Compare debt relief programs in 2023

Debt relief programs like debt settlement often require making every single payment on time in order to settle all of your accounts. And for many, the benefit of paying less makes it worth the effort. Be prepared to spend three to five years working with a debt relief company to see results.

Compare legit debt relief companies

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Name	Product	Costs	Requirements
Freedom Debt Relief Not rated yet Freedom Debt Relief Not rated yet		Monthly payment based on enrolled debt, no upfront fees	Must have at least $7,500 in unsecured debt, have a hardship is preventing the ability to pay creditors, and live in a serviced state.	Freedom Debt Relief works to help people with unmanageable, unsecured debt get back on their feet.	Go to site More Info	Compare	loading Fetching your data...
Accredited Debt Relief Not rated yet Accredited Debt Relief Not rated yet		Charges and fees vary by the company you're ultimately connected with	Must be at least 18 years old and a legal US resident; additional terms may apply based on services and products used.	This A+ BBB-rated service offers free consultations to lower your monthly payments help you get out of debt faster.	Go to site More Info	Compare	loading Fetching your data...
National Debt Relief Not rated yet National Debt Relief Not rated yet		15–25% of total enrolled debt	Must have a legitimate financial hardship which is preventing the ability to pay creditors and a minimum of $7,500 in debt.	Get back on your feet with a top-rated company that works with multiple types of debt.	Go to site More Info	Compare	loading Fetching your data...

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What is debt relief and is it legit?

Debt relief encompasses a wide scope of services, from negotiations with your creditors to debt management tools.

Some debt relief companies help you manage your current debt and budget repayments in an affordable way. Others, like debt settlement companies, negotiate with your creditors to reduce the amount you owe. For this to work, you may need to stop paying your creditors altogether.

Before you stop making payments, your debt settlement company should lay out all of the risks, including potential lawsuits.

In most cases, debt relief is legit. But you should avoid signing up with a company that doesn’t meet federal requirements or doesn’t provide much information on its website.

Interested? Watch our short guide where we give you the rundown of how you can qualify for debt relief and how much it may cost.

How will it affect my credit?

Credit counseling and debt management will have little to no impact on your credit score — but debt settlement or negotiation will.

If your company tells you to stop paying your creditors, you may face a lower credit score, more collection calls and a lawsuit once your debt is sold to collections.

If a lawsuit is successful, a debt collection agency may be able to garnish your wages for the amount owed, which could throw a wrench in the debt relief process.

Carefully consider the potential downsides to debt relief before signing up for a program.

Pros and cons of debt relief

5 types of debt relief programs

Debt relief doesn’t necessarily mean debt settlement. There are other ways to tackle your debt — although you’ll likely have to pay a fee for any option you find.

1. Credit counseling. Credit counselors help people in their community learn more about managing their finances. Check if your bank or credit union offers credit counseling or browse a list of credit counselors managed by the Department of Justice.
2. Debt management. This involves some negotiation with your creditors alongside a plan to help you pay off your debts.
3. Debt settlement. Similar to debt management, a debt settlement company negotiates on your behalf. It pays your creditor, and then you pay back the debt settlement company in low monthly payments over three to five years.
4. Debt consolidation. Debt consolidation is a good choice for smaller amounts of debt — provided you have good to excellent credit. Consolidating your payments makes debt easier to manage, and you may even be able to score a lower APR and pay less interest.
5. Bankruptcy. Bankruptcy should be your last choice. It stays on your credit for seven to 10 years and can significantly impact your ability to get a loan or credit card — even when that loan is for your business. However, it eliminates a large majority of your debt with no payment plan.

Are debt relief and debt consolidation the same thing?

Generally, debt relief refers to debt settlement or debt management, but debt consolidation can be a form of debt relief.

Debt consolidation is typically only available to people with good to excellent credit because it involves borrowing a new loan to pay off all your debts at once. This consolidates your payments, and could potentially lower them — if you’re able to score a lower average interest rate.

Debt settlement involves working with a company that will negotiate with your creditors on your behalf. The goal is to pay off your debt for less than you owe. However, most debt settlement companies charge a high fee and require you to stop paying your creditors, which could put you at risk of a lawsuit.

Debt consolidation vs. debt settlement

Debt consolidation and debt settlement are different ways to handle your debt — and have very different impacts to your credit.

