While customers have mostly good things to say, it's faced a few alarming lawsuits in the past.
Struggling with unmanageable debt? You might want to consider Freedom Debt Relief as a last resort to avoid filing for bankruptcy. It offers a debt settlement program with a free consultation, but signing up will likely damage your credit score. And only a fraction of people who enroll in a debt relief program actually complete it.
Customers make monthly payments into an account to save up for the cost of settlement and fees. Freedom Debt Relief doesn’t ask for payment up front.
You’ll pay a monthly deposit over the course of the program that depends on how much you can afford and your total debt. A typical program runs between two and four years.
How much could I save with Freedom Debt Relief?
Customers typically see a substantial reduction of their enrolled debt after paying fees. But how much you’ll save depends on your unique financial situation and where you live, among other factors. Any potential savings are also dependent on how much your creditors are willing to negotiate down your debt — some creditors might be more accommodating than others, though.
What are the benefits and drawbacks of Freedom Debt Relief?
It’s easy to track your progress. Check on your progress through your online dashboard.
Helpful customer service. Customers praise the customer service team for their helpful answers to questions about the debt relief process.
It helped set industry standards. Freedom Debt Relief is a founding member of the American Fair Credit Council, which standardizes industry practices. It also had a hand in establishing the Federal Trade Commission’s rules banning abusive debt settlement practices in 2010.
At risk of getting sued. Former customers complained of getting sued by their creditors since they had to stop paying them in order to save enough in their trust account to begin negotiations.
Program could take longer than expected. This is a main customer complaint, which means you might need to prepare for the long haul. On average the program takes two to four years.
Debt settlement not guaranteed. There’s always the risk that your creditors will refuse to allow you to settle your debt.
Not available in all 50 states. Freedom Debt Relief operates in 38 states, three territories and Washington, DC — where debt settlement services are permitted.
Does Freedom Debt Relief offer services in my state?
Debt settlement services are regulated by state law. If you live in one of the following states, you won’t be able to sign up for Freedom Debt Relief’s services:
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.
What is Freedom Debt Relief?
Freedom Debt Relief is a debt settlement company that works to help people with unmanageable, unsecured debt get back on their feet. It was founded in 2002 by two Stanford Business School alumni to offer better options for consumers struggling with debt.
Today, it’s an industry heavyweight with a hand in setting the standards for the debt settlement industry.
How does it work?
Like other debt settlement companies, Freedom Debt Relief negotiates with your lenders to reduce how much you owe. It asks you to pay a percentage of the debt you want settled — known as enrolled debt — in exchange for its services.
What do customers say about Freedom Debt Relief?
Customer reviews of Freedom Debt Relief are mostly positive as of March 2019, but they aren’t without a few caveats.
Though it’s not accredited with the Better Business Bureau (BBB), it earns an A+ rating based on factors like transparency and time in business. It scores an average 4.5 out of 5 stars based on over 2,800 customer reviews. It does even better on Trustpilot, where more than 19,000 reviewers result in a collective 9.1 out of 10 rating.
Many customers report a helpful service and relief at no longer having to deal with their creditors. However, a top complaint is that the program took longer than expected — or may not have worked at all.
It’s not an encouraging sign, however, that one of Google’s autocompletes for Freedom Debt Relief is Freedom Debt Relief lies. Online forums speculate that a competitor debt relief company ran a smear campaign against Freedom Debt Relief, but that claim is difficult to verify.
Is it safe to use Freedom Debt Relief?
Generally, yes — by debt settlement standards. You can opt out of having your personal financial information shared with affiliates. Freedom Debt Relief is a founding member of the American Fair Credit Council, a trade association that sets industry standards that govern business transparency practices.
Freedom Debt Relief lawsuits
Freedom Debt Relief has made some unsettling headlines over the past decade. In 2009, it settled a suit brought on by a California district attorney accusing the company of failing to contact its customers’ creditors despite charging them to do so.
Many trusting customers stopped making repayments on their debt after signing on with Freedom Debt Relief, only to find their accounts sent to collection agencies. Some were even being sued by their creditors.
The company made headlines again in November 2017, when the Consumer Financial Protection Bureau filed a suit accusing Freedom of “coaching” consumers instead of dealing with the creditors directly. In some cases, the company still charged its fee when consumers had to negotiate themselves or even when a creditor simply stopped collections without a settlement. And lastly, Freedom did not clearly tell their consumers that they had the right to their own account funds after they withdrew from Freedom’s program.
These are all red flags of a potential scam, so stay up to date on your state’s laws and investigate anything that sounds off to you. Read your contract carefully to make sure you’re aware of all disclosures.
How do I get started?
You can sign up for a risk-free debt relief consultation to see if the service is right for you online, by emailing email@example.com or by calling 800-910-0065.
Here’s how to get started online:
Go to the Freedom Debt Relief website and click Find debt relief options.
