Frequently Asked Questions

Find answers to commonly asked questions, so you can feel confident taking action to resolve your debt.

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What you should know

What is debt relief?

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 (debt that is not backed by collateral like a car or a house; most often credit card 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 voluntarily stop paying your creditors and start saving money in a special purpose account (what Freedom Debt Relief calls your 'dedicated account') that is used to hold the funds used to settle your debt. Once enough money is saved into this account, the debt relief company you hired contacts your creditors to negotiate a debt settlement amount that is lower than what you currently owe.

What is Freedom Debt Relief?

Freedom Debt Relief is the largest debt negotiator in the U.S. We offer our debt relief program to Americans with unsecured debt (debt that is not backed by collateral like a car or a house)—including credit card debt, personal loan debt, and medical debt—and are experiencing a legitimate financial hardship.

How does Freedom Debt Relief work?

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 consultation to review various options you have for debt management (including credit counseling, bankruptcy, and consolidation loan), and help you decide if debt relief and our program specifically 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 debt negotiators create a negotiation strategy, utilizing data that has been developed over 20 years, so that we can reduce your debt and help get rid of your debt as quickly as possible. Our company has used this method to resolve over $18 billion in debt since 2002.

What types of debt can Freedom Debt Relief help me with?

Freedom Debt Relief could help you with debt from credit cards, medical bills, department store cards, and many other types of unsecured debt (debt that is not backed by collateral like a car or a house). Our program cannot help with secured debt, which is 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.

How does debt relief affect my credit score?

The impact a debt relief solution has to your credit score depends on the specific information found on your credit report at the time of enrollment, and how the specific information found on your credit report changes while in the program.  Your credit report can be affected by the settlements you experienced while in the program (including how creditors report the information to the CRAs) as well as your credit behavior while in the program.

Depending on your existing credit score, in the debt settlement process you will likely see your credit score drop.

However, a key factor of your financial health is your debt-to-income ratio. As debts are settled, your total debt should decrease, thereby improving your debt-to-income ratio.

How much does debt relief cost?

Across the industry, debt relief costs vary and are usually a percentage of the original amount of your debt or a percentage of the amount you've agreed to pay with the settlement. 

Freedom Debt Relief’s fee ranges between 15% to 25% of enrolled debt (the amount of debt enrolled to be settled)–your rate may vary depending on your state of residency and amount you enroll. 

In our program, clients pay FDR no fee whatsoever until a debt is negotiated, the settlement has been approved and the first payment has been made. You will know when a fee is charged because you will approve every settlement deal. Once we reach a settlement with a creditor, we immediately contact you for authorization. After you authorize a settlement and a payment has been made to your creditor, the fee associated with the debt is processed. The total fee associated with the program is included in the monthly savings quoted to you by a debt consultant.

When does Freedom Debt Relief collect customer fees?

FDR does not charge any upfront fees and only collects its fees after a settlement is authorized by the client and the first payment is made.

This fee amount is disclosed in full upfront and will never increase.

Note: As part of your debt settlement program, you open up a dedicated account with Crossroads Financial Technologies (CFT) to accumulate your settlement funds. You own this dedicated account and all funds in it. CFT collects fees for setting up and maintaining the dedicated account, and may also charge fees to make payments from the dedicated account. There is a one-time fee of $9.95 to set up the dedicated account, and a monthly fee of $9.95 that covers account servicing. Freedom Debt Relief does not share or receive any part of the fees paid to CFT.

How is Freedom Debt Relief different from other debt relief options?

Freedom Debt Relief is an established leader in debt resolution. Since 2002, over 1 million clients have been served by the Freedom Debt Relief program. We have resolved over $18 billion in debt. We have a team of committed experts working on your side: 500+ certified debt consultants, 200+ debt negotiators, and 300+ customer service representatives. We are an established employer with 1,300+ US employees in AZ, CA, and TX. 

Lastly, Freedom Debt Relief formally has a promise to customers in place to ensure that we deliver results to our customers. This promise is called the Freedom Debt Relief Promise and it assures that: 1. Each prospective customer has an opportunity to learn about their debt relief options, even those beyond our services. 2. Each customer receives a personalized assessment and recommendation of the course of action that offers the best opportunity for consumers to achieve their financial goals.  3. Each customer is fully informed at each step of the process. 4. Each customer has a Program Guarantee that Freedom Debt Relief succeeds only when our customers succeed. In addition to only charging fees when FDR delivers settlements, the Program Guarantee states that when a customer graduates or leaves the program, FDR will refund fees if their settlement and fees are more than the amount they originally owed when they enrolled in the program.

