Best Debt Relief Companies: Finding the Right Solution for You

Imagine a life without debt. Without debt, your financial future has greater possibilities. You'd be free to focus on your goals. You could set your sights on the things that matter to you, like buying your forever home, traveling the world, starting a business, retiring early, or sending your children to college.

That freedom is what people look for when they explore debt relief options. Different debt relief methods work in different ways, and with so many companies and programs that promise to help, it takes some research to find the best debt relief company.

The most popular debt relief options include debt settlement, debt consolidation, and credit counseling, and each works differently. Certain methods fit certain situations better than others, and knowing the common scam red flags makes it easier to choose with confidence.

Debt Relief and Your Options

The more you know about debt relief, the better prepared you are to choose a company that fits your needs. Here's what you need to know.

What does a debt relief company do?

The way a debt relief company works depends on what kind of relief they offer.

• Every debt relief provider is different. No two debt relief companies are identical, even if they provide similar services. Some companies provide counseling and coaching, or help you restructure your debt payments. Others negotiate with your creditors for debt forgiveness. Still others help you through the bankruptcy process.

• Not a one-size-fits-all solution. Debt relief takes various forms, like debt forgiveness, debt consolidation loans, debt management plans, and even bankruptcy. Choosing the solution that works best for you depends on how much you owe, your income, and your financial goals.

Types of debt relief and who they help

Your goal should be to select a company that provides the necessary services to meet your personal goals. This table offers a bird's-eye view of different types of debt relief.

Types of debt relief and who they help

The Best Debt Relief Options

Each debt relief method works differently.

DIY debt settlement

What it is. Do-It-Yourself (DIY) debt settlement is when you contact creditors on your own to negotiate an agreement. The goal is to clear the debt for less than the full amount you owe. The creditor agrees to forgive the rest.

Debt settlement only works for unsecured debts like credit cards, medical bills, payday loans, and unsecured personal loans. It's not an option for secured loans like car loans or mortgages.

Who it's best for. DIY debt settlement is best for those who are self-motivated and comfortable calling creditors to explain the situation. You'll probably have to call multiple times before you reach an agreement. Prepare for your creditors to play hardball. They're not in business to lose money, and they are under no obligation to cut you a break.

Impact on credit. Even if they agree to reduce your debt, creditors have the right to report that your account was settled for less than owed. That's better than a collection account. It's not as good as "paid as agreed." Settled accounts stay on your credit history for seven years. Also, if you miss debt payments because you're saving up money for settlement offers, that may also cause credit score damage. Late payments and defaults stay on your credit history for seven years.

How much it costs. There's no fee associated with negotiating on your own.

Debt settlement program

What it is. When you enter a debt settlement program the company negotiates with your creditors to reduce the total debt you owe. The goal is to settle your unsecured debts (credit cards, medical bills, and so on) for less than the full amount you owe.

You'll need money to offer your creditors. The debt settlement company sets up a program account where you make affordable monthly deposits. The monthly deposit amount could be lower than the total of all the minimum monthly payments you were making. Most people choose to stop making regular monthly payments to their creditors so they can afford to build up funds for making settlement offers.

Once there's enough money in the account, the debt settlement company makes an offer to one of your creditors for an amount that's less than what you owe. If the creditor agrees, you review and approve the agreement. Once you approve it, payment is made from your dedicated program account. The debt settlement company's fee is paid from the same account.

Who it's best for. Professional debt settlement could be an option if you want to repay your debts and genuinely can't manage the full amount. Document a financial hardship to help show you're a good fit for the program. Professional debt settlement is also a good option if you aren't comfortable negotiating with creditors on your own. A reputable debt settlement company might get better results than you would on your own, especially if it already has relationships with your creditors.

Impact on credit. If you stop paying your creditors for any reason, expect a negative impact on your credit. Late payments and delinquencies stay on your credit report for seven years, and their impact lessens during that time. Once you settle a debt, it's reported on your credit history as "settled," which is better than a collection account but less favorable than "paid as agreed." Settled accounts remain on your credit history for seven years.

How much it costs. There may be a monthly maintenance fee for the program account, similar to what banks may charge for checking accounts. For debt settlement services, each program has its own fee structure. Typical fees range from 15% to 25% of the debt enrolled in the program. For example, if you enroll $15,000 worth of debt, that works out to a fee of $2,250 to $4,200. Some debt settlement providers charge a flat fee.

You shouldn't face a situation where the negotiated settlement amount and the professional debt settlement fee add up to more than the original debt. Freedom Debt Relief offers a Program Guarantee to help prevent that. If your total program settlement cost is more than the total amount of debt you enroll in our program, we’ll refund you the difference from our collected fees, up to 100%.*

Under federal law, a professional debt settlement company can't charge you an upfront fee for services. The company may take its fee only after you and your creditor reach an agreement, you approve it, and at least one payment is made toward satisfying the agreement. The law doesn't cover the program account's monthly fee; the partner bank charges that fee separately.

