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Best debt relief companies of 2020

Look for lowest fees and the widest range of services.

Updated

Fact checked

Editor's choice: Freedom Debt Relief

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  • Flexible payments
  • Leader in debt negotiation
  • No upfront fees
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Debt relief companies are designed to act as a last resort before filing for bankruptcy. If they sound too good to be true, that’s because they sometimes are. But there are also some trustworthy companies out there.

Before you sign up, look into free options or even working as your own advocate. That could save you hundreds or even thousands, depending on how much debt you have.

What we looked for in a debt relief company

When choosing the best debt relief companies, we first confirmed each provider’s legitimacy, business practices and website security. We also looked at customer reviews from the Better Business Bureau and Trustpilot.

We then analyzed and compared each company based on factors like how long they take, what types of debt they settle, minimum debt requirements, fees, credit disclosure documentation, transparency, accreditation and customer satisfaction. We also considered state restrictions and legal actions taken against the companies.

Best 5 debt relief companies

CompanyBest forMinimum debtTypical costsTypical turnaroundState availability
National Debt ReliefPrivate student loans$7,50018–25% of total enrolled debt24–48 months.Not available in CT, KS, ME, SC, OR, VT WV or NHGo to site
American Credit Card SolutionsLow-commitment debt relief$10,00015% – 25% of enrolled debt.2 – 4 yearsDoesn’t disclose — licensed in 25 states.Go to site
New Era Debt SolutionsLow-cost debt settlementNone16% to 20% of enrolled debtAround 2 yearsDoesn’t disclose — but some states are ineligible.
CuraDebtTax relief$10,00020% of enrolled debt3 years
  • Debt relief not available in: CT, DE, GA, HI, ID, KS, KY, LA, ME, MT, ND, NH, NJ, NV, OH, OR, PA, PR, RI, SC, TN, UT, VT, WV, and WY.
  • Tax Services is not available in PA and Puerto Rico.
Consolidated CreditDebt managementNoneFees 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.VariesAll 50 states, Puerto Rico, American Samoa, Guam, Northern Mariana Islands and US Virgin IslandsGo to site

What is debt relief?

Debt relief covers a wide range of services that are designed to help reduce your debt or come up with a strategy to pay down your balances. The following types of programs typically fall under debt relief:

  • Credit counseling. Meet with an expert to go over your budget, bills and credit account to decide how to move forward.
  • Debt consolidation. Take out a loan or balance transfer credit card with a lower rate to pay off your credit accounts.
  • Debt management. Hire a company to negotiate the rates and terms of your accounts for repayments that fit your budget.
  • Debt settlement. Hire a company to negotiate down your balance in exchange for a lump-sum payment — sometimes referred to as debt negotiation or debt relief.
  • Bankruptcy services. Hire legal representation to help you navigate the bankruptcy process.

Debt settlement is often the most common type of debt relief out there — but also the most risky. You can read our guide to debt relief for more information on how each type works.

How to find a legit debt relief service

Debt relief has earned itself a somewhat shady reputation, thanks to the rise of scam companies in the early 2000s. Although a 2010 federal crackdown cleaned up the industry in part, scammers are always creating new ways to take your money.

It’s possible to avoid a scam by doing some research first. When considering a debt relief company, ask yourself the following questions.

Is it legal in your state?

Some state regulations limit or outright prevent debt relief services from operating in that state. Be sure to know whether or not you can sign up.

What’s the cost and how will you pay?

Fees are usually a percentage of the debt you enrolled, often from 15% to 25% of that amount. For credit counseling or debt management, you might pay a monthly fee of around $35.

It’s illegal for debt relief services to charge you a fee before they’ve provided results. Most legit companies also won’t ask for fees all at once, preferring steady payments toward settlement accounts and services.

Is it accredited?

Many legit debt relief company are accredited with the American Fair Credit Council or the IAPDA, which set and maintain industry standards.

How long has it been around?

While not always the case, older more-established businesses feel less pressure to engage in unsavory business practices to stay afloat.

How transparent is it?

Can you find answers to most of your questions with a few clicks online? Is it clear what services it provides, and is that information consistent? What happens if you call in?

If you can’t get a straight answer before handing over sensitive information, it’s time to consider other options.

How much control will you have?

Debt settlement companies work by having you pay into an account from which the company then pays your debt settlement fee. By law, you control these funds and can even withdraw from them without a penalty.

