The IAPDA Consumer Debt Relief Options Calculator
The following online tool is provided in an effort to give you an overview of the different debt relief options available. The information and figures are for illustrative purposes only. To implement one of the debt relief options available, you are advised to contact an active debt relief company with IAPDA Certified Debt Specialist consultants that serves your geographic area.
There are 4 Main Debt Relief Options that are viewed as alternatives to declaring personal bankruptcy, all 4 options are included in the calculations below for you to compare.
Calculator Instructions: Enter the amount of your total debt and the number of credit accounts. Then move your mouse to another cell in the calculator and the debt calculator will calculate how much your monthly payment would be and how many payments it will take to get you out of debt with each debt relief option. The calculator will also tell you average interest rates, total interest you will pay and the total cost of each option.
Use our Amazing Debt Relief Options Calculator
Note: Values used by our calculator are conservative averages for each debt relief option compared.
Your Total Amount of Unsecured Debt
Number of Accounts
Debt Settlement

Based on your debt a typical
will look like this >

# of Monthly Payments
Debt Settlement Interest Rate
Total Interest Paid
Total Cost
avg. settlement = 55% + fee of 20% of enrolled debt:
Your Monthly Payment

Debt Settlement is an aggressive and highly effective approach to consumer debt relief.

Debt settlement, also known as debt negotiation, debt reduction, or debt resolution, is the process of working to resolve debts for less than what you owe.  Typically, a debt settlement firm works to lower principal balances and to resolve debts so that the consumer can achieve financial freedom.  A debt settlement firm does not make monthly payments to creditors, but rather negotiates directly with the consumer's creditors while the consumer accumulates funds for the settlement through a monthly program payment. Debt settlement firms charge consumers a fee for their services, and this fee is only charged AFTER the client has had a successful resolution and received results.

Debt settlement is optimal for individuals or families who are in financial hardship or struggling with large debt burdens, and those who are looking for an alternative to bankrupcty.

Debt Settlement Pros

Along with the potential of reducing total principal owed, debt settlement programs provide one low monthly payment. This monthly payment is used to accumulate funds for the settlements, and is typically significantly less than minimum account payments and the monthly payment required by a credit counseling firm or debt consolidation loan. Debt settlement companies only charge fees associated with debts that they actually resolve.

Debt Settlement Cons

Debt settlement can have a negative impact on credit scores, because consumers do not make payments to creditors while they are accumulating settlement funds; also, creditors or collectors are likely to contact consumers during the settlement period. Consumers should expect help with managing collection calls from a good debt settlement company, fees and interest will accumulate during the settlement period, and should be taken into account when calculating savings, creditors can take legal action against consumers for unpaid accounts during the settlement period. All these negatives can be effectively managed with a good debt settlement plan.

Who Debt Settlement is Best For

Debt settlement is best suited for individuals who are struggling with very serious debt, who cannot make required minimum payments, and who would otherwise be considering bankruptcy or credit counseling.  For consumers seeking a low monthly program payment and who want to resolve debts relatively quickly, debt settlement may be the best alternative.

Debt Consolidation Loan
Based on your debt a typical

will look like this >
# of Monthly Payments
Average Loan Interest Rate Total Interest Paid Total Cost: Your Monthly Payment

Debt Consolidation Loans

This option may work financially if you have at least an above average or good credit rating and considerable equity in your home. If you have a very large debt balance and have been late on just one monthly payment, it is likely that your credit may be impaired. Also, with this option, you do not reduce or settle your debt to a lower amount than the original balance; you are only transforming it from unsecured debt to secured debt. While a debt consolidation loan coupled with a debt settlement program provides a very powerful solution, remember that debt consolidation alone does not reduce or settle your debt; it only shifts your debt from one place to another.

Consumer Credit Counseling
Based on your debt a typical

will look like this >
# of Monthly Payments
Average Program Interest Rate Total Interest Paid Total Cost: Your Monthly Payment

Consumer Credit Counseling

A Consumer credit counseling program is a method of debt relief for those who are unable to make minimum payments and undergoing financial difficulties. However, CCC programs could take up to 6 years or longer to complete and your debt is not reduced when compared to a debt settlement program. You may still have to pay back 100% of the debt you owe plus interest. In addition, if you miss just one monthly payment, you could be dropped from the program altogether. Consumer Credit Counseling Services, on average, have very high rates of client cancellation, which does not bode well for their delivery of a successful debt management program. With that being said, a CCC program may be a viable option for those with under $10,000 in unsecured debt, are able to afford higher monthly payment obligations, and are well disciplined to remain in the program.

