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Debt relief resources in Virginia

A new law will make it easier to find a legit service — but it takes effect in July 2021.

Virginia currently doesn't have many regulations specifically for debt relief companies — though a recently passed law will change that on July 1, 2021 when it goes into effect. If you're considering a debt relief service, make sure you understand what you're signing up for.

Compare debt relief companies available in Virginia

Use this table to compare debt relief companies available to Virginia residents.

Name Product Costs Requirements
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.
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.
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.

Compare up to 4 providers

Debt relief regulations in Virginia

Credit counseling companies are required to have a license to operate in Virginia. Debt settlement companies, however, weren't regulated in Virginia until April 2020. A new law that requires debt settlement companies to have a license will go into effect on July 1, 2021. Other regulations that will go into effect on the same date include:

Fee caps

Debt settlement companies can charge fees in two ways. They can charge up to 20% of enrolled debt, or they can charge a fee of up to 30% of the difference between the enrolled debt at the time of settlement and the amount you pay to your creditors. All other fees are prohibited.

Let's take a look at an example.Say you have $30,000 enrolled at the time the company settles your debt. A company can charge up to 20% of that amount, which would be $6,000. But if it negotiates the debt down to $17,000, it can charge up to 30% of the difference between $30,000 and $17,000 — which is equal to $13,000. This gives you a fee of up to $3,900.

Timing of fees

Debt settlement companies can't charge fees upfront. They must wait until a company has altered the terms of at least one debt enrolled in the program and the customer has made at least one payment to their creditors under the newly negotiated terms.

In other words, companies don't need to settle the debt to charge a fee, but they must at least successfully change the terms of the agreement with your creditor.


Before you sign up for debt settlement, the company must disclose the following information in writing:

  • Estimate of the length of the program
  • Estimate of how long it will take to give each creditor an offer
  • How much you need to save before the company can can make a settlement offer

It also must include a statement explaining the risks. These include the fact that debt settlement will likely hurt your credit, can result in having your debt sent to collections or a lawsuit. And that it can increase how much you owe due to unpaid fees and interest.


Debt settlement usually involves opening a trust account, where you make monthly deposits. It's also what the company uses to withdraw payment to creditors and service fees.

Under the new Virginia law, these accounts must be held at an FDIC-insured financial institution and cannot be owned or compensated by the debt settlement company. The customer must be able to withdraw from the account without penalty and have access to all funds in the account, minus the debt settlement fee.

Debt settlement agreement

Companies are required to give customers a written agreement that contains:

  • Names and addresses of both the customer and the company
  • Description of the services
  • Clear explanation of costs, highlighted and in bold type
  • Statement that the consumer can end the agreement at any time without penalty
  • Explanation of how disputes with the company will be resolved
  • Explanation of consumer and debt settlement company obligations
  • Notification of privacy policies

These new regulations only apply to companies offering debt settlement, or debt negotiation, which involves negotiating down your balance in exchange for a one-time payment. Other types of debt relief companies that just provide debt management plans or credit counseling are exempt.

Debt solutions

There are several options available to Virginia residents struggling with debt.

  • Debt consolidation. This involves taking out a low-rate personal loan or balance transfer credit card to pay off your creditors. If you owe less than half your annual income and have good credit, this might be all you need to get out of debt.
  • Credit counseling. When debt consolidation isn't on the table, sign up for credit counseling at a licensed agency to go over your finances and come up with a plan to get out of debt. Often, this service is free or costs under $50.
  • Debt management. A credit counselor might recommend debt management after your financial assessment, which involves hiring the agency to negotiate your rates and terms to better fit your budget while you continue to make repayments.
  • Debt settlement. As a last resort, you can hire a company to negotiate down your balances in exchange for a one-time payment, usually over two to four years.
  • DIY negotiations. Rather than hiring a company to negotiate on your behalf, you can call your creditors yourself and explain the situation.
  • Bankruptcy. Filing for bankruptcy can clear your accounts or give you a court-mandated payment plan that meets your current budget.

How to find a legit debt relief company

If you're considering credit counseling or debt management, make sure the credit counseling agency is licensed in Virginia before you sign up. You can do this by searching Virginia's list of licensed credit counseling agencies.

With debt relief, you'll have to do a little more research to make sure a company isn't a scam until July 2021.

  • Federal Trade Commission (FTC) bans. The FTC has a list of companies and individuals that have been banned from debt relief. Make sure the company and the owners aren't listed. Sometimes companies get shut down and the owners try to open up a new business elsewhere.
  • Government actions and lawsuits. Look for any legal actions that regulators or individuals have take against the company and its owners and read them — or news articles about them. You can often find these on the company's Better Business Bureau page.
  • Accreditation. Most legitimate debt relief companies are accredited by the American Fair Credit Counsel (AFCC) and International Association of Professional Debt Arbitrators (IAPDA). Search for accreditation on the AFCC and IAPDA website, not the company's site.
  • Transparency. Even if it's not legally required, a debt relief company should be upfront about the risks and costs of using the service. Ideally, go with a company that's already providing the information it will soon be legally required to disclose by Virginia law.

Virginia debt statistics

The average Virginia resident is struggling with debt. The median DTI for Virginia residents in 2019 was 1.8, according to the Federal Reserve. That means that Virginians owe 1.8 times more each month than they earn.

Virginians owed $66,140 per capita at the end of 2019, according to another Federal Reserve study. Here's how that broke down:

  • Auto loans. Virginians owed $4,900 in car loans per capita and 3.93% of car loan accounts were over 90 days delinquent.
  • Credit card debt. Virginians had $4,000 in credit card debt per capita. Some 6.57% of credit card accounts were over 90 days delinquent.
  • Mortgages. Virginians owed the most in mortgages, with $47,810 per capita. But only 0.68% of these accounts were over 90 days delinquent.
  • Student loans. Virginia residents owed $6,050 in student debt per capita. And a whopping 10.34% of these accounts were over 90 days delinquent.

Bottom line

Finding a legitimate debt relief company in Virginia will be a lot easier once new debt settlement regulations go into effect on July 1, 2021. While credit counseling agencies are legally required to be licensed, you'll have to vet debt settlement companies yourself.

Read about our top picks for debt relief providers to learn more about your options.

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