What to look for in a debt relief company

Consider the following factors when comparing debt relief companies:

• Accreditation. Most legit debt relief companies are accredited with either the American Fair Credit Council (AFCC) or the International Association of Professional Debt Arbitrators (IAPDA).
• Not banned from debt relief. Because there are scams in the debt relief world, you should check the FTC list of companies and people banned from debt relief before you sign up for any program.
• Transparency. If you can’t find vital information like how much debt relief costs, how fees are calculated and how long the company has been in business, consider working with another provider.
• Costs. Debt relief companies often charge a fee for either a percentage of the total amount of debt you have or the amount they’re able to reduce your debt by. Most credit counseling services are free, though some may charge a small fee depending on your state.
• Direct or indirect negotiation. If you pick a debt settlement company, ensure it negotiates with your creditors directly. Indirect negotiation is uncommon and may put your information at risk when it transfers between companies.
• Eligibility. Many companies have restrictions on your total debt balance, types of debt and where you live. And some debt relief companies are geared toward different credit scores and income ranges.
• Customer reviews. Online review sites like the Better Business Bureau and Trustpilot are a good place to look out for red flags and learn what you can expect from a debt relief company.

8 steps to make the most of your debt relief program

These steps can help you make an informed decision when you choose a debt repayment strategy.

1. Take stock of everything you owe. Add up your total unsecured debts. Generally, you need at least $7,500 in debt to qualify for a debt relief program.
2. Review your credit score and budget. Check your credit score using a free service online. You’ll have the most options available if you have a FICO score above 670. Then calculate your monthly cash flow by subtracting your expenses from your income. What’s remaining is what you can afford to spend on debt relief.
3. Compare all your options. If you have good credit, positive cash flow and owe less than half of what you make in a year, a debt consolidation loan can be a good choice. But hiring a debt relief company to negotiate down your balance in exchange for a one-time payment may be a good option for higher debt loads.
4. Meet with a credit counselor. Nonprofit credit counseling agencies often offer free sessions to people who want professional advice on how to start. In a typical session, you’ll go over your finances and come up with a debt repayment plan.
5. Understand the full cost. One of the top complaints about debt settlement is that it’s more expensive than expected. You can adjust your expectations by going in knowing how much you’ll owe on your accounts by the end of the program and being prepared to pay taxes.
6. Play it safe. Don’t make any major career or life decisions that can impact your finances while you’re in debt relief. Changes to your income can make it difficult to keep up with your monthly payments toward your creditors and settlement fund.
7. Make payments on time, every time. Missing a payment toward your debt relief program can cancel your contract.
8. Don’t take on more debt. Most debt relief programs tell customers to stop using their credit cards while they’re enrolled. And with a debt load high enough to qualify for debt relief, you likely won’t be able to qualify for a new credit card or personal loan.

Finder’s top guides and reviews on debt relief

List of debt collection agencies

The debt collection process

Debt collection laws in every state

How to spot a fake debt collector

Beware of debt relief scams

While most debt relief companies are legit, there are scams out there. It’s easier to find a legit credit counseling agency than any other type of debt relief company — they’re mostly nonprofit and the Department of Justice has already done most of the work for you by compiling a government-approved list of credit counselors.

4 signs of a debt relief scam

It should set off alarm bells if you a see a company committing any of these offenses:

1. It charges upfront fees for its services.
2. It guarantees a specific amount of debt savings.
3. It promises it can settle lawsuits and stop calls from collection agencies.
4. It advertises itself as a new government program that can erase your debt.

It also pays to be aware of your state laws. Ensure that any debt relief company or attorney you’re working with holds the appropriate licenses and follows state regulations.

Debt relief alternatives

Handle your debt on your own with determination and a manageable budget.

• Repayment strategies. While it won’t result in a reduction to the amount you owe, you can adopt a repayment strategy like the debt avalanche or snowball methods to build your budget and pay off your debts in manageable chunks.
• DIY negotiations. Debt management and debt settlement companies negotiate on your behalf, but you can reach out to your creditors on your own. Explain your situation and see if you can lower the amount you owe or modify your repayment schedule.

Bottom line

If you’ve decided on settlement, consider these top debt relief companies when you’re ready to get started.

Frequently asked questions

What debt relief programs does the government offer?

The government itself doesn’t offer debt relief programs, but you’ll find government-approved credit counseling agencies. Avoid any debt relief companies advertising a “new” government debt relief program — it’s a common scam tactic designed to steal your money.

How do I continue to use my credit cards after I receive debt relief?

It depends on the type of debt relief you’re participating in. Talking with a credit counseling agency shouldn’t affect your ability to use existing credit cards.

But a debt settlement or debt management program might require you to cancel your credit cards, or could result in your credit card companies canceling your cards. You might be able to apply for additional cards after you’ve finished your debt relief program, but you won’t be able to use your old ones.

Look into secured credit cards designed to help rebuild your credit score.

What debt relief options exist for overdue taxes?

Work with the IRS to design a payment plan, reduce the amount of debt you owe or even pause collections on your debt. This service is done directly through the IRS, rather than an outside company. Alternatively, take out a personal loan to pay off your tax debt if you just need to break it up into more manageable installments.

How can I benefit from the Mortgage Forgiveness Debt Relief Act?

If your mortgage is canceled, you might not have to pay income taxes on up to $2 million of that canceled debt, according to this 2007 law. However, not everyone can qualify. Contact a tax specialist to make sure you meet all criteria.