Making the Minimum Payments
Based on your debt

will look like this >
# of Monthly Payments
Average Account Interest Rate Total Interest Paid Total Cost: Your Monthly Payment

Continue to Make the Minimum Payments

  • You could pay almost 50% of your original balance to your creditor in interest costs alone over the first 36 months. Your principal balance may barely be touched
  • If your credit card interest rate is 20% or higher, it may be almost impossible to pay off your debt by making the minimum payments
  • With a high credit card interest rate, it would most likely take you over 20 years to become debt free - and that's if your balances don’t increase
  • Until you pay off high balance debts, your ability to be extended credit becomes substantially more difficult.

If you have already stopped making payments to your credit cards or other creditors, you are negatively affecting your credit rating without reducing, settling or managing your debt successfully.

The bottom line...

Based on Your Debt...

By choosing a

1. Your monthly payment is the lowest of all 4 options.
2. You will complete the program at least 24 months sooner than with the other compared options.
Compare >

Compared with a 60 month Debt Consolidation Loan you will save
Compared with a 60 month Consumer Credit Counseling Program you will save

Compared with making only the minimum payments to your creditors you will save

every month and be out of debt in 36 months!

every month and be out of debt 24 months sooner!

every month and be out of debt 24 months sooner!


While bankruptcy is a legitimate route to get out of debt, it can negatively affect your credit for as long as 10 years and can be a very unpleasant experience emotionally.

You shouldn’t consider bankruptcy as a simple “quick fix” to all of your financial problems, but rather as one of the many available solutions you may have given your individual situation.

Remember, bankruptcy is a last-ditch solution, and it's not a do-it-yourself proposition; you'll want to hire an attorney with expertise in bankruptcy to help you make important decisions that will affect the outcome.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 makes declaring bankruptcy more difficult and requires increased paperwork, more stringent limitations, and financial counseling from an approved nonprofit credit counseling service.

Chapter 7 Bankruptcy

With a Chapter 7 bankruptcy you can wipe out common, unsecured debt if you meet the standards established in 2005 and commonly referred to as a "Means Test". A Chapter 7 bankruptcy is commonly referred to as a "Straight Bankruptcy". A Chapter 7 bankruptcy will eliminate unsecured debts including credit cards, personal loans, medical bills and dental bills. Early in the filing process you will be asked to provide a list of all creditors, account balances and related information. When you file bankruptcy you will automatically be protected against collections efforts and lawsuits. At this point you should stop making any payments on our debts.

A Chapter 7 bankruptcy will not eliminate secured debts including car loans and mortgages. If you want to keep your this property you must continue to make those payments. You may be asked to sign a "reaffirmation of debt" which is a promise to pay however this is completely optional. A Chapter 7 will also not eliminate debts such as student loans, past due taxes, child support or alimony.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a consumer bankruptcy option that essentially consolidates all of your debts into one large debt, and allows you to make a single monthly payment to retire the debt. This type of bankruptcy is commonly referred to as a "Court Ordered Debt Consolidation." A Chapter 13 bankruptcy filing will making it easier to manage your debt situation by developing a repayment plan that is determined based on your income, debt amount and living expenses.

Immediate Protection

As with some other forms of bankruptcy, Chapter 13 will halt foreclosure, vehicle repossessions, collections efforts and wage garnishment. Chapter 13, unlike Chapter 7 bankruptcy, can help you to address student loans, tax debts and similar debts. Chapter 13 bankruptcy is a relatively simple process which can give you immediate protection from creditors and provide a manageable situation to get you back onto a stable financial situation.

Repayment Plan

The bankruptcy process involves several steps which will include at least one in-person appearance in Federal bankruptcy court. This appearance is not in a traditional courtroom setting and is more of a formal meeting than a courtroom situation. The Court will appoint a Trustee , who is an attorney, to handle your case. In this meeting your Trustee will review the facts of your case and confirm that the submitted repayment plan is workable. From there your case will move forward (on a different day) for confirmation by a bankruptcy judge. Upon confirmation of your repayment plan you will begin making payments to the Trustee or possibly have the payment automatically deducted from your paycheck

A Chapter 13 repayment plan will typically last between three and five years. You always have the option, without penalty, to accelerate payments and retire your debts sooner than defined in the Plan.

Cost: Expect to pay between $1,700 and $3,100 for bankruptcy. The cost will depend on the type of bankruptcy you file and what part of the country you live in.

While it may provide financial relief, you should consider other alternatives to filing bankruptcy before making this tough decision.

If you have questions about bankruptcy or are considering it as an option, we advise you to speak directly to an experienced bankruptcy attorney licensed in your state.