Debt management plan

What it is. In a debt management plan (DMP), you're paired with a trained credit counselor who assesses your situation and works with you to create a structured repayment plan designed to fully repay your unsecured debts in three to five years.

The counselor may negotiate with creditors to waive fees or lower interest rates. You make a single monthly payment to the agency. The credit counseling agency then distributes funds to your creditors. Typically, your enrolled accounts will be closed and you’ll have to agree not to use credit cards while you're in the program. Your creditors might monitor your credit report to make sure you're sticking to that agreement.

Who it's best for. A DMP might be a good option if you can afford to fully repay your debts and you're willing to take a break from credit cards. These programs may also be a good fit for anyone who believes they would benefit from professional credit counseling.

Impact on credit. If you have to close credit card accounts that still have a balance, expect some credit score damage until you repay the balances on those closed accounts. Separately, your creditors might agree to report your late accounts as current (a process called "re-aging"). Re-aging could have a positive impact on your score.

How much it costs. Credit card companies fund nonprofit credit counseling agencies, so the cost to the consumer stays low. The one-time set-up fee for a DMP could be up to about $50 to $150, and the monthly fee typically ranges from about $25 to $75. Fees depend on where you live, how many accounts you enroll, how much debt you have, and whether you have a hardship.

DIY debt reduction

What it is. A DIY debt reduction method is a repayment plan you design and implement yourself. In short, you create a budget that prioritizes repaying debt. For example, you might adopt the debt snowball or debt avalanche payment method to laser focus on paying down your balances. Or you could devise a different plan, like paying a little more than the minimum payment and then using your annual raise or bonus to make a bigger dent in the debt once a year.

Who it's best for. DIY debt reduction is a good fit for a person who's highly motivated to reduce their debt and confident in their ability to create and stick with a repayment plan.

Impact on credit. Paying down your own debt could have a positive impact on your credit standing over time, especially if your debt is on credit cards. 

How much it costs. There's no outside cost associated with a DIY debt reduction plan.

Debt consolidation loan

What it is. A debt consolidation loan is a new loan that you use to combine and repay more than one smaller debt. Ideally, this new loan has a lower interest rate than the debts you're consolidating. It usually doesn't make good financial sense to repay a debt using a loan with a higher rate.

Debt consolidation has benefits. It could be easier to manage your finances if you reduce the number of monthly payments you have to make. If you get a lower interest rate, that could help you reduce your overall interest costs or get a lower monthly payment now. (Note that lower payments for a longer loan term could increase the total amount of interest you pay, even at a lower rate.)

Who it's best for. A debt consolidation loan could be the right choice for someone who can qualify for a new loan at an interest rate that's lower than the average rate on their current debts. You'll also need the self-discipline to avoid new debt on credit cards that you paid off with the consolidation loan. Closing your credit card accounts as soon as you repay them with the loan is one way to keep new balances from building back up.

Impact on credit. When you apply for the loan, your credit score could drop by a few points. This effect fades over the next 12 months. As long as you make all payments in full and on time, your credit score could benefit from a debt consolidation loan.

Also, when you move credit card debt to an installment loan, you could improve your debt utilization ratio. High credit card debt tends to hurt your credit score. Installment loan debt doesn't affect it the same way. This benefit depends on your ability to keep your credit card debt low after you pay off the balances with the consolidation loan. 

Closing your cards after consolidation could reduce your account age and available credit, which are both factors in your score. 

Your credit profile is yours alone, and your unique combination of factors determines what happens to your score on any given day.

How much it costs. Debt consolidation loans are installment loans, and most have lender fees. How much you'll pay depends on your credit score, the type of loan, the amount of the loan, and the lender. It's possible to get a no-fee consolidation loan, typically only if you have excellent credit.

Bankruptcy

What it is. Bankruptcy is a legal process for eliminating or repaying your debt under the protection of the bankruptcy court. The most common types of personal bankruptcy are Chapter 7 and Chapter 13. For those who are eligible for Chapter 7, you could walk away from your unsecured debts within months. You might have to give up some of the things you own. Consumers filing for Chapter 13 must repay their debt in three years (low-income) or five years (otherwise). You don't have to give up any assets in a Chapter 13 case. If you complete your payment plan, the court discharges any remaining eligible balances.

Creditors can't choose not to participate. If you include them in your case, they must comply with the court's directions. And so must you. If you file for Chapter 13, the court decides how much you have to pay every month. In a Chapter 7 bankruptcy, the court tells you what you have to give up, if anything.

Bankruptcy temporarily stops collection efforts, including mortgage foreclosure. Bankruptcy doesn't forgive your mortgage. The court gives you a chance to catch up on payments instead.

Who it's best for. If your debt is mostly or all unsecured (medical bills, credit cards, unsecured personal loans), and you don't own much or anything that the court could take, Chapter 7 bankruptcy could be the quickest way to get rid of your unsecured debt, for the lowest out-of-pocket cost.

Chapter 13 is worth considering if you need protection from creditors while you deal with your debt, and you need the court to step in.

