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Are Debt Relief Programs The Same Thing As Debt Settlement?

Hispanic mature women reading the mail, very concerning news

Question: My mother is elderly but has something like $12,000 in credit card bills she can’t pay off. She asked me what she should do, so I started looking into it. But I can’t easily figure out which options are legit and which are scams.

Then there are all these references to “debt relief programs,” but they seem interchangeable with “debt settlement programs” in some of the websites I visit. It’s very confusing. How can I figure out what’s for real? I don’t want to help my mother right into bankruptcy, and she doesn’t speak English. So I feel responsible for solving this.

— Guillermo in New Jersey

Howard Dvorkin answers…

This is one of the most common questions I hear. I answer it every year. (Here’s the 2017 version.) It’s also one of the most important questions I’m asked, so I’m not waiting long into 2018 for this year’s version.

One problem, of course, is that both terms sound so similar — throw in another term like debt management program, and it’s downright flustering. Another is that, as you mention, there’s a thriving market for hyperbole and even fraud in this industry. Why? Precisely because so many Americans are deeper in debt than ever before. It’s a target-rich environment.

So let’s deal with that first. has a report called How Do I Know Which Debt Relief Company To Trust? I’d suggest following those five steps, or taking just this one: Calling at the number on top of this page. We can introduce you to reputable agencies, because those we work with must adhere to our Code of Ethics.


Whatever you do, never sign up for any debt program based simply on a radio commercial or an unsolicited email. Like everything else in this world, there are far more good agencies than bad — but the bad ones tend to promote themselves the most, tainting everyone.

Now, about the differences between debt relief and debt settlement (and I’ll throw in debt management for good measure)…

Debt settlement is a type of debt relief.

I realize that sounds confusing, but it’s akin to saying Navy Seals are part of the Navy, but not the other way around. The Seals are a special force within the Navy. Likewise, debt settlement is one weapon in debt relief.

If you read the report Debt Relief Programs for Every Type of Debt, you’ll see “debt settlement” is option number seven. That section begins, “Debt settlement is the most damaging option for your credit.” Why? Because in your case, Guillermo, your mother would be paying less than she owes, and that doesn’t endear her to future lenders.

A debt management program might help without affecting your mother’s credit. You can read more at Debt Management Program Pros and Cons. As you’re probably figuring out, every option has its good and bad. In fact, you mentioned bankruptcy, and how you want your mother to avoid that. Depending on her circumstances, that may be the best option. Once again, I direct you to a balanced report: The Pros and Cons of Bankruptcy.

If you’re confused, Guillermo, feel free to call, which can refer you to a certified credit counselor who can talk you through these options. Best of all, can refer you to bilingual counselors, so your mother can participate in the decisions ahead of her.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.