Frequently Asked Questions
If you don’t see the answer you’re looking for, please call us at 800-910-0065
Frequently Asked Questions
If you don’t see the answer you’re looking for, please call us at 800-910-0065
No. Freedom Debt Relief is a legitimate company that has helped tens of thousands of clients since we started in 2002. We are a founding member of the American Fair Credit Council (AFCC) and a platinum member of the International Association of Professional Debt Arbitrators. Every day, our dedicated employees carry out our mission to help people solve their debt problems — even if the solution they choose isn’t Freedom Debt Relief. Learn more about our commitment to integrity and our accreditations.
Our goal is to help you get out of debt as fast as possible by negotiating with your creditors to get them to accept significantly less than face value on your unsecured debts. Depending on the condition of your credit report at the time of enrollment, any debt settlement or debt negotiation program, including ours, could negatively affect your credit. Negative information could remain on your credit report for up to seven years. By engaging in good credit behavior, anyone’s credit score could recover over time. Results vary depending on your payment history, credit utilization, length of credit history, and debt-to-income ratio.
If getting out of debt is more important to you than the likelihood that your score will be negatively impacted, our program could help you resolve your debt faster and for less—without declaring bankruptcy.
Our program is focused on dealing with unsecured debts (credit cards, medical bills, unsecured personal loans, etc.). We can’t help with debt that is secured by collateral (such as mortgages or auto loans). However, after completing the program, the money you had been paying towards your unsecured creditors can be used to pay down secured debts and start saving for your financial future. Not everyone completes our program, so remember that sticking to your monthly savings plan is the most important factor in determining your success.
There are federal and state laws designed to protect you from collections harassment, but the fact is most of our clients will experience some collections calls. Our goal is to get your creditors to call Freedom Debt Relief, not you. Find out more about laws that regulate debt collector behavior and what your rights are.
No. Every case is a negotiation, and there is no guarantee as to how those negotiations will go. Furthermore, the success of our negotiations is highly dependent on your ability to save a specified amount each month you are in the program.
The percentage you can settle your debt for depends on your creditor, how much you owe, which state you live in, and many other factors. With over 15 years of experience in debt settlement, Freedom Debt Relief could settle your debt for as little as 50% of the amount you owe or in some cases even less. It is important to note that every creditor is different and the amount they will settle for can vary.
When you settle one of your debts, your creditor will update the status of your account to Settled, or some variation thereof.This status could stay on your credit report for up to seven years. Having an account settled has less of a credit impact than having an account with the status of Unpaid, but both are considered negative marks to your credit. However, by engaging in positive credit behavior over time, you may be able to improve your credit standing.
Yes! Freedom Debt Relief is committed to providing excellent service to our clients while we help them resolve their debt. Over 600,000 people have enrolled in our debt settlement program, so we must be doing something right. You can find reviews and success stories from clients we’ve helped overcome debt. But don’t just take our word for it: thousands of our clients have left glowing reviews of us on websites like TrustPilot and Consumer Affairs.
In our program, clients pay no fees whatsoever until a debt is negotiated. You will know when fees are charged because you will approve every deal. Once we reach a settlement with a creditor, we immediately contact you for authorization. After you authorize the settlement, the fee associated with the debt is processed. All fees associated with the program are included in the monthly savings quoted to you by a debt consultant. Our fees usually range from 15% to 25%, but your rate may vary depending on your state of residency.
Although it is possible to try to settle credit card debt if you are still current, it is unlikely that many creditors will be willing to accept less than the full amount owed if your payments are up to date.
Whether you settle your debt on your own or work with a debt settlement company like Freedom Debt Relief, the most effective way to get creditors to negotiate is by showing them you are unable to pay your debt in full due to a financial hardship. Letting your payments go into default is a good way to do this. Once your creditors understand that you are unable to pay in full, they are more likely to accept a reduced amount as settlement.
The type of debt relief Freedom Debt Relief offers is known by several names: debt resolution, debt negotiation, and debt settlement. Debt relief allows you to resolve your unsecured debt by negotiating with creditors and reducing the amount you owe. You could negotiate with your creditors on your own or use a debt relief program like Freedom Debt Relief to help you settle your debt.
During the debt relief process, you usually stop paying your creditors and start saving money in a special purpose account you will use to settle your debt. Once enough money is saved, either you or the debt relief company you hired contacts your creditors to negotiate a new debt amount that is lower than you currently owe.
Freedom Debt Relief is the largest debt negotiator in the U.S. We offer our debt relief program to Americans with $7,500 or more in unsecured debt—including credit card debt, personal loan debt, and medical debt—who are experiencing a legitimate financial hardship.