Impact on credit. Any kind of bankruptcy is a bad mark on your credit history. Chapter 7 bankruptcy remains on your credit report for 10 years and Chapter 13 remains for seven years. As with all negative marks on your credit history, the effect lessens over time. A bankruptcy doesn't make it impossible to get credit later. 

How much it costs. The filing fee for Chapter 7 is $338 in 2026. For Chapter 13, the fee is $313. Most people want an attorney to handle their bankruptcy case, which adds $1,000 to $5,000 to the total. Statistically, people who file for bankruptcy without an attorney are less successful.

The best person to help you decide whether bankruptcy is a viable option for you is a bankruptcy attorney who practices where you live. 

Freedom Debt Relief is not a credit repair organization and does not provide or offer services or advice to repair, modify, or improve your credit.

How to Decide Which Debt Relief Company Is Right for You

Deciding how to handle debt is a big decision. Here are a few points worth considering as you determine your best move.

Debt relief type by amount you carry

Debt relief by credit score

Which options are most cost-effective?

• DIY debt reduction and DIY debt settlement don't cost anything in the way of fees. 

• A debt consolidation loan that lowers the interest rate you pay and combines higher-interest debts could lower your long-term costs, even if you pay loan fees. Or you could get immediate relief in the form of a lower monthly payment.

• A debt management plan could lower the long-term cost of your debt if your creditors agree to lower your interest rates. The tradeoff is usually a high monthly payment.

• Bankruptcy could be the fastest and most cost-effective option if you’re eligible to file for Chapter 7. You'll need to pay filing fees, and possibly attorney fees.

• Chapter 13 bankruptcy could be the most expensive path. In addition to repaying at least the lion's share of your debt, you'll also pay filing fees, possibly trustee fees, and possibly attorney fees. Chapter 13 could cost you more than the amount of your debt. It’s an option to consider if you need legal protection from creditors, not if you’re looking for the lowest out-of-pocket cost.

Warning Signs of Bad Debt Relief Companies

A legitimate debt relief company could be a lifesaver. Unfortunately, some jump into this business with the sole goal of separating you from your money. If you spot any of the following red flags, you might be getting scammed.

You're asked to pay upfront fees

Legitimate debt relief companies don't charge upfront debt settlement fees. There's a federal law prohibiting them from doing so. Freedom Debt Relief only charges a fee after they reach an agreement with your creditor, you approve it, and at least one payment has been made.

The promises are too flowery

If a company claims to have a secret method for wiping out debt, or guarantees complete debt elimination, it's probably a scam.

They apply high-pressure sales tactics

Legitimate debt relief companies don't pressure you to sign up before giving you time to consider your options carefully.

You know they're exaggerating

Some scammers claim that signing up with them will instantly improve your credit score. Over the long term, your credit score could improve as you become more financially stable, keep debt low, and pay your bills on time. That process takes time, not an overnight fix.

They don't do their research

A legitimate debt relief program reviews your credit report with you and explains which debts they could help with. It's the only way to honestly tell you if they may be able to help. Scammers may ask for a few pieces of documentation. Since their goal is to collect money from you, they don't care if they could actually help.

Signs of a Legitimate Debt Relief Company

It's possible to find a highly experienced, well-respected debt relief company. Here's what you're looking for:

• You make initial contact with them, not the other way around

• They don’t ask you for upfront debt settlement fees

• They're honest about what they may be able to do for you

• The company is BBB-accredited

• They provide you with a written agreement that outlines costs and services

• You feel free to ask as many questions as you'd like, and you receive answers that make sense

• You never feel pressured to sign up

Is Debt Relief Right for You?

If you're stuck in a cycle of overwhelming debt and missed payments, or you can't afford more than the minimum payments that barely cover interest, debt relief might be a good fit. Most people have financial ups and downs, often through no fault of their own. A path to the other side of your debt is the first step to a better financial future.

Here are three key considerations to consider in a debt relief program:

• It's affordable.

• Other people in similar situations have used the same method or program.

• Even if your credit takes a hit at first, continued participation could help you get to a place where you can work on building good credit over time.

If a professional debt settlement company seems like a good option, consider how long they've been in business and how successful they've been in helping others. For example, Freedom Debt Relief has been in operation since 2002. In that time, we've served more than a million clients and settled $20B (yes, billion) in debt across more than four million accounts.**

Some terrific debt relief companies exist. Choose a company with a proven record of helping people like you find the freedom they seek.

Next Steps

If you're ready to find financial freedom, Freedom Debt Relief makes it easy to start. Here's what you could expect:

• You'll talk with a debt consultant to discuss your needs and goals.

• Our debt experts review your information and explain suitable debt options.

• You'll select the option that works best for you.

You'll be on your way to financial freedom.

*The Freedom Debt Relief program guarantee takes effect when you graduate the program, or even if you leave before graduating. When you exit the program, we'll use the combined total of all the debts you enrolled and settled and the fees you paid to us to calculate your eligibility for a refund.

**Statistics reflect the results of the members we and our affiliates have served since 2002 (as of August 2026).