I’ve Heard About Companies That Can Drastically Reduce Your Debt. Is That True? – Drew


“Dear Steve,

My student loans, rent, car payment, electric, phone, internet, and other bills are piling up. I don’t make much money, and my job is insecure.

I have heard of companies that can drastically reduce your debt. Is this true? Is there anything I can do to get out of debt fast and relieve some stress???


Dear Drew,

There is only one legal way to drastically reduce your debt fast and eliminate stress, bankruptcy. I’m afraid that all other claims of drastic debt elimination would fall into the same bucket with all those pills that make that certain part of the male anatomy, longer, bigger, or whatever it does.

There is no free lunch, no magic wand and no debt elf that will make your debt drastically reduce. That being said, there are ways, like lump-sum debt settlement, to pay part of your total debt. But the downside with that approach is that you need at least 60% of your total debt on hand in cash to do it. You don’t have that.

Any monthly payment debt settlement plan is only going to increase your stress as creditors stop getting paid at all and the debt settlement company starts saving up your monthly payments. Collection calls will increase and so will threats of being sued. That does not sound like a good approach for you since you want to reduce your stress over this.

The problem with your situation is that the bills that you’ve mentioned are fairly typical items and these are things that you’d need to pay for anyway. Bankruptcy will not eliminate student loans and unless you are going to go move in with someone else for free, the rest of your living expenses won’t be reduced either.

The two most logical ways to alter your current situation are going to be to either increase your income or reduce your expenses.

If you have a government backed student loan then go to www.ed.gov and search for information on the Income Contingent Repayment Plan (ICRP) and see if that can help you lower your student loan payments.


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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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