3.0/5
Freedom Debt Relief
- Best for: People with $7,500 or more in unsecured debt they can’t repay, even on a nonprofit debt management plan
- What Sets It Apart: A fee refund if settlement payments plus fees exceed your enrolled debt; a partner attorney who negotiates, at no extra cost, if an enrolled creditor sues
- Cost: 15% to 25% of enrolled debt, charged only after you approve a settlement and its first payment is made; $9.95 to open the dedicated account and $9.95 a month
- Eligibility: $7,500 or more in unsecured debt; credit card, medical, store card, and personal loan debt, plus some private student loans; 40 states, 10 of them through legal partners
- Features: Programs of 24 to 48 months
- Pros: No upfront fee; no penalty to cancel or to withdraw a debt; A+ BBB rating and a 4.6 TrustScore on nearly 52,000 Trustpilot reviews
- Cons: Credit damage and collection calls while creditors go unpaid; no court representation if a creditor sues; possible tax on forgiven debt; a 2019 CFPB judgment and a 2020 New York settlement
Freedom Debt Relief negotiates down unsecured debts and pays each settlement from an account you fund monthly. It’s for people with $7,500 or more of such debt who are struggling after a hardship.
Key Features
- Charges 15% to 25% of enrolled debt, varying by state and amount, so $3,000 to $5,000 on $20,000
- $9.95 to open the FDIC-insured account you own, then $9.95 a month, both to its provider
- Credit card, medical, store card, and personal loan debt, plus some private student loans, but not car loans, mortgages, or federal student loans
- Programs typically lasting 24 to 48 months
- Available in 40 states, 10 of them through legal partners
Pros
- No upfront fee, and no penalty to cancel or to pull a debt before it settles
- A fee refund if settlement payments plus fees exceed the debt you enrolled, not counting account fees or taxes
- An A+ rating from the Better Business Bureau and a 4.6 of 5 TrustScore on nearly 52,000 Trustpilot reviews, which it invites clients to leave
Cons
- A credit score that typically drops in the first six months, plus collection calls for most clients, as creditors go unpaid
- No court representation if a creditor sues, since the partner attorney Freedom may assign only tries to negotiate a settlement
- Possible income tax on forgiven debt, part of what debt settlement costs
- A 2019 Consumer Financial Protection Bureau judgment for $20 million in restitution and a $5 million penalty, over claims it charged fees without settling debts as promised
- Nearly $3.6 million returned to clients in 2020, after New York’s attorney general said most in the state got under half the savings it advertised
Freedom Debt Relief suits people who can’t repay unsecured debt even at a nonprofit debt management plan’s lower rates, can keep up deposits for up to four years, and would rather pay its fee than negotiate with creditors themselves. Borrowers who could repay on such a plan should take it, and those in the 10 states Freedom skips can compare Accredited Debt Relief, which offers evaluations in all 50 states.
Learn more about Freedom Debt Relief.
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