Freedom Debt Relief

• Excellent Settlement Program and Debt Relief Services
• Experience and Accreditations
• Great Freedom Debt Relief Reviews
• Online Dashboard
• No Fees Charged Until After Debt Is Settled

Excellent Settlement Program and Debt Relief Services

As a leading debt settlement company, Freedom Debt Relief has several great advantages to its debt settlement services, including

• Low minimum of $7,500 in debt to begin debt settlement
• Costs between 15 and 25 percent of the total unsecured debt
• Free consultation with a Certified Debt Consultant

Freedom Debt Relief offers a free consultation with a highly trained, IAPDA-certified debt consultant when a consumer decides to enlist the company's debt settlement services.

According to a four-year study by Freedom Debt Relief, its customers start the program with a median of $28,000 in debt, which decreases to $3,800 after 45 months in the program. The graph below shows the decrease in debt over time and how this directly affects the increase in customers' credit scores. 

Experience and Accreditations

As an accredited debt relief company, Freedom Debt Relief has over 20 years of experience in the debt settlement industry. It has settled over four million accounts since its founding and regularly settles over $16 billion in debt.

Freedom Debt Relief has years of experience standing between the creditor and the client. FDR will work to obtain settlements that resolve credit card debt (or any type of unsecured debt, such as personal loan debt or medical debt).

FDR will walk clients through the debt settlement process: first, customers will voluntarily choose to stop making monthly payments to lenders. Instead, clients will elect to make a monthly deposit into a separate special purpose account to save money to pay for the settlements once negotiated. Freedom Debt Relief will then work to negotiate a settlement on behalf of its clients.

Unfortunately, this settlement process will affect your credit score. If you miss any minimum payments on your credit card or other debt, this will decrease your credit score. A four-year study by Freedom Debt Relief found that its customers' credit scores dropped in the first six months of the debt settlement program, then began to recover. According to the study, most customers' credit scores recovered to their previous position by the time they completed the Freedom Debt Relief program. It's smart to have a plan for boosting your credit score before you start the debt settlement process.

The graph below shows Freedom Debt Relief's customers' credit scores over time as they improve their debt through the company's program. 

Great Freedom Debt Relief Reviews

Most Freedom Debt reviews on Best Company are positive. People commend FDR for having good customer service, explaining debt management, and keeping them updated on where they are at in the debt settlement program.

Clients drowning in high amounts of unsecured debt (credit card debt, personal loans, medical debt, student loan debt) usually find that the company can save them from paying a large percentage of what they owe. 

Despite the debt settlement program's tendency to negatively affect credit scores in the first six months, clients with mountains of credit card debt find it extremely helpful for debt reduction. It's also important for people to know that forgiven debt is considered taxable income, so you may owe more in taxes when using debt settlement services.

Online Dashboard

One feature that sets FDR apart from the rest is a unique and intuitive online dashboard to track clients' pace throughout the program. This helps people to actually see their progress while settling their debts. It also offers education to help clients improve their financial knowledge.

Not many debt settlement companies in the industry offer this tool as part of their packages.

No Fees Charged Until After Debt Is Settled

As opposed to a debt consolidation company which consolidates all of a customer's debt into one consolidation loan and one monthly payment, debtors approach Freedom Debt Relief as a last resort in order to negotiate their debt and relieve their burden.

Freedom Debt Relief doesn't charge an upfront fee or any other fees until after debt is settled with creditors, the settlement has been authorized with the client, and the first payment has been made. This practice is standard for the industry. Debt relief companies, like National Debt Relief and Pacific Debt, also do not have upfront fees.

Upon enrollment, customers will open an FDIC-insured bank account that the client controls. Clients will put the monthly deposit that was agreed upon into this bank account instead. This is the main reason why this program hurts your credit score more than debt consolidation.

Next, FDR's representatives will negotiate with your creditors to settle your debt.

Freedom Debt Relief makes money by charging fees on the enrolled debt amount. Its average fees are a bit high (around 23 percent fees on enrolled debt), but its services are thorough.

The company's ability to help clients find an easier road to financial freedom and paying off debt is highly valuable.

