The Expert’s Guide to Paying Off Debt

At ACCS, we know that every financial situation is unique—especially when it comes to paying off debt. The types of debt accrued, the amount owed on each account, and many other factors come into play when forming your specific financial picture.

If you’re currently struggling with unsecured debt, such as credit card, personal loan, or medical bills, and find yourself searching for effective ways to achieve financial freedom, we’ve got you covered! Our expert guide will help provide you with a complete overview of the types of debt relief strategies available, who they work best for, and the benefits of each one.  

Credit Counseling

Works best if: you can afford to pay back your debt but require a bit of guidance to help get your finances in order.

How it works: Often provided by financial education organizations, credit counseling involves working with an experienced, professional credit counselor to take an in-depth review of your financial situation and develop a customized plan to get your financial situation back on track. Counseling sessions often involve creating a monthly budget, identifying areas where you can save, and rethinking your current spending habits. While you’ll still have the full amount of your debt to pay, you’ll be equipped with the knowledge and confidence to tackle it successfully on your own! 

Debt Consolidation

Works best if: you have $5K or more of unsecured debt across multiple accounts and struggle to keep up with making full monthly payments to each one.

How it works: Through debt consolidation, you take the funds received from a personal loan to pay off all of your other debts. In return, you’ll have one monthly payment to a single lender instead of several payments to multiple lenders. This new monthly payment will often be more manageable—personal loans tend to offer lower interest rates than most credit cards—which means you’ll be able to stay focused and pay off your debt faster. 

Debt Settlement

Works best if: you have debt of $10K+ or are facing a significant financial hardship, and seek an alternative to bankruptcy. 

How it works: During the debt settlement process, yourself or a representative from a debt relief company working on your behalf will negotiate with your creditors to settle your debt for less than what you owe.

The key benefit to this approach is that if you decide to enroll with a debt relief company, like American Credit Card Solutions, you’ll have an experienced debt specialist working on your behalf to handle your negotiations for you. Having a trusted partner on your side to settle your debt typically provides better outcomes—and means less time you have to deal directly with creditors. 

Cash-Out Refinancing

Works best if: you own your home and have equity built up to cover the difference between your current mortgage and your total debt owed. 

How it works: a cash-out refinance replaces your existing mortgage with a new home loan for a larger amount. This new loan includes how much you currently owe on your home plus the additional money needed to consolidate and pay off your debt. With your refinanced mortgage, you’ll have a new, and most likely, larger monthly payment and updated term of typically 15 or 30 years. 

Before considering this strategy, it’s essential to understand the potential risk. Because this type of loan is regarded as a secured loan, any inability to repay could result in your home’s foreclosure. 


Works best when: you are in a dire situation where debt becomes impossible to pay down due to extreme financial hardship that will not resolve.

How it works: there are two types of bankruptcy individuals can file — Chapter 7 or Chapter 13. Chapter 7 bankruptcy means you sell all of your non-exempt assets to pay off your creditors, while Chapter 13 bankruptcy means you establish a repayment plan with your creditors. 

Either way, your credit rating will take a hard hit. Bankruptcy information stays on your credit report for 7-10 years and will greatly impact your ability to get a credit card, finance an automobile, or even rent an apartment. However, once that time has passed, you’ll be able to start rebuilding your credit and your financial future. 

We hope our guide helped to provide a better understanding of which debt relief option may be the right course of action for your unique financial needs. 

If you find that you have more questions or need further assistance, we’re here to help! Request a Custom Debt Relief Plan through ACCS. Our debt specialists are here to listen and connect you to your best debt relief solution. Reach out to us today with no cost or obligation!

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