Is Your Debt Relief Company Legit?

It’s no secret that debt is a major problem for millions of people. As interest rates rise and living costs escalate, more Americans are looking for help in managing their debt. 

If you’re one of them, you may have heard that debt relief companies can offer lower payments and help resolve your debt. A part of you hopes the claims are true, but there’s also probably a part of you that’s skeptical—and that’s a good thing. You owe it to yourself to get educated about debt relief, an often-misunderstood solution that helps thousands of clients put debt behind them. 

Is debt relief legit? We’ll help you answer that question.

What Is a Debt Relief Company?

Part of the confusion is that the term “debt relief” can mean different things. For Freedom Debt Relief specifically, it means debt settlement (also known as debt negotiation or debt resolution). Our debt settlement program can be an effective alternative to other debt solutions like:

• Credit counseling

• Debt consolidation

• Bankruptcy

Once a client enrolls in our debt relief program, we negotiate directly with their creditors to reduce their debt as much as possible. Debt settlement is an appropriate strategy for unsecured (primarily credit card) debts. By reducing how much they owe, we can usually help clients who with $7,500 or more in eligible debt resolve it in as little as 2-5 years.

You should also be aware that enrolling in a debt settlement program can have a negative impact on your credit score, trigger calls by collection agencies, and sometimes expose you to legal action. Every debt relief option has its pros and cons, and it’s important to be transparent about both.

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Not All Debt Relief Companies Have Your Best Interests at Heart

Before you entrust your financial future to a debt relief company, it’s extremely important to be confident that you’ll be working with a credible provider. In 2010, after a boom in the industry, some debt relief companies weren't acting in their clients’ best interests. The Federal Trade Commission (FTC) stepped in to implement stronger regulations to protect consumers. Also during this time, the American Association for Debt Resolution (AADR) formed as a trade association to ensure compliance and transparency.

As a result of these changes, many less-credible debt relief companies left the industry. But there are still some bad apples. Protect yourself by doing your research before hiring a debt settlement provider. If you have questions, any company should be open and happy to give you the answers you seek. 

If a company avoids answering your questions, consider that your first red flag that the debt relief company may not be legit.

Is Your Debt Relief Company Legit?

A debt relief company that’s legit may be worth working with for many reasons. It’s important to find the right one. 

In the course of your research, beware of the following red flags. Any of these may be a sign of a company that does not have your best interests at heart. 

Watch out for companies that:

• Charge fees before they settle debt. FTC rules prohibit a debt relief company from collecting any fees until after it has negotiated a settlement and the customer has accepted it. 

• Promise to settle all of your debts for a single reduction. The debt settlement process involves negotiating each debt with each creditor. Depending on the amount, the creditor, and the individual situation, each settlement may be different.

• Tout a “government program” to erase credit card debt. No such programs exist.

• “Guarantee” they’ll make all your debt go away. As with many things in life, there are no guarantees. A debt relief company that’s legit has the motivation to work hard and get the best results possible for clients. In talking with a company, ask about the results it has obtained for previous clients.

• Claim they can stop all debt collection calls and lawsuits. They can’t. In a debt settlement program, most clients let their credit accounts go past-due. That allows the client to set aside money for making settlement offers. It also sends a distress signal to the creditor. Creditors may respond by calling frequently, or even threatening (or filing) lawsuits. Legitimate debt relief companies guide you through the process and help you with any issues or concerns.

• Tell you to stop communicating with creditors. Stopping all communications may not always be in your best interest. A debt relief company that’s legit leaves that decision to you, offering tools and advice on asking creditors to communicate only with the debt relief company.

• Have vague (or no) answers to your questions. Reputable debt settlement businesses are upfront about fees, counsel you on the possible challenges of the process, and tell you how long the process might take.

• Call you repeatedly to pressure you into moving forward. The decision to work with a debt relief company is a big one. Take the time to do your research so you’re comfortable.

• Have a poor Better Business Bureau rating. If a debt relief company has many complaints on file, take that to heart. 

• Ask for access to your bank and credit card accounts. Never share login or password information with anyone.

At Freedom Debt Relief, we want you to get all the answers you need to help you tackle your debt. We’re proud of the work we do, and we want clients to be confident before they commit to the process. We’ll answer any questions you have, any time.

Explore Your Debt Relief Options and Make the Right Choice

If you’re concerned about debt or falling behind on payments, we understand how confusing it can be. You may even be asking, “Is Freedom Debt Relief legit?” 

We'll help you understand your options for dealing with your debt, including our debt relief program. Our Certified Debt Consultants can answer any questions or concerns you may have and help you find the right path forward. Find out if you qualify right now.