’t let debt back you into a corner. You can be debt-free! It’s time to defend yourself from the phonies selling false hope and learn how to knock out debt once and for all. Here’s a rule of thumb: If it seems too good to be true, it usually is. There’s no easy button when it comes to dealing with debt.

Your best bet is hard work, strong bootstraps (so you can pull yourself up), and the right person or plan to come alongside you as you walk toward freedom from debt once and for all.

If you’re fed up with the debt cycle and other debt relief services that bring nothing but stress (and even more debt), it’s time for a change. But in order to get a different outcome, you’ve got to do something you’ve never done before.

Here are three ways to start changing your money behaviors that will completely change your life (if you stick with it):

Use the debt snowball method.

The debt snowball method is a plan that’s proven to help you defeat debt—for good.

By listing your debts smallest to largest (regardless of interest rate) and attacking the smallest with a vengeance while making minimum payments on the rest, you will start to knock out more debt than you ever thought possible!

The debt snowball is the fastest way to get out of debt because it addresses behavior, not just math. It forces you to be more intentional with your money and gives you small wins that motivate you to keep going.

This method changes lives! And it can change yours too.

Find a good financial coach.

Unlike a counselor—who serves primarily as a mediator—a financial coach gets into the trenches with you. They’ll help you develop a plan to get out of debt and achieve your big money goals . . . all while encouraging you along the way.

Maybe asking for debt help is uncomfortable for you. Maybe your pride is as big as the state of Montana and you can’t imagine showing your bank statements to someone else. We get it. But if you really want to demolish your debt, it’s time to bring in a helpful third party that knows how to help you get out of the hole you’re in. We’re talking about a financial coach.

Sure, it may be awkward at first letting a stranger in on your spending habits. But it’s one of the best decisions you’ll make. Why? Because a financial coach is trained to get you from the deep end of debt to standing on the dry land of stability. Not only that, but they’ll also help you reach your financial goals and get to places you never thought you could go with your money.

Don't Go It Alone: Connect With a Financial Coach

A trained financial coach helps you navigate your money problems and make real money progress.

Get a Complementary Session

Change your life with Financial Peace University.

Think a money course will be boring? Think again. Financial Peace University is the debt help you need that will change your life for good. In nine lessons, you’ll learn how to save for emergencies, dump debt, invest for your future, build wealth, and give like no one else.

Listen, nearly 10 million people have gone through Financial Peace University and come out on the other side . . . winning with money. You're next.

You Have the Power to Get Out of Debt!

Attacking your debt with gazelle intensity will get you on the road to financial peace and allow you to build wealth faster than any debt reduction company ever will. No, it’s not easy. And it’s not quick. But it is worth it!

You are ultimately the only one responsible for your debt. It’s up to you to roll up your sleeves, change your spending habits, make a plan for your money, and take action!

If you’re really serious about learning how to pay off debt fast and save for the future, Financial Peace University will show you how. Get this: The average household pays off $5,300 in the first 90 days on the plan. We aren't joking.

Pulling yourself up by your bootstraps will only get you so far. Start Financial Peace University and learn how to get out of debt (and stay out of debt)—forever.

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Ramsey Solutions

About the author


Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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