Is there a minimum debt?

Debt management companies shouldn’t enforce a minimum enrolled debt amount. Better debt settlement companies are willing to work with debt on the lower end — from $7,500 to $10,000.

What types of debts does it settle?

Established debt relief companies can settle private student loans and even some secured debt, but most only handle basic unsecured debts like medical bills, personal loans and credit cards. It’s illegal for debt settlement companies to settle federal student loans.

What timeline does it advertise?

Typically, debt settlement programs take two to four years. Try to avoid longer terms — it increases your risk of facing a lawsuit or not completing the program.

How much will I save?

It’s impossible to know how your negotiations will go, but some companies will disclose how much past clients have saved to get a ballpark idea of what you’re in for. If it promises 100% savings — or really any amount of savings — it could be a scam.

How did you hear about them?

If the company solicited you for its services, make sure advertised promises are true. Otherwise, it’s not following government regulations.

What do customers say?

Look for reviews and complaints on sites like the Better Business Bureau (BBB), the Consumer Financial Protection Bureau and Trustpilot to get an idea of what you can expect as a customer.

While reviews tend to represent extreme situations, they can give you an idea of red flags to look out for. And you can find out if there have been any government actions against the company on the BBB website.

What is the International Association of Professional Debt Arbitrators?

The IAPDA is a professional organization that trains and certifies individuals in debt settlement and accredits trusted debt settlement companies. Accreditation by the IAPDA means that a significant number of individuals in the company are certified debt consultants, but it’s always a good idea to make sure your personal consultant is certified, even when working with a trusted and accredited company.

Beware of the consequences of debt settlement

Debt settlement can be useful in certain situations when you’ve exhausted all other ways to get your debt under control, like applying for a balance transfer credit card or debt consolidation loan. However, there are a few drawbacks to debt relief you should consider before signing up.

First and foremost, debt settlement will damage your credit score and isn’t guaranteed to work. In fact, only around 10% of people who enroll in debt relief programs actually complete them. And with many programs, it’s difficult to continue paying your creditors while also putting money toward your debt settlement escrow account. This puts you at risk of being sued by your creditors.

If you do complete the program, any settled debt will be considered taxable income. Add fees and interest that accumulated while you’re in the program, and you might not save as much as you thought you would.

Compare more debt relief companies

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 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.
American Credit Card Solutions
No upfront costs — settlement fees range from 15% to 25%, depending on your state of residence and amount of debt.
Must live in a state that American Credit Card Solutions serves, $10,000+ in unsecured debt, legitimate financial hardship which is preventing the ability to pay creditors
Overall positive customer ratings — but it's only available in 25 states.
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Compare up to 4 providers

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 they aren’t always transparent about these costs or drawbacks that can negatively affect your credit score. 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.

Are there any free or low-cost alternatives?

Yes, you don’t have to pay for the results you’d get from a debt relief company.

Nonprofit credit counseling

Some credit counseling companies are free, since the Department of Justice (DOJ) requires you to enroll in credit counseling as a part of some bankruptcy proceedings. Look for a nonprofit agency or visit the DOJ’s website to find a low-cost or free agency near you.

Government debt relief programs

The federal government offers some debt relief programs for federal loans and mortgages that can help slash or reduce your debts.

  • Making Home Affordable. A government mortgage assistance program that can help reduce the amount you owe. This program is also called HAMP, HAFA and HARP.
  • Federal student loan forgiveness. Forgiveness programs like Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness allow you to wipe out all or part of your debt in exchange for working in public service for several years.
  • Government grants. Low-income individuals might qualify for a government grant to cover costs — especially if you’re faced with an unexpected expenses. You may be able to use these funds to pay down your debt.

DIY debt negotiation

Be your own advocate and negotiate down your balances or ask for a better term from your creditors. While you won’t have as much experience as a professional, you’ll avoid potential scams and know that you have your own best interests in mind.

Read our step-by-step guide to settling debt without an expert to learn what to expect.

Bottom line

Debt relief can be a legitimate path to get out of unmanageable debt situations — but only when approached carefully and using the most reputable services.

If you have the creditworthiness to qualify for a debt consolidation loan or balance transfer credit card, that might be a better option for you. But if you’re dealing with a debilitating amount of debt and trying to improve a low credit score, be sure to compare all of your debt relief options before choosing the company that’s right for you.

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