TIPS
Managing money during a crisis

Finder makes money from featured partners, but editorial opinions are our own. Advertiser Disclosure

Best debt relief companies

Look for lowest fees and the widest range of services.

Avatar
Anna Serio
Updated . What changed?
Fact checked

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.

5 best debt relief companies

Best for student loans


National Debt Relief

Go to site

 Read review

This debt settlement company is one of the few that will work with private student loan providers — though federal loans are always off the table when it comes to student loans. Costs start relatively low, though they can run as high as 25% of your settled debt amount. And if you aren’t happy with your experience, National Debt Relief claims to offer a 100% money back guarantee. But it gets mixed customer reviews, especially compared to other debt relief companies.

  • Not available in: Connecticut, Kansas, Maine, New Hampshire, Oregon, South Carolina, Vermont, West Virginia

Best for low-cost debt management


Consolidated Credit

Go to site

 Read review

This debt settlement company charges fees as low as 16% of the debt you enroll in its debt settlement program. There’s also no minimum debt requirement — but the average customer brings over $750. The average turnaround is around two years — much faster than most debt relief companies. And it offers discounts of up to 4% for military personnel and veterans. But the types of debt you can enroll in are relatively limited. Medical bills, taxes and loans from credit unions are off limits.

  • Not available in: Hawaii

Best for low-commitment debt relief


American Credit Card Solutions

American Credit Card Solutions offers a 30-day trial period where you can pull out with full refund on any fees you’ve paid on enrolled debts that haven’t been settled. And the fees themselves start low, at 15% — but can also run as high as 25%, depending on your state. But it’s only licensed in 17 states. And it requires you to enroll at least $10,000 — high compared to many other companies.

  • Available in: Alabama, Alaska, Arizona, Arkansas, California, District of Columbia, Florida, Maryland, Michigan, Nebraska, New Mexico, New York, North Carolina, Oklahoma, Pennsylvania, Texas, Wisconsin

Best for low-cost debt settlement


New Era Debt Solutions

This debt settlement company charges fees as low as 16% of the debt you enroll in its debt settlement program. There’s also no minimum debt requirement — but the average customer brings over $750. The average turnaround is around two years — much faster than most debt relief companies. And it offers discounts of up to 4% for military personnel and veterans. But the types of debt you can enroll in are relatively limited. Medical bills, taxes and loans from credit unions are off limits.

  • Not available in: Hawaii, Maine

Best for tax relief


CuraDebt

Read Review

CuraDebt is one of a handful of companies that offers tax relief. And while CuraDebt’s 20% fee is on the high end, the savings might make up for it. It claims to have settled up to 100% of some of its clients debts in the past. How? It goes after the legality of the debt, rather than just trying to negotiate it down. But its customer service is lacking — we couldn’t get a straight answer from customer service. And it doesn’t have a lot of basic information available online.

  • Not available in: Colorado, Illinois, Washington, Wisconsin

How we picked these providers

Our team vetted and reviewed nearly 20 debt relief companies before we came up with this list. We considered factors like fees, typical turnaround time and debt enrollment minimums. We also looked at the types of services offered and types of debts they work with, as well as any additional perks — like discounts for service members.

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.

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

Narrow down top debt relief companies by costs and requirements to find the best for your budget and financial goals. Select Compare for up to four providers to see their benefits side by side.

Updated regularly
Name Product Costs Requirements
Freedom Debt Relief
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 works to help people with unmanageable, unsecured debt get back on their feet.
Go to site
More Info
Accredited Debt Relief
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.
Go to site
More Info
National Debt Relief
National Debt Relief
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
loading

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 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.

What is a debt relief loan?

A debt relief loan is most often a type of debt consolidation loan available to people with fair or bad credit. A debt consolidation loan is an unsecured personal loan that you can use to pay off other unsecured debts with one fixed repayment.

Often, you can’t qualify for a debt consolidation loan unless you have a credit score of 670 or higher. Companies advertising debt relief loans often accept low credit scores. But they also charge rates closer to 36% — the maximum many states will allow.

Is taking out a loan to pay off your debt a good idea?

Taking out a loan to pay off debt isn’t always a good idea. If you have good credit and owe less than half of what you make in a year, you might be able benefit from debt consolidation. But with larger debts or bad credit, a debt consolidation loan likely won’t give you a lower rate or monthly repayments within your budget.

Also, avoid taking out a loan to cover a month or two of debt repayments when you’re in a jam. While it might preserve your credit score in the short-term, it will increase your personal debt load and your future monthly expenses. Instead, reach out to your lender and ask about deferring your loan for a few months or reworking your loan terms.

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.

Frequently asked questions

Can a debt relief company help me with loans I've defaulted on?

Possibly. If you’ve recently defaulted on a personal loan, a debt relief company may be able to help you get out of default and begin making on-time payments again. If your loan is in collections, the company may be able to help you negotiate a settlement.

Should I try debt settlement or file for bankruptcy?

It depends on your unique financial situation. If you’re able to settle your debts, it can have a less drastic impact on your credit score. However, if you fail to settle your debts and have to file for bankruptcy anyways, you could end up in worse shape than if you’d gone straight to bankruptcy. Read our guide on debt settlement versus bankruptcy to learn more about how to decide.

How long will a debt settlement stay on my credit report?

Debt settlement will stay on your credit report for seven years from the date the debt was settled.

More guides on Finder

Ask an Expert

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and finder.com Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site