Get started
How to qualify for debt settlement
Four things decide whether debt settlement can work for you: how much unsecured debt you have, what kind it is, a real hardship, and where you live. Check them here in two minutes.
Who qualifies for debt settlement?
Debt settlement is built for one situation: you owe more unsecured debt than you can repay, and you are already behind or about to be. The rules below come from how settlement works, not from a sales script.
You need to meet all five to enroll with us.
- You owe at least $10,000 in total unsecured debt.
- Each account you enroll has a balance of at least $500.
- You have a genuine financial hardship that makes the full payments impossible.
- You live in a state where we enroll clients: right now, Florida, Georgia, Texas and California.
- You are a US citizen or permanent resident, or you live abroad and hold a US SSN or ITIN.
Meeting these rules means we can talk. It does not mean settlement is your best option.
Which debts can you enroll?
Only unsecured debt can be settled in our program. That means debt with no house, car or other property tied to it. With no property to take back, creditors are more open to settling.
The debts that usually qualify are credit cards, medical bills, personal loans, store and gas cards, past-due utilities, old apartment leases and judgments. You do not have to enroll every account.
| Usually eligible | Not eligible |
|---|---|
| Credit cards | Student loans |
| Medical bills | Mortgages |
| Personal loans | Car payments |
| Store and gas cards, past-due utilities, old apartment leases and judgments | Other secured loans and income tax debt |
If most of what you owe is a student loan, mortgage, car payment, other secured loan or income tax debt, settlement will not help with that part. The CFPB explains other kinds of debt help (CFPB, opens in a new tab).
How much debt do you need to qualify?
You need at least $10,000 of unsecured debt in total, and at least $500 on each account you enroll. Below those amounts, the fee and the credit damage are hard to justify.
If you owe less, you still have good options. The FTC suggests (FTC, opens in a new tab) calling your creditors first to ask for a payment plan you can manage. You can also talk to a nonprofit credit counselor.
The National Foundation for Credit Counseling (NFCC, opens in a new tab) can connect you with a nonprofit credit counselor. A counselor may set up a debt management plan: you repay the full balance, and your creditors may agree to lower your interest rates or waive some fees.
What counts as a financial hardship?
A hardship is a real reason you cannot keep up with the full payments. Creditors settle because they believe you cannot pay in full. If you can, a loan or a repayment plan usually costs you less.
Common hardships look like this.
- You lost a job, or your hours or income went down.
- Medical bills or an illness changed your budget.
- A divorce or a death in the family changed your costs.
- Your minimum payments now eat most of what is left each month.
You will be asked about your hardship. Tell the truth; the plan only works if it fits your real budget.
Does it matter where you live?
Yes. Debt settlement is regulated state by state, and it is not available everywhere. Right now we enroll clients in Florida, Georgia, Texas and California. The list is set with legal counsel.
If your state is not on it, we will say so and point you to free nonprofit credit counseling. The details are on licensing and disclosures.
We can work with US citizens and permanent residents, and clients abroad who hold a US SSN or ITIN. Ask us on the first call if you are not sure.
Is debt settlement a fit for you? A quick self-check
Answer these honestly. The more you answer yes, the more likely settlement is worth a conversation.
- Do you owe $10,000 or more on cards, medical bills or personal loans?
- Are you behind, or will you be soon, even after cutting your budget?
- Could you save a steady amount into an account in your name each month?
- Can you live with a lower credit score for 24 to 48 months, and the chance of a lawsuit?
- Have you ruled out a loan or a debt management plan you could afford?
If you answered no to the last one, look at the other options first. Our debt settlement guide and the side-by-side comparison show when settlement is the wrong choice.
What happens on the first call?
The first call is free, and nothing is signed on it. A real person, your advisor, walks through where you stand.
- First
Your state
We check that we can enroll clients where you live.
- Next
Your debts
Who you owe, how much, and how far behind you are.
- Then
Your estimate
An illustrative estimate, with the fee shown as its own line.
- Last
Your choice
If settlement is wrong for you, we say so and point you to a better fit.
No pressure to sign
Before you enroll with any company, federal rules require it to tell you how long the program takes, what you must save before each offer, and the risks to your credit. The FTC guide (FTC, opens in a new tab) lists every disclosure. You can call us at 866-659-7966, or start online and see your estimate first.
Things you should know
The downsides, stated plainly.
Read these before you enroll anywhere, including with us. They apply to every debt settlement program.
- Your credit score will drop during the program, and late payments stay on your credit report.
- Creditors may keep collecting while you save, and they can sue. The program does not stop legal action.
- Interest and late fees can keep adding to your balances until each account settles.
- Forgiven debt may be taxable income. A creditor may send you IRS Form 1099-C.
- Fees apply. The fee is a percentage of your enrolled debt, set individually, and charged only after a settlement is reached.
- Not all creditors agree to settle, and not everyone completes the program.
- We do not guarantee any amount, percentage or timeline.
- Debt settlement is not available in all states. We are not a nonprofit or a credit counseling service, and we do not lend money.
- We do not give legal or tax advice. Talk to an attorney or a tax professional about your situation.
Notes on the figures and claims above
- 1Your credit score will drop during the program. Creditors may continue collection activity and can sue. Forgiven debt may be taxable income (IRS Form 1099-C). Fees apply. Not all creditors agree to settle. Most programs run 24 to 48 months.
Can I qualify with bad credit?
Bad credit is common among people who settle debt. Settlement is not a loan, so you are not borrowing against your score. Expect the program to lower it further.
Do I have to be behind on payments?
The test is a genuine hardship that makes the full payments impossible. If you can still keep up, a loan or a debt management plan usually costs less.
Can I enroll just some of my debts?
Yes. You do not have to enroll every creditor. Each enrolled account needs a balance at or above the per-account minimum.
What if I do not qualify?
We tell you on the call and point you to a better fit, such as free nonprofit credit counseling through the National Foundation for Credit Counseling.
Sources
Where the facts on this page come from. Each link opens the original in a new tab.
- 01 CFPB What is a debt relief program and how do I know if I should use one? (opens in a new tab)
- 02 FTC How To Get Out of Debt (opens in a new tab)
- 03 FTC Debt Relief Services and the Telemarketing Sales Rule: A Guide for Business (opens in a new tab)
- 04 NFCC National Foundation for Credit Counseling (opens in a new tab)
Check in two minutes
See if you qualify, and what it could cost.
Four short questions, then your illustrative estimate with the fee in dollars. No phone number until the end.
Four short steps
Your estimate first. Contact details last.
- 1How much you owea close guess is fine
- 2What kinds of debtpick all that apply
- 3Which state you live inchecked before anything else
- 4Your estimate, then a real person if you want one