What is the difference between credit counseling, debt settlement and bankruptcy?

  • Credit counseling can help you learn to budget and stop overspending. Counselors can enroll you in a debt management plan where they typically lower your interest rates and set up a payment schedule, to simplify debt repayment and make it more affordable. Credit counselors control your (the consumer’s) money and when/how the money is distributed to the creditors. 

  • Debt settlement means convincing your creditors to accept less than you owe as payment in full. They may be willing to do so if you cannot afford to repay the full amount. With debt settlement, and specifically Freedom Debt Relief, you the consumer approve all actions by Freedom Debt Relief - i.e. Freedom Debt Relief does not control your money and when/how the money is distributed to creditors - everything must be approved by you, the consumer. 

  • Bankruptcy is a court-ordered plan in which you either surrender assets or pay into a plan to discharge some or all of your debts. 

  • Learn much more from this article about the differences between credit counseling, debt settlement and bankruptcy

Can I withdraw money from my dedicated account with Freedom Debt Relief?

Yes, you may withdraw from your Dedicated Account, which you control, at any time. This is an FDIC-insured account, and you control it, not Freedom Debt Relief, meaning you can withdraw from it at any time. However, FDR advises against withdrawing from your account as it prevents you from being able to make your monthly deposits, which in turn slows down your progress towards your settlement timeframe.

Does Freedom Debt Relief offer loans?

Freedom Debt Relief does not itself offer loan products. We can refer you to our affiliate companies that offer personal loans and home equity loans. We always take your unique financial situation into account, and will recommend alternative solutions that you may qualify for, that may meet your needs.

What benefits can I expect from Freedom Debt Relief?

Freedom Debt Relief has various benefits in place to assure that customers are placed at the center of everything we do, and that Freedom Debt Relief is the solution recommended only when it is truly the best fit for the customer’s needs and circumstances.  

These benefits are in place with the Freedom Debt Relief Promise, which has four components in total that help assure that 1. You (the customer) can make informed decisions, with a free debt consultation; 2. You will be set up for success, with a free financial assessment that includes cash flow analysis; 3. You won’t be surprised, with clear terms and our commitment to transparency;  and 4. You will get results, with our Program Guarantee* that states 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, up to 100% of our collected fees.* 

Another benefit is our partnership with a network of attorneys, the Legal Partner Network, that specializes in debt negotiation. The cost of the Legal Partner Network service is included in your program and will be available to you as long as you make all your deposits on time and in the full amount. For more information, please see question:“What do I do if my creditor takes legal actions?” 

Lastly, Freedom Debt Relief provides complimentary tools and guidance to help customers succeed including an online dashboard for clients, with access 24/7 and the ability to chat with Customer Service 7 days a week. In the dashboard, clients can access various videos and articles to grow your financial skills.   

*For purposes of this settlement fee refund, your “FDR program settlement costs” are (a) the total amount you paid to your creditors through your FDR program, plus (b) the total settlement fees paid to us as described in Subsection 5.a. (excluding any other fees, costs or taxes you may incur).

In the event you charge, draw, or take advances on a debt after enrollment, that debt, and any FDR program settlement costs associated with that debt, will not be considered for purposes of this settlement fee refund.

Will I be totally debt free when I'm done?

Our program is focused on dealing with unsecured debts (debts that are not backed by collateral such as debt from credit cards, medical bills, and 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

Will debt collectors call me?

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. To help, we offer tools and guidance on how to handle those interactions. Learn more about laws that regulate debt collector behavior.

What do I do if my creditor takes legal action?

Creditors may attempt to collect on enrolled debts by taking legal action. While we (FDR) are not lawyers or licensed to practice law, we want to make sure that if any enrolled accounts go into litigation, the debt can still be negotiated.

We’ve partnered with a network of attorneys, the Legal Partner Network, that specializes in debt negotiation. If any enrolled creditor files a lawsuit against a client, we may engage a Legal Partner Network attorney who will attempt to negotiate a settlement with the creditor.

The focus of the attorney is to try to get the creditor to settle the lawsuit and resolve the debt. The attorney will not represent the client in court or file paperwork.

The cost of the Legal Partner Network service is included in the program (without any subscription or service fees) and will be available to the client as long as they make all of their deposits on time and in the full amount.

Is Freedom Debt Relief a legitimate company?

There are bad actors in the category of debt settlement, and we understand people's concerns around debt relief programs potentially being a scam. 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 challenges and move their finances forward — even if the solution they choose isn't Freedom Debt Relief. We refer people to other solutions (like credit counseling, bankruptcy, consolidation loans, and HELOC) if we believe the clients' needs are better met with other solutions. Learn more about our commitment to integrity and our accreditations.

