Getting on top of debt
What to do first, what debt collectors can and cannot do, and the main ways to get out of debt, explained without the sales pitch.
Falling behind on debt is common, and there is usually more room to act than it feels like at the start. The first step is to find out exactly what you owe, to whom, and what each account is costing you. Your credit reports list most of your debts, and you can get them free from each of the three nationwide credit bureaus through AnnualCreditReport.com.
If you cannot cover everything, the order matters. Housing, utilities, food, transportation to work and essential insurance usually come first, because losing them makes everything else harder. Unsecured debts such as credit cards and medical bills come later in the order, even though they can feel the most urgent when the calls start.
There are several routes out of debt, and the right one depends on how much you owe, your income and what you want to protect. They include paying down balances yourself, working with a nonprofit credit counselor on a debt management plan, negotiating with creditors, debt settlement, and bankruptcy. Each has costs and consequences, and some companies that advertise debt relief charge a lot for what you can do for free. A nonprofit credit counselor is a sensible place to start.
What people ask us about debt
Where to start when you are behind
How to list what you owe, work out what you can afford and decide which bills come first.
Dealing with debt collectors
What the Fair Debt Collection Practices Act says collectors can and cannot do, and how to ask them to prove a debt.
Credit counseling and debt management plans
What a nonprofit counselor does, what a plan costs and how it affects your accounts.
Debt settlement
How settlement works, why it is risky, and the fees and tax effects to understand first.
Bankruptcy
The difference between Chapter 7 and Chapter 13, what is protected and what it does to your credit.
Medical debt and student loans
The special rules and options that apply to these two common kinds of debt.
All debt guides
Credit Counseling and Debt Management Plans Explained
How nonprofit credit counseling and debt management plans work, what they cost, the red flags to avoid and the questions to ask before you sign anything.
8 min readRead Debt CollectionTime-Barred Debt: What an Old Debt Means for You
How the statute of limitations on debt works in the US, why a payment can restart the clock, and what to do if a collector contacts you about an old debt.
7 min readRead Debt CollectionYour Rights When a Debt Collector Contacts You
What debt collectors can and can't do under US federal law: calling hours, validation notices, the 30-day dispute window and how to make them stop.
7 min readReadCommon questions
Do I have to pay a company to get help with debt?
No. Nonprofit credit counseling agencies, including those in the National Foundation for Credit Counseling network, offer free or low-cost help, and the Federal Trade Commission warns against debt relief companies that ask for fees before they have settled or reduced any of your debt.
Can a debt collector contact me at work?
Federal law limits when and where collectors can contact you, and they must stop contacting you at work if you tell them your employer does not allow it. You can also ask a collector in writing to stop contacting you, although that does not make the debt go away.
Will I lose my home if I fall behind on credit cards?
Credit card debt is unsecured, so the card company cannot take your home just for unpaid card balances. It can sue you, and if it wins a judgment it may be able to collect through methods your state allows, such as wage garnishment or a bank levy. Rules vary by state, so check yours.
Official sources and free help
- National Foundation for Credit Counseling(opens in a new tab)
Find a nonprofit credit counselor. No upfront fees and no obligation.
- Consumer Financial Protection Bureau(opens in a new tab)
Guides on debt collection, credit reports and your rights, plus a way to submit a complaint.
- Federal Trade Commission: consumer advice(opens in a new tab)
How to spot debt relief scams and what to do about them.
- AnnualCreditReport.com(opens in a new tab)
The official site for free credit reports from all three bureaus.
This page provides general information only. It is not personalized financial, legal or tax advice, and rules and figures can change and can differ from state to state. Your situation is unique, so please check official sources such as the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC), and speak to a qualified nonprofit credit counseling or legal professional before making important decisions about your money.