Choose your unsecured debt amount and click Continue.
Select whether you’re behind on your payments.
Select what state you live in.
Enter your contact information and click Click to see your results.
A Freedom Debt Relief consultant will get in touch to discuss your situation and what options you have.
Go to site
I’ve signed up. What happens next?
A Certified Debt Consultant will help you design a payment program that’s affordable but also allows you to settle your debt as soon as possible. Here’s what you can typically expect to happen:
Save up for your settlement with monthly deposits. To cover the cost of the settlement and Freedom Debt Relief’s fees, your deposits go into an FDIC-insured account that you can easily monitor online. At this point, some people stop making payments to their creditors.
Freedom Debt Relief negotiates with your creditors. Once you have enough funds in your account, Freedom Debt Relief contacts your creditors to discuss a settlement arrangement. This process is delicate, tricky and can take longer than expected. It’s not uncommon for it to take several attempts before your debt is settled.
Pay your debt settlement. Freedom Debt Relief contacts you each time they reach an agreement with a creditor, asking you to authorize them to pay the settlement through your account.
Start rebuilding your credit. Debt settlement can cause your credit score to tank temporarily, though your score starts to rebuild after settlements are made.
3 tips to make debt settlement a smart financial move
Follow these pointers to make the most of Freedom Debt Relief while you’re in the program:
Stick to a budget. A budget not only ensures that you complete the program on time, but it also helps you develop healthier spending habits.
Don’t take on additional debt. If you’re in a debt settlement program, it’s likely your only options are subprime loans, which are particularly difficult to repay. Settlement isn’t much use if you get sucked into another vicious debt cycle.
Make all of your monthly deposits. The longer it takes for you to make your deposits, the more your debt balloons, thanks to interest. This is especially important if you stop making repayments to your creditors.
Freedom Debt Relief could be a last-ditch effort to avoid filing for bankruptcy. Customers have mostly positive things to say about its customer service team, but it’s faced several alarming lawsuits in the past. And many clients have complained that it look longer than expected — if it even worked at all.
Nonclients can call Freedom Debt Relief at 800-230-1553, while clients can reach the company at 800-655-6303.
Certified debt consultants are available to speak with you during the following hours:
Monday through Friday: 8 a.m. to 11 p.m. ET
Saturday and Sunday: 9 a.m. to 9 p.m. ET
Customer service representatives are available to speak with you during the following hours:
Monday through Thursday: 8 a.m. to 9 p.m. ET
Friday: 8 a.m. to 8 p.m. ET
Saturday and Sunday: 10 a.m. to 8 p.m. ET
You can also send an email to sign up for a free debt consultation at firstname.lastname@example.org. And current clients can email email@example.com with any questions.
Debt settlement in general could damage your credit score, but it can also help you rebuild your credit in the long run by clearing up some of your debts.
Whether your credit score can benefit from debt relief depends on your spending habits. If you spend recklessly after settling your debt, you’ll find yourself in the same — if not a worse — position.
Not always, unfortunately. And Freedom Debt Relief doesn’t guarantee anything when you sign up.
There’s always a chance that your creditors simply won’t agree to let you settle your debt, no matter how much your company negotiates. It’s often best to treat debt settlement as a last resort before filing for bankruptcy.
Yes, it’s possible — and former customers have complained of getting sued by their creditors. If you do find yourself facing a lawsuit, Freedom Debt Relief will bring on a third-party law firm that can negotiate on your behalf. However, things will likely get a lot more expensive.
Yes, forgiven debt over $600 is considered taxable income. However, if you’re able to prove that your debts were greater than your assets when your debt was settled, you might not have to pay taxes on it.
Speak to a tax professional to learn more about your specific situation.
Follow these steps to login to your online account with Freedom Debt Relief:
Go to the Freedom Debt Relief website and click Client Dashboard.
Enter your email and password and click Client Login.
Freedom Debt Relief Disclaimer Our estimates are based on prior results, which will vary depending on your specific enrolled creditors and your individual program terms. Not all clients are able to complete their program for various reasons, including their ability to save sufficient funds. We do not guarantee that your debts will be resolved for a specific amount or percentage or within a specific period of time. We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Our service is not available in all states and our fees may vary from state to state. Please contact a tax professional to discuss potential tax consequences of less than full balance debt resolution. Read and understand all program materials prior to enrollment. The use of debt settlement services will likely adversely affect your creditworthiness, may result in you being subject to collections or being sued by creditors or collectors and may increase the outstanding balances of your enrolled accounts due to the accrual of fees and interest. However, negotiated settlements we obtain on your behalf resolve the entire account, including all accrued fees and interest. C.P.D. Reg. No. T.S.12-03825.
Anna Serio is a trusted loans expert who's published more than 950 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like Business Insider, CNBC and the Simple Dollar feature her professional commentary, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.
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