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Compare debt relief programs

Does debt relief really work? And how long does it typically take?

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Editor's choice: National Debt Relief

National Debt Relief logo
  • No cancellation fees
  • Low minimum to enroll
  • No upfront fees
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Start your search for the company that best fits your financial need by comparing costs and requirements.

Data indicated here is updated regularly
Name Product Costs Requirements
National Debt Relief
18–25% 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 debt relief company that works with multiple types of debt.
Freedom Debt Relief
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 is a debt settlement company that works to help people with unmanageable, unsecured debt get back on their feet.
Accredited Debt Relief
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.
Pacific Debt
15%–25% of total debt enrolled. Fees vary by state of residence.
Reside in a state where PDI’s services are available and have $10,000+ of debt to enroll
Consolidated Credit
Fees regulated by client's state of residence, can range from$0 to $69 with an average monthly fee of $35. No upfront or contingency fees.
Debt must not be payday loans or secured loans.
This debt settlement alternative can help you find a path to financial freedom.
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Before you sign up with a debt relief company

Debt relief companies typically charge a percentage of a customer’s debt or a monthly program fee for their services. And not all companies are transparent about these costs or drawbacks that can negatively affect your credit score. Depending on the company you work with, you might pay other fees for third-party settlement services or setting up new accounts, which can leave you in a worse situation than when you signed up.

Consider alternatives before signing up with a debt relief company:

  • Payment extensions. Companies you owe may be willing to extend your payment due date or put you on a longer payment plan if you ask.
  • Nonprofit credit counseling. Look for free debt-management help from nonprofit organizations like the National Foundation for Credit Counseling.
  • Debt settlement. If you can manage to pay a portion of the bill, offer the collection agency a one-time payment as a settlement. Collection agencies are often willing to accept a lower payment on your debt to close the account.

Debt relief programs like debt settlement have a low completion rate — but for many, the benefit of paying less outweighs the risks. However, be prepared to spend three to five years working with a debt relief company to see results.

Pros

  • Expert advice from debt professionals
  • Potentially reduce interest or total debt
  • Lower your monthly debt payments

Cons

  • Debt settlement programs have a low 10% completion rate
  • Forgiven debt considered taxable income
  • Creditors may pursue legal action for missed payments

Some of the debt relief providers we reviewed

Find a lender in our directory of 20+ reviews

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.

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.

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.

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.

  • Credit counseling. Credit counselors are nonprofit organizations that help people in their community learn more about managing their finances. You can browse a list of credit counselors managed by the Department of Justice.
  • Debt management. This involves some negotiation with your creditors alongside a plan to help you pay off your debts.
  • 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.
  • Debt consolidation. Debt consolidation is a good choice for smaller amounts of debt — provided you have good to excellent credit. You can consolidate your payments to make debt easier to manage, and you may even be able to score a lower APR and pay less interest.
  • Bankruptcy. Bankruptcy should be your last choice. It stays on your credit for seven to 10 years and can significantly impact your ability to borrow. However, it eliminates a large majority of your debt with no payment plan.

Debt relief options during the coronavirus

Almost every major lender — and many smaller lenders — are offering financial assistance for borrowers affected by COVID-19. The most typical form of relief is deferment or forbearance for your loans. While this will pause payments for one to three months, it may lead to you paying more in interest over the life of your loan. However, it can provide a small cushion to help prevent default if your finances have taken a turn for the worse during the pandemic.

Some business owners may also be able to qualify for business debt relief, including six months of payment relief through the SBA.

Are debt relief and debt consolidation the same thing?

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

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’s transferred 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 BBB and Trustpilot are a good place to look out for red flags and learn what you can expect from a debt relief company.

Finder’s top guides and reviews on debt relief

What to know about debt settlement costs

While debt settlement can be helpful for a lot of people, know what you’ll have to pay before you get started.

  • Fees aren’t based only on your initial debt. Fees depend on your total debt and are hard to predict. It depends on how quickly your debts are settled, how interest accumulates, if you continue payments, whether you have late fees and more.
  • Debt settlement counts as income. Any settled debt of more than $600 is considered taxable income. After taxes, you could end up saving only 10% — or less.

There is a tax loophole, however: You might be exempt if your tax liabilities are greater than your assets at the time of the settlement. Talk with a tax specialist before enrolling in a debt settlement program to learn how this exemption might affect you.

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.

Student loan debt relief scams

The most recent government crackdown has focused on student loan debt relief scams — one reason why most legit debt relief companies won’t touch student loans.

Watch out for any offers that try to get you to sign up for a new program fast, customer service reps that ask for your login information and anyone who claims to be a representative from the Department of Education. And check out our guide to avoiding student loan debt relief scams for more tips on what to look out for.

Debt relief alternatives

You can 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 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.

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