Freedom Debt Relief review

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While customers have mostly good things to say, it's faced a few lawsuits in the past.

Bottom line: This well-known debt settlement company has some of the lowest starting fees out there. But it’s unclear how many customers finish the program — or actually see savings.

$7,500 in unsecured debt.

Minimum debt

24 to 48 months

Typical turnaround

None at time of enrollment.

Fees

Freedom Debt Relief details

Free quote or consultationYes
ServicesDebt relief using direct negotiation with creditors.
Minimum debt$7,500 in unsecured debt.
Typical turnaround24 to 48 months
Direct or third-party negotiationsDirect
FeesNone at time of enrollment.
Types of debt Credit card debt, medical bills, other unsecured debt. Private student loans and business loans may be eligible on a case-by-case basis.
AccreditationsAFCC, IAPDA
RatingsB BBB rating, 4.6 Trustpilot rating.
Free resources or toolsEstimated savings calculator, options beyond debt settlement, online client dashboard.
Customer servicePhone, email, and text.
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Pros

  • Positive reviews of customer service
  • Easy-to-use online dashboard
  • Founding member of the American Fair Credit Council

Cons

  • May take longer than expected
  • Debt settlement not guaranteed
  • Only available in 38 states
  • History of misconduct

Review by


Anna Serio is a trusted lending expert and certified Commercial Loan Officer who's published more than 1,000 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.

Expert review

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 lawsuits in the past. And clients have complained that it look longer than expected — if it even worked at all.

Before signing up, compare more debt relief companies.

What is Freedom Debt Relief and is it legit?

Freedom Debt Relief is a debt settlement company that helps 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 creating the standards for the debt settlement industry. It’s a member of the American Fair Credit Council (AFCC) or International Association of Professional Debt Arbitrators (IAPDA), which are trade organizations that set standards for the debt relief industry.

But regulators have taken action against the company multiple times over its business relief practices.

Freedom Debt Relief lawsuits

Freedom Debt Relief has faced at least three lawsuits over the past 10 years.

CFPB lawsuit

The Consumer Financial Protection Bureau (CFPB) filed a suit against Freedom in 2017, accusing the company 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. Freedom also did not clearly disclose to customers that had the right to the money they had set aside for settlement if they withdrew from Freedom’s program, according to the 2017 suit.

In response, the company implemented widespread consumer process and disclosure changes
during and post the CFPB lawsuit.

New York lawsuit

Freedom Debt Relief settled a lawsuit with the State of New York in 2020 over how the company advertises savings. New York sued the company because it failed to disclose what percentage of customers actually finish the program with a reduced balance when it advertised potential savings.

Washington State also sued Freedom Debt Relief for charging customers fees but then failing to contact their creditors. The company agreed to a settlement in 2010.

Freedom Debt Relief reviews and complaints

BBB accreditedNo
BBB ratingB
BBB customer reviews4.6 out of 5 stars, based on 3330 customer reviews
Trustpilot score4.6 out of 5 stars, based on 31,942 customer reviews
Customer reviews verified as of09 January 2021

Freedom Debt Relief gets mostly positive online reviews from customers. However, many are from customers who have recently signed up — rather than those who have completed the program. A top complaint is that the program took longer than expected — or may not have worked at all. Be sure to consider how debt relief could impact your long-term finances before you sign up.

How does Freedom Debt relief work?

Freedom Debt Relief ultimately works by negotiating down your balances in exchange for a one-time payment. Here’s how this typically happens:

  • Get a consultation. Meet with a debt specialist to make sure you’re eligible for the program and learn how to enroll.
  • 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.
  • 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.

How much does it cost?

Freedom Debt Relief charges a fee of 15% to 25% of the debt you enroll in the program. You must enroll $7,500 at a minimum — though the average customer enrolls $24,000. This works out to a fee of $3,600 to $6,000 on the average customer’s balance.

But the cost can be higher if you don’t make payments on your debt. If you stop repayments, interest and late fees will add up and increase your balance.

How much could I save with Freedom Debt Relief?

Customers can save up to 50% of their enrolled debt if they complete the program, according to the Freedom Debt Relief website. After fees, this works out to a savings of 25% to 35%.

Savings are calculated at the time that your account is settled. If you stopped making payments to your creditors, you won’t see as much in savings. And in some cases, you could end up owing more. People who drop out of the program also often end up owing more than they originally enrolled.

Read our guide on getting out of debt

Freedom Debt Relief’s history of lawsuits means you may want to consider other debt relief companies. You should also learn about your other options with our guide to debt consolidation.

Compare debt relief companies

Use the table below to see how Freedom Debt Relief’s pricing and requirements stack up to other providers.

Name Product Costs Requirements
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 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.
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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.

Frequently asked questions

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