If your debt interferes with your daily life and ability to meet your financial obligations, you might be considering debt relief.

There are three ways to go about it:

  • Hire a debt relief attorney
  • Use a debt settlement company
  • DIY debt relief

Which do you choose? If you're unsure, this article is for you.

A debt settlement attorney

Debt consolidation lawyers can negotiate with creditors, help file for bankruptcy, represent you in court, and, most important, protect your rights.

They're a suitable solution if you are facing legal consequences and you:

  • Have missed a payment and creditors are trying to sue you
  • Have already been sued and lost, and creditors are deducting money from your paycheck or seizing your property
  • Have a large amount of debt you can't afford to pay and wish to file for bankruptcy
  • Are being unfairly treated by creditors or debt collection agencies
  • Have debts from multiple creditors, and find making negotiations and settlements challenging to navigate

Did you know debt settlement companies are not required to have specialized training or licenses? So they are not to protect you from creditor actions.

Should you need legal protection, it is best to hire an experienced debt relief lawyer. By law, debt settlement lawyers must be licensed to practice in the state where they operate.

A debt settlement company

Say you don’t need a lawyer, but you've hit a wall trying to negotiate a debt settlement on your own or with a debt counselor. A debt settlement company can make your monthly payments more manageable.

Debt settlement companies operate differently from debt consolidation attorneys:

  1. You make monthly payments to the settlement company and those payment accumulate in a designated fund.
  2. Once this fund reaches a specific size, the company engages your creditors and proposes settling your debt for less than the total amount owed.
  3. If your creditors accept the offer, the agreed-upon amount is paid, and your debt is resolved.

However, there's a crucial consideration: In order to accumulate sufficient funds, you will abstain from making payments to your creditors for up to 90 days (or more), which can adversely impact your credit score.

The pros and cons of lawyers vs. debt settlement companies

Some of the critical differences between lawyers and debt settlement companies:


Debt settlement companies offer a structured repayment plan that outlines how to settle your debt over time.

Lawyers provide a broader range of services, including bankruptcy filing, debt negotiation, and legal protection, making their approach more tailored to your needs.


Both lawyers and debt settlement companies charge a percentage of the debt you are trying to settle.

  • Lawyers: a one-time upfront fee of 10-25%, plus additional fees for legal research, document preparation, and court appearances. Sometimes, lawyers will charge an hourly rate for their work.
  • Debt settlement companies: a monthly fee of 15-25%, which covers the cost of negotiating with your creditors.


Debt settlement companies can damage your credit score because they force you to stop paying creditors while negotiating your debt settlement.

Depending on your financial situation, lawyers can negotiate with your creditors to protect your credit score by keeping your payments current. But there is no guarantee they will be successful.

Ethical Obligations

Debt consolidation attorneys are regulated by the bar association in the state where they operate.

Debt settlement companies are not subject to the same regulations as banks or other financial institutions, so there is a risk of being scammed.

What about DIY debt relief?

DIY debt relief can be successful, but only if you understand the risks.

A prime example lies in negotiations. People tend to offer to pay beyond what's necessary. Yet most creditors are open to settling for a reduced amount.

Often, over-offering inadvertently decreases a creditor's willingness to negotiate or it can result in inflated fees.

Handling debt yourself is only a good idea if you:

  • Have a relatively small amount of money outstanding
  • Are confident you can negotiate with creditors
  • Are willing to put in the time and effort to create and commit to a budget
  • Truly understand your options and the risks associated with each

If you don't require the assistance of a lawyer or a debt consolidation company to help trim down your debt, there are a few alternatives you can pursue:

  • Debt consolidation: Merge all your debts into a single loan with a lower interest rate to streamline payments. You can use a balance transfer credit card, home equity loan, or personal loan.
  • Debt negotiation: Negotiate with your creditors to lower your interest rates or monthly payments. Just remember there is no guarantee they will agree to settle for any amount.
  • Debt snowball: Pay off your smallest debt first, regardless of the interest rate, then take on the next highest balance—a good option if you have a lot of smaller debts.
  • Debt avalanche: Prioritizing debts with the highest interest rates to save money in the long run.

Mastering your budget for self-guided debt relief

A budget gives you a crystal-clear view of your financial standing, fine-tunes your spending patterns, and channels more funds toward chipping away at your debt.

Your budget goal should be to consistently pay more than the minimum required on your debt every month. This accelerates your debt payoff period, minimizes interest costs, and saves money.

If you need guidance with self-guided debt relief, many nonprofit debt counseling agencies can help. They will assist you in developing a practical budget that tracks spending, establishes financial goals, and keeps you motivated.

The best debt relief option for you

Ultimately, choosing between a debt consolidation attorney, debt settlement company, or DIY debt relief hinges on your unique financial circumstances, type of debt, and comfort with legal processes.

You may find it helpful to consult with a financial advisor or credit counselor before deciding.

Just be cautious of any lawyer or company that promises specific outcomes or overnight success. Managing debt is a complex and multi-step process.