| DIY/direct negotiation | Consumer deals directly with creditor or collector. CFPB specifically identifies direct negotiation as an alternative to a debt-relief program. | Consumer tracks debts, deadlines, documentation, settlement funds, tax documents, and any litigation. | No third-party settlement-company fee, but the same creditor, tax, collection, litigation, and credit risks can exist. [D001-C035]
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| For-profit settlement company | Negotiates enrolled debts under its service agreement. | Consumer remains the debtor, must fund agreed payments, review settlements, and respond appropriately to court/legal matters unless separate legal representation exists. | Provider fee, possible dedicated-account fee, unresolved debts, balance growth, creditor refusal, suit risk. Covered telemarketing adds TSR protections. [D001-C002, C014–C020]
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| Consumer attorney — negotiation only | Lawyer may be retained to advise/negotiate, subject to the engagement's stated scope and applicable professional-responsibility law. | Scope depends on the engagement. Negotiation-only work should not be portrayed as automatic litigation defense. | Attorney fee structure is contract/state dependent; no national market rate was verified in D001. |
| Consumer attorney — full representation | May include negotiation plus defense of a collection lawsuit or bankruptcy advice when included in engagement. | Lawyer/client responsibilities depend on engagement and procedural rules. | Attorney fees and possible court costs; potentially more appropriate when legal defenses, active litigation, liens, garnishment, collateral, or bankruptcy issues dominate. |
| Legal aid/pro bono | May provide qualifying civil legal help according to recipient policy, case priorities and capacity. The corrected LSC rule analysis includes multiple above-ceiling income pathways, asset rules and no entitlement. | Applicant must qualify and program must accept the matter; eligibility does not create an entitlement to representation. | Availability and eligibility require the actual program’s assessment; no hard nationwide 125% cutoff, universal 200% cap or program-count claim is made. |
| Nonprofit credit counseling/DMP | CFPB identifies nonprofit credit counseling as an alternative to debt settlement. A debt-management plan generally focuses on repayment terms rather than negotiated principal cancellation. | Consumer must make plan payments and confirm creditor participation. | Plan/setup fees may exist; legal rules and state caps depend on provider and jurisdiction. [D001-C036]
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| Bankruptcy advice/filing | Federal legal process rather than bilateral settlement. | Debtor has statutory disclosure, eligibility, counseling, and procedural duties; an attorney may represent the debtor. | Filing fees, possible attorney and counseling costs, and procedural consequences differ from settlement. Verify the court’s current fee schedule; this extract does not provide a current filing-fee quote. |