Does Freedom Debt Relief start negotiating with my creditors right away?

Negotiation activity is typically very limited until you have saved up enough in your settlement account (also referred to as 'dedicated 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. Over 60% of clients get their first debt settled in the first 3 months of enrollment. In some instances, it may take more than six months before the first settlement is reached.

How long does Freedom Debt Relief take?

The Freedom Debt Relief program is unique to each client. The program length for Freedom Debt Relief customers is on average 24-48 months.* The length of time that a client is enrolled depends on many factors, like the amount of debt they have, who their creditors are, and the amount the client is able to save/deposit every month, as well as the consistency of those deposits. The Freedom Debt Relief team works with each client to build a program and schedule that fits their specific needs.

Who is eligible for Freedom Debt Relief?

Freedom Debt Relief helps consumers that have experienced a hardship (such as job loss, reduced income, unexpected expenses, medical, and divorce) and are struggling with unsecured debts, including credit cards, medical, department store and personal loan debts.

When should you consider debt relief?

Consumers should consider debt relief if they have recently gone through a hardship and are struggling to make minimum payments or can make payments but still can't seem to make a dent in the debt. In many cases, debt settlement is a good alternative to a loan or bankruptcy, or credit counseling.

How do you cancel Freedom Debt Relief?

Should you decide to cancel your FDR program, you can do so at any time without penalty.  You may terminate your Agreement by providing us with written notice of termination (which may be electronic).

Any funds that may remain in your Dedicated Account, minus fees for services already provided, shall be returned to you within seven (7) business days.

Is debt consolidation good or bad?

Debt consolidation is an option to help manage your debt. With a debt consolidation loan, you consolidate multiple payments to multiple creditors into one monthly payment. But, it does not reduce the amount you owe. If you want to resolve your debt faster and for less than making your minimum payments, debt settlement might be a better option for you than a debt consolidation loan.

Are debt settlement companies a good option?

Debt resolution is a good option for dealing with debt as you can resolve your debt for less than you owe and in less time than making minimum payments. But that doesn't mean all debt settlement companies are created equal. Freedom Debt Relief has been around for 20 years and has negotiated over $18 Billion in consumer debt helping more than 1 million consumers get rid of debt.

Who does Freedom Debt Relief negotiate with to settle my debts?

We may negotiate, directly or through a representative, with a variety of different entities to settle your debts. These entities include the original creditor, the current creditor, or any other entity that may hold a debt, including any of their agents, attorneys, or third-party collectors. The term "creditor" means any and all such entities with which we may negotiate, directly or through our representative, a settlement of your debts. Notwithstanding the foregoing, we make no representation about our ability to negotiate with any specific creditor entity and make no representation about whether any specific creditor entity will negotiate directly with us.

What happens if a creditor insists that I be involved in negotiations?

In some instances, we may ask that you participate in negotiations with one or more of your creditors. This participation may involve you joining one of our negotiators or representatives in communications with a creditor or, possibly, you communicating with a creditor directly. You are not required to participate in such negotiations. If you choose not to participate, we will discuss with you alternative strategies for settling that debt. You may request that we continue attempts to negotiate a settlement of the debt without your participation. You may also withdraw that debt from your program at any time before it is settled with no charge or penalty to you. If you withdraw a debt, we will continue our efforts to settle any remaining debts in your program.

If we do ask for your participation in negotiations with your creditors, and you agree to participate, we will advise you throughout the process, and we will charge our settlement fee, as described in your Debt Resolution Agreement.

How do I cancel my Freedom Debt Relief program?

You may terminate this Agreement and withdraw from your debt resolution program at any time, without any termination fee or other penalty. Upon withdrawal or termination from your debt settlement program, you are entitled to receive all remaining funds in your Dedicated Account other than the amount of settlement fees earned by us or fees earned by your bank or payment processor. You may withdraw from your debt resolution program by providing us with written notice of termination (which may be electronic).

We must receive your notice of termination at least three (3) business days prior to any scheduled electronic funds transfer in order to cancel the next deposit to your Dedicated Account from your bank. Subject to our verification of your identity, we may, in our sole discretion, accept a verbal termination notice. All authorizations to communicate with your creditors and any other authorizations we may have to act on your behalf will be revoked and will become ineffective immediately upon termination.

In the event that you fail to make any deposit or any payment required by this Agreement or otherwise fail to discharge any of your responsibilities and undertakings, we have the right to immediately terminate this Agreement, without any further obligation of any sort.

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