Alert
Close

Help pack a million meals for struggling seniors on 9-11. Volunteer today

Highlights

Open

Driver Safety

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

Happy African American couple

AARP Books

Visit the Books Section

Enjoy titles on retirement, Social Security, and becoming debt-free.

Jobs You Might Like

most popular
articles

Viewed

Ask Sid

Who's Best to Help You Deal With Debt?

Q. I need help getting my debts under control. What's the difference among credit repair, debt settlement and credit counseling?

A. Credit repair companies are scams, says the Federal Trade Commission. For up-front fees—usually thousands of dollars—they falsely claim to have inside connections to remove bankruptcies, liens and other black marks from your credit report. Instead, they take your money and run—or flood credit-reporting bureaus with frivolous disputes, making your debts temporarily disappear from your credit report. But that only puts your file in a pending status, and no lender will issue you credit. Avoid them, period.

Debt settlement companies or attorneys negotiate with your creditors for you to pay less than the amount owed. This process is legal but can be expensive. Your negotiator’s fee is either charged monthly or is based on a percentage of your total debt or the amount of the reduction that is negotiated.

Either way, it can cost thousands, and you may be given the unwise advice to stop paying your bills during the negotiations.

What's more, not all debt settlement companies are legit: New York Attorney General Andrew Cuomo recently sued two for false advertising and fraudulent business practices, and launched a Web site warning about debt settlement.

The best option is credit counseling, which provides free or low-cost advice on money management, personalized debt repayment and consolidation, and similar services.

There are shady credit counselors out there also, so find a good one via the National Foundation for Credit Counseling (1-800-388-2227), which operates the oldest, largest and most respected nationwide network.

Sid Kirchheimer writes about consumer and health issues.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

Advertisement

The Cheap Life

Jeff Yeager Cheap Life Ultimate Cheapskate AARP YouTube web series save money

Catch the latest episode of The Cheap Life starring Jeff Yeager, AARP's Ultimate Cheapskate. Watch

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Member Benefits HomeServe

Members can protect their homes with comprehensive repair plans from HomeServe.

AARP Credit card from Chase

Members can get cash back rewards on purchases with the AARP® Credit Card from Chase.

Woman holding smartphone in city, Google map tool

Members can find discounts on the go via the AARP® Member Advantages Offer Finder app.

Member Benefits

Join or renew today! AARP members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points

Advertisement

Advance your skills. Transform your career.

Explore your learning possibilities.