Best Debt Consolidation
Companies of 2025

Debt Consolidation

Debt consolidation incorporates various debts into a single new, compacted debt. Rather than owing money to many different creditors and making multiple monthly payments, debt consolidation allows you to combine those debts into one integrated total. Some of the most common ways to consolidate debts are debt consolidation loans, 0% balance transfer credit cards, or personal loans from either a bank or credit union.

Typically, with debt consolidation, your new loan pays off the old debts. For example, if you currently owe $30,000 on three credit cards, you could take out a personal loan for $30,000 and use it to pay off all three balances. You would still owe the same amount, but now you have a single monthly payment, potentially at a lower interest rate. This approach can help you pay off the debt faster and reduce the total cost, especially if your consolidated loan offers favorable terms.

However, debt consolidation is not always the right solution for every situation. If your debt has become unmanageable, you may want to explore more serious forms of debt relief, such as filing for bankruptcy. Depending on your financial situation, you might consider either Chapter 7 bankruptcy, which can wipe out qualifying debts, or Chapter 13 bankruptcy, which restructures your debt into a manageable repayment plan.

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Debt Management

Debt consolidation is often a self-managed process, but that doesn’t mean you have to do it alone. You can also explore a debt management plan (DMP) offered by a credit counseling service.

Credit counseling agencies can help you create a structured payoff plan that consolidates your payments. If you join a DMP, the agency will work with your creditors to potentially reduce your interest rates and waive some fees. You make one monthly payment to the agency, and they distribute it to your creditors on your behalf.

A debt management plan does not reduce the total amount you owe, but it can make repayment more manageable. And in cases where repayment through a DMP or debt consolidation loan still isn’t enough to resolve your financial challenges, you may need to file for bankruptcy instead. A counselor can help you assess whether it’s time to file bankruptcy Chapter 13 (for a court-structured repayment plan) or file bankruptcy Chapter 7 (to discharge unsecured debts such as credit card balances).

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What to Consider When Choosing a Service

The decision between using a professional debt consolidation service, applying for a personal loan, or choosing to file for bankruptcy depends on multiple factors—most importantly your credit score, debt load, income, and long-term goals.

A reputable debt relief company won’t charge you up front to explain your options. The best companies employ certified debt specialists who will evaluate your financial situation and help you understand every available solution, including whether you should consider filing bankruptcy, either under Chapter 7 or Chapter 13.

It’s also essential to read customer reviews and research each company’s reputation, especially if you’re unsure whether you should consolidate or file for bankruptcy. Filing for bankruptcy Chapter 7 is typically reserved for individuals with little or no disposable income, while filing for bankruptcy Chapter 13 might suit people with a steady income who just need more time to repay their debts under court supervision.

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Supported Debt Consolidation Services

We offer a free phone consultation that includes a comprehensive debt evaluation with a certified debt expert. This session helps you understand whether a debt resolution plan, consolidation loan, or more intensive strategy, such as filing bankruptcy Chapter 7 or Chapter 13 bankruptcy, might be appropriate.

Many people turn to these services when their debts are in collections or when they want to eliminate high-interest credit card debt and close those accounts. The companies we reviewed offer a wide range of services, including:

• Credit counseling

• Debt consolidation loans

• Help to file for bankruptcy

• Guidance on bankruptcy options (Chapter 7 and Chapter 13)

These programs are structured to reduce your total financial burden. There are no upfront fees, and the companies we endorse are rated A+ by the Better Business Bureau (BBB). They offer customized debt relief strategies and can assist you whether you want to consolidate, negotiate, or file for bankruptcy.

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When Is Filing for Bankruptcy a Better Option?

While debt consolidation can be helpful for many, it’s not always enough, especially if your debt-to-income ratio is too high or if you’ve already fallen behind on most payments.

In these cases, filing for bankruptcy may provide a clearer path forward:

• Filing for bankruptcy Chapter 7 allows you to discharge unsecured debts such as credit cards, medical bills, and personal loans, often within a few months.

• Filing for bankruptcy Chapter 13 sets up a repayment plan over three to five years, letting you keep important assets like your home or car while catching up on missed payments.

If you’re unsure which route to take, a free debt consultation can help you understand if you’re a candidate for bankruptcy or whether a non-bankruptcy alternative like debt consolidation is a better fit.

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What Is an “APR”?

Annual Percentage Rate (APR) is the yearly cost of borrowing money, expressed as a percentage. It includes not only interest charges but also fees like closing costs, late fees, and administrative costs.

Example APR Scenarios (for illustrative purposes):

• A $20,000 loan at 6.00% APR over 5 years = 60 monthly payments of $387 (Total repayable: $23,199).

• A $100,000 loan at 3.00% APR over 4 years = 48 monthly payments of $2,213 (Total repayable: $106,245).

Understanding APR is essential whether you’re applying for a personal loan, refinancing debt, or considering your options before you file for bankruptcy.