The Freedom Debt Relief program is designed to resolve your debt for significantly less than you owe as quickly as possible. First, we provide a debt evaluation to help you decide if our program is right for you. If you decide that it is, we work with you to design a program that fits your monthly budget (keep in mind that it could be less than your monthly minimum payments). Once you enroll, our expert negotiators create a negotiation strategy designed to get you the results you want. Our company has used this method to resolve over $9 billion in debt since 2002. That’s much more than any other debt relief company in the industry.
Freedom Debt Relief could help you with debt from credit cards, medical bills, department store cards, and many other types of unsecured debt. Our program cannot help with a debt that involves collateral (like auto loans and mortgages). Also, we cannot resolve federal student loans. We do help with private student loans and some business debts on a case-by-case basis.
We approach everything we do with integrity, but sadly not all debt relief services have the same commitment to ethics we have. That’s why we encourage you to research every company you are considering before you commit to any debt relief program. As a founder of the American Fair Credit Council, Freedom Debt Relief has been involved in establishing industry standards that protect consumers from abusive debt settlement practices. We are a legitimate debt relief service that has helped tens of thousands of people resolve debt.
We recommend looking for debt relief programs that are transparent about the types of debt they accept, give a realistic timeline, and a realistic estimate of your potential savings. Additionally, debt relief companies are legally not allowed to charge fees until after a debt has been settled. We recommend you view the Federal Trade Commission’s advice.
If you plan to settle your debt on your own or through a debt settlement company, you may be required to stop making payments to your creditors. When you stop paying your creditors, there’s a chance that they may sue you in an attempt to collect what you owe them.
This is why Freedom Debt Relief offers its clients an optional subscription to the National Litigation Law Group (NLLG) when they enroll. Any client who opts for this service will get legal representation in the event that a creditor takes legal action against them.
If you have modest income and few personal assets, creditors may be less likely to sue you.
No, our debt reduction program is not a new loan. Some of our clients use a loan in conjunction with the Freedom Debt Relief program, but most fund their settlements with a monthly deposit into their Dedicated Account. That being said, we do have a relationship with a lending company. And some clients, who demonstrate a consistent pattern of saving their monthly draft amount on time, may be eligible for a loan from this lender to pay off one or more of their settlements. But this is not something that is required of any Freedom Debt Relief client.
If you have one card with a low balance that you can quickly pay down to zero, then you may hold on to it for emergencies. The program will generally not work, however, unless you enroll all of your high balance (greater than $500) credit card accounts. Open credit cards make it difficult for us to negotiate with your creditors if they see you are settling on some accounts but not others.
You do. The bank account is set up in your name, and the money in the account is yours. We recommend keeping your funds in a new account, separate from your existing bank accounts because experience has shown this separation to dramatically increase the probability that you will succeed in the program. Freedom Debt Relief fees are deducted from this account on a debt-by-debt basis and only after each debt is settled, as indicated in the agreement you signed with us. But you still own the accumulated savings in the account.
The IRS considers a forgiven debt as taxable income, so at the end of the year they will expect taxes to be paid on the settlement. IRS Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, may exempt you from this tax. Please contact a tax adviser to discuss this issue further.
If you let your accounts become delinquent, your creditors will continue to add interest and late fees onto your balances. Typically, your balance will increase until a settlement is reached. Keep in mind that the interest is going to accrue regardless of whether you make minimum payments or not. Our goal is to negotiate substantial reductions to the balances on your accounts, even after the interest and late fees have accrued. When you work with Freedom Debt Relief, additional fees and interest that your creditor may charge is included in your estimate. Even if your creditor charges extra fees and interest, the fee we collect to settle the debt will not increase.
Yes you can. You can also do your own taxes and repair your own car, but most people would rather leave these tasks to experienced professionals. The Freedom Debt Relief team of negotiation specialists resolve over $288 million in debt each month. Our knowledge and experience puts us in a strong position to stand up to your creditors and fight for the best settlement possible.
Negotiation activity is typically very limited until you have saved up enough in your settlement account to make reasonable offers to your creditors. Most (but not all) creditors do not want to spend time negotiating an account unless they know there are funds available. The first settlement typically happens between months four and six of a client’s program, but this varies greatly depending on your monthly deposit amount, the number of creditors you have enrolled in the program, and the balance of each individual account. In some instances, it may take more than six months before the first settlement is reached.
Creditors do have the right to send debts to collection agencies and/or law firms to collect a debt. In our experience, lawsuits are actually only filed on a small percentage of enrolled debts. If this happens to you, we established a relationship with a third-party service from a law firm that can negotiate with the goal of resolving the debt. Note that the settlement percentages associated with settlement of debts in litigation are often higher than typical non-legal settlements. Please note that we are not a law firm and cannot provide legal advice or legal representation.