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Understanding what debt relief options you qualify for is a big part of getting rid of your debt in 2025.
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We may be just a couple of months into the new year, but there has already been plenty of bad news about debt levels in the U.S., signaling that the issues we saw in late 2024 are continuing into 2025. For example, the latest Quarterly Report on Household Debt and Credit from the Federal Reserve, which was released earlier this month, showed that credit card debt has hit a new record nationwide and is now sitting at $1.21 trillion.
That’s not the only debt issue Americans are facing, either. Total household debt has also reached a new record, and credit card payment delinquencies are climbing, indicating that more and more people are struggling to stay current on their debt payments. And, with interest rates still high, it’s only getting more expensive to carry certain types of debt. In turn, many people are now looking into debt relief to try and get a hold of the issue.
Pursuing debt relief can be a smart move when you’re worried about keeping up with what you owe, but there are lots of options to choose from. Luckily, understanding which programs you qualify for can be the difference between getting back on track and falling deeper into financial trouble. So what does it take to qualify for debt relief in 2025? Below, we’ll detail what to know.
Explore the debt relief options available to you here.
How to qualify for debt relief in 2025
Whether you’re looking for a structured repayment plan, negotiating a settlement or considering bankruptcy, here’s how to qualify for debt relief this year:
Debt consolidation loans
A debt consolidation loan allows you to combine multiple debts into a single loan with a fixed interest rate and one monthly payment. Debt consolidation loans typically require a credit score of at least 620 to qualify, though you’ll get better rates with scores above 670. Lenders look for a debt-to-income (DTI) ratio below 50% and verifiable income that’s at least three times your monthly debt payments. You’ll typically need a consistent employment history of at least two years, but some lenders now offer specialized programs for self-employed individuals and gig workers that require 18 months of steady income rather than traditional employment.
Discuss your debt relief options with an expert today.
Debt consolidation programs
Unlike a standard consolidation loan, a debt consolidation program is typically offered through a debt relief company, which helps you secure a consolidation loan from a partner lender. These third-party programs have more flexible requirements than direct consolidation loans. Most companies require a minimum debt amount of a few thousand dollars and look for regular income that can cover reduced monthly payments. Credit scores could be as low as the 600 range (depending on the program), and only unsecured debts, like personal loans or credit card debt, can be consolidated. Government-backed student loans and secured debts like mortgages or car loans generally don’t qualify.
Credit card hardship programs
Credit card issuers sometimes offer hardship programs that can lower your interest rates, reduce monthly payments or temporarily pause payments if you’re facing financial issues. To qualify, you’ll generally need to demonstrate financial hardship through documentation like medical bills, job loss or significant income reduction. Most issuers require your account to be in good standing or no more than 90 days past due. Some companies now offer early hardship programs if you can show your income has dropped by 20% or more, even if you’re still current on payments.
Debt management plans
A debt management plan is a structured plan managed by a credit counseling agency. They negotiate with creditors to reduce interest rates and consolidate payments into one monthly installment. The main requirement to qualify is having enough income to cover a consolidated monthly payment that’s lower than your current obligations. There’s usually no minimum credit score requirement, but most programs require you to have at least $3,000 to $5,000 in unsecured debt.
Debt settlement
Debt settlement involves negotiating with creditors to pay off a portion of your total debt for less than what you owe. These programs are typically offered by debt relief companies, and while the requirements vary by program, to qualify, you typically need to be behind on payments, have at least $5,000 to $10,000 in unsecured debt and demonstrate an inability to repay the full amount. Credit scores aren’t a factor, but you should be prepared for a significant negative impact on your credit during the process.
Bankruptcy
Bankruptcy is a legal process that can eliminate or restructure debts, offering a fresh financial start. Chapter 7 bankruptcy requires passing a means test, showing your income is below your state’s median income for your household size. If you don’t qualify for Chapter 7, Chapter 13 requires regular income sufficient to make structured payments over three to five years. Both types require completion of credit counseling from an approved agency within 180 days before filing. You’ll also need to show you haven’t had a bankruptcy discharge in the past eight years for Chapter 7 or six years for Chapter 13.
The bottom line
Qualifying for debt relief can vary based on the option you’re considering, but will typically be based on factors like your financial situation, credit history and ability to repay. While some solutions, like consolidation loans, require good credit, others, like debt settlement, are designed for those experiencing severe financial hardship. The key to finding the right option is to assess your needs, research the solutions you can meet the requirements for and seek professional guidance if necessary.
Angelica Leicht
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