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• Freedom Debt Relief Cost
• Limited Availability
• Limited Services
• Complaints
• Consumer Financial Protection Bureau Lawsuit

Freedom Debt Relief Cost

To settle an account enrolled at $5,000, it will cost around $1,150 (or about 23 percent of the enrolled debt).

Users are charged an average of 23 percent of their total enrolled debt to use FDR. While this number is in line with their competitors, it is only an average. Customers could end up paying more or less than this to use FDR. FDR’s prices range between 15 and 25 percent. The rates vary depending on the state the client lives in.

Current national debt relief trends indicate that debt settlement companies tend to charge a percentage of enrolled debt as opposed to saved debt. This means that the more total debt you have, the more debt settlement companies will charge you.

Although working with a debt settlement firm still saves you from paying thousands of dollars to creditors; it's better to work with companies that charge a percentage of saved debt rather than enrolled debt.

So exactly how much will Freedom Debt Relief cost you? It will cost you around 23 percent of your total enrolled debt, but you will have to have a consultation to get an accurate estimate. The fee is competitive for the industry. The fee is assessed when a successful settlement has been authorized and the first payment has been made.

However, Freedom Debt Relief’s services are high quality and make it easier to make your way to living debt-free.

Limited Availability

Freedom Debt Relief offers debt settlement programs in only 32 states. If Freedom Debt Relief does not offer its debt relief program in your state, you'll have to consider other debt settlement companies.

Most debt settlement companies have a minimum debt requirement to ensure a payout. A debt settlement company that charges by saved debt will not run into this problem as much.

Freedom Debt Relief requires a minimum debt amount of $7,500 (the amount of which is charged fees between 15 and 25 percent). While this threshold is low compared to other debt settlement companies, it does rule out people struggling with lower debt amounts.

An additional limitation with Freedom Debt Relief is that the company only works with debtors with unsecured debt. Freedom Debt Relief is not an option for those struggling with secured debt. The difference between unsecured and secured debt is that unsecured debt is not backed by assets or collateral, while secured debt is.

Limited Services

Some debt relief agencies provide services outside of debt settlement, such as credit counseling, advocating for a lower interest rate on your debt, or debt management plans. However, Freedom Debt Relief does not offer these services.

As such, if you choose to go with Freedom Debt Relief to help you work toward resolving your debt, be aware that you will be signing up for a debt settlement program, and may still receive calls from a debt collector or face the risk of a negative impact on your credit score. 

Complaints

While most of the Freedom Debt Relief reviews are positive, there are still several Freedom Debt Relief clients who have complaints about the debt relief company. The two main complaints that people seem to have are the following:

• Debt settlement takes too long or isn't as effective as people hoped
• FDR charges too much for its services, sometimes costing consumers up to 25 percent of their total enrolled debt

These complaints are fairly common within the debt settlement industry. It’s important for clients to be fully informed about what debt settlement is and how it works. Potential clients should use the free consultation to learn more about the time it takes to reach a settlement and specific price information.

Consumer Financial Protection Bureau Lawsuit

In 2019, the Consumer Financial Protection Bureau and Freedom Debt Relief reached an agreement that FDR would do the following:

• Make it clear that in some cases, FDR may not be able to negotiate a debt if the creditor is unwilling to negotiate
• Let consumers know that, in some cases, the creditor will only negotiate if the client is also directly involved in the negotiations, and that the consumer has the right to refuse to participate in the negotiations and can remove the debt from their program without penalty
• Make it clearer to consumers under what circumstances they will be charged a fee
• Stop charging fees on all accounts where the settlement amount was not reduced, or where the creditor wrote off the debt on their own
• Make it clearer to consumers that, if they end their program early, any money left in their program savings account belongs to them, minus any funds earned by the company according to legal statutes
• Pay restitution money to injured consumers
• Pay a civil penalty

It's a good idea for potential clients to do some research on the process, consumers' rights, and industry standards for settlement companies before setting up a free consultation with a debt settlement service. It's also recommended to read recent customer reviews to get a better sense of Freedom Debt Relief's commitment to clients and how good its settlement services are.