Colorado debt relief: 3 ways to become debt-free

Carrying debt has become commonplace for many American households and the resulting financial stress can feel suffocating.

If you’re a Colorado resident struggling under the burden of high-interest debt, know that you have options.

This guide explores:

• The leading debt relief options available in Colorado
• Key factors to weigh when choosing the right strategy
• Top debt relief companies operating in the state
• Government and nonprofit resources that provide additional assistance

You'll also learn some DIY strategies that can help you become debt-free as quickly and affordably as possible.

Colorado debt relief options

Colorado consumers have access to all the major national debt relief programs. Finding the right approach involves weighing your specific circumstances and financial objectives.

Here are the most common options to consider:

Debt management plans

Nonprofit credit counseling agencies can set up debt management plans (DMPs) that consolidate your unsecured debts into a single monthly payment.

Your counselor will negotiate with creditors to waive fees, reduce interest rates, and make repayment terms more manageable.

A successful DMP helps you pay off debts faster without damaging your credit score. Be sure to use a National Financial Credit Counseling (NFCC) accredited agency for reliable service.

Average program fees range from $25-$50 per month.

Debt consolidation loans

Banks and online lenders offer debt consolidation loans, allowing you to pay off multiple credit cards and loans with one new loan at a lower interest rate. This simplifies repayment with a single monthly bill.

Consolidating balances with a personal loan won’t impact your credit score the way credit counseling can. And you can borrow larger amounts than with a credit card balance transfer.

But keep in mind that consolidation works best for borrowers with good credit scores. You’ll typically need a rating above 620 to qualify. The higher your score, the better the rate and terms you can get.

Debt settlement

Debt settlement companies negotiate with your creditors to settle account balances for less than the full amount owed—typically 40-60%.

This requires placing monthly payments into a dedicated account managed by the settlement provider until enough funds accumulate to make lump-sum settlement offers.

Settlements result in charge-offs on credit reports, so this option only makes sense if you can’t keep up with minimum payments.

Be aware that saved settlement funds get taxed as income. Still, it can resolve debts in as little as two to four years.

Bankruptcy

Filing Chapter 7 or Chapter 13 bankruptcy stops collections activity and can eliminate or discharge qualifying unsecured debts.

In order to file for bankruptcy, you must receive credit counseling first, and bankruptcy stays on your credit reports for seven to 10 years, hampering loan approvals and tanking your credit score.

Weigh this carefully as a debt resolution method of last resort if no progress can be made through other means.

Also, know that student loans and taxes cannot be discharged through bankruptcy.

Reliable Colorado debt relief companies

Always research any debt relief company thoroughly before enrolling in services. Look for quality indicators like accreditation, longevity, positive reputation, transparent fees, and satisfied customer reviews.

Some of the leading debt relief providers operating in Colorado include:

National Debt Relief Colorado—This nationwide debt settlement company has resolved over $12 billion in consumer debt. It earns high marks from independent review sites.

ClearOne Advantage—Focused on debt settlement, ClearOne helps Colorado consumers settle debts for as low as 40 cents on the dollar.

InCharge Debt Solutions—InCharge offers credit counseling and debt management programs with personalized advice and education.

Freedom Debt Relief—As one of the largest debt settlement companies, Freedom Debt Relief settles billions in debt annually.

GreenPath—A nationwide nonprofit financial counseling and debt management assistance provider.

Pacific Debt—Pacific Debt provides full-service debt settlement programs with free consultations.

Consolidated Credit—Consolidated Credit Counseling offers DMPs, financial education, and tools to regain control of debt.

Before choosing any company, verify proper state registration to operate in Colorado, review complaint records, and ensure fair, transparent fees.

Government and nonprofit resources

Colorado residents can also turn to HUD-approved housing counselors who provide budgeting assistance and mortgage relief options at little or no cost.

The Colorado Attorney General’s office offers guidance for dealing with debt collectors.

Nonprofit credit counseling agencies like Credit Advisors Foundation and Novadebt provide debt management plans, counseling, and financial literacy courses without upfront fees.

Military members can receive free help from Armed Forces Legal Assistance offices. And the Consumer Financial Protection Bureau assists with disputes involving financial companies.

DIY tips to become debt-free faster

The right debt relief solution combined with smart financial habits offers the fastest path to shedding burdensome debt while protecting your credit and assets.

Here are a few helpful strategies:

• Reduce expenses and stick to a workable budget
• Pay at least the minimum on all accounts to avoid late fees and defaults – but try to pay more if you can
• Pay down the highest interest balances first using the debt avalanche method
• Avoid taking on new debt that prolongs the proccess
• Monitor credit reports and dispute any errors
• Rebuild credit with secured cards and timely payments
• Seek side income sources to supplement debt repayment funds

The bottom line

If your mounting debt feels crushing, know you have options.

Every Colorado resident can find reputable debt management, debt settlement, credit counseling, and consolidation services that best fit their needs and budget.

But before taking the plunge, do thorough due diligence and make the most out of nonprofit resources.

Oh, and don’t overlook the power of sound financial habits.

While there are providers available to assist, remember that ultimately no one will take better care of you than you.