Is Freedom Debt Relief Any Good?

By Amara Etter

If you’re dealing with a giant debt pile and you’re barely treading water, it’s time for some professional help. Debt relief can help you avoid bankruptcy, but you’ve no doubt heard of the scams. So, is Freedom Debt Relief any good? Let’s take a look.

What is debt relief?

Let’s start here. Debt relief, also called debt settlement, is essentially the process of attempting to persuade your creditors – usually credit card issuers – to agree to accept less than the full amount owed to satisfy your debt.

How does it work?

With Freedom Debt Relief (FDR), you’ll first discuss your situation during a free consultation with one of the company’s certified debt consultants. If you decide that debt relief is the right option for you, FDR will help you create a personalized debt repayment plan.

Rather than paying your creditors directly, you’ll make monthly deposits into an escrow-type account from which your settlement funds will ultimately be drawn. After you have saved sufficient funds, Freedom Debt Relief will begin negotiations with each of your creditors. This usually starts around the fourth to sixth month of the program, but that can vary.

Ultimately, you may be able to have up to half your debt forgiven.

Why would creditors accept less than what I owe?

No creditor wants to accept a penny less than what’s owed. However, creditors are motivated to work with debt settlement companies since they know that if you file bankruptcy, they’ll be left out to dry.

How much does it cost?

Because Freedom Debt Relief is not a scam, it does not charge you until debts are settled. This is required by law, although some scofflaw companies hope you don’t know that.

You’ll pay FDR between 15% and 25% of the total debt settled. For instance, if your debts total $7,500 and Freedom Debt Relief settled $4,000, you would probably owe the company between $600 and $1,000, which will be extracted from your escrow account.

Am I a good fit?

You are if you have at least $7,500 of outstanding unsecured debt, which is what FDR requires. Such debts are not attached to collateral, and typically include credit card balances, medical bills, and personal loans.

Freedom Debt Relief has an outstanding 4.7 out of 5 rating from Lending Tree, so the company is a wise choice if you’re unable to make payments or can make only minimum outlays, which will take you forever to pay off.

Won’t debt relief affect my credit score?

You will see a hit in the first six months – note that your credit was already damaged when you enrolled -- but scores nearly completely recover after 45 months. Once all debts are resolved, Freedom Debt Relief says that about a quarter of its customers have a median score of at least 680. And if you’ve changed your spending habits, that score will only improve.

Why not just file bankruptcy?

Such a filing is a last resort and should not be taken lightly. Not only will doing so depress your credit score, but your credit report will retain the history of your past debts, even if the debt itself is forgiven. What’s more, lenders will view the action as a sign that you’re a risky borrower. If you’re approved for a loan at all, it will likely come with high interest rates.

Now that you’ve read this, you know the answer to whether Freedom Debt Relief is any good. After all, the company was founded in 2002 and has resolved more than $10 billion in debt. In this industry, that track record counts for a lot. Call FDR today and begin your path to a debt-free life.