Freedom Debt Relief 2022 Review
Freedom Debt Relief, a subsidiary of Freedom Financial Network, is currently the largest debt negotiator in the US (serving 40 states and 3 US territories). Freedom Debt Relief aims to help Americans lower and resolve their unsecured debt such as credit cards, personal loans, and medical bills.
Since 2002, they have helped over 750,000 consumers settle their debts and currently lead the industry with over $10 billion in total debts settled.
Freedom Debt Relief states that their debt resolution services are best for customers with at least $15,000 in unsecured debt and who are considering the bankruptcy or debt consolidation process.
Freedom Debt Relief's affordable and individually customized program could help you completely resolve your debt in 24 to 48 months.
Potential clients are eligible for a 100% free no-obligation debt relief consultation to learn more about how debt settlement and consolidation can help their situation. They can sign up for a consultation by phone, email, or online.
You can call Freedom Debt Relief and speak to a debt relief specialist who will evaluate your debts, explain the debt relief process, and give you recommendations on the best path to take based on your individual situation. Freedom Debt Relief will authorize a soft pull on your credit (which does not affect your score) to see which plan is best for you.
Once you sign up, you will have to stop making payments to your creditors and begin making monthly deposits into an FDIC-insured savings account, which is controlled by you. The deposit you make is based on your income, debt, and other related factors.
Freedom Debt Relief negotiates with your creditors using the lump sum you have saved up and makes an offer to settle your debt. During this time, you can use Freedom Debt Relief's online dashboard to track your progress 24/7.
Freedom Debt Relief Pros
- #1 in Debt Settlement Clients Served: Over 750,000 clients have been enrolled in Freedom Debt Relief's program. Since 2002, FDR has settled over 2.9 million accounts for their clients. As of April 2021, they are currently settling about $200 million in debt (over 55,000 debt settlements per month). FDR employs about 2,000 professionals dedicated to helping clients with debt.
- #1 in Total Debt Amount Settled: Freedom Debt Relief has helped resolve over $10 billion in debt for their clients (saving them over $2 billion dollars).
- Top Rated Customer Service: Overall, customers reviewed Freedom Debt Relief positively (4.6 out of 5 Trustpilot rating out of 33,055 reviews as of 4/2/2021), reporting that employees were courteous, professional, thoroughly explained the process, and kept them updated on any changes.
- Top Industry Accreditations: Freedom Debt Relief is accredited by the American Fair Credit Council (AFCC), which ensures debt settlement companies comply with industry standards, and International Association of Professional Debt Arbitrators (IAPDA), which ensures that all Freedom Debt Relief agents to undergo a three-month training to receive this certification. Freedom Debt Relief also helped set industry standards by being a founding member of the AFCC and in 2010, they helped establish the FTC's rules banning abusive debt settlement practices.
- 100% Free Initial Debt Consultation: Simply fill out a form on their website or call Freedom Debt Relief.
- No Upfront Fees: You only pay if and after your debts are settled.
- Fully Customized Debt Relief Plan: You receive a customized plan that best suits your budget. You will receive a free consultation, no upfront fees, and a trained debt consultant to help with the entire settlement process.
- Track Your Progress: Freedom Debt Relief provides a personalized online dashboard for customers to view their progress in real time. This includes the amount you have saved, the status of your accounts, and any fees you owe. This online dashboard also lets you connect with customer service and access additional services.
- Additional Resources: Freedom Debt Relief provides free resources and tools such as an estimated savings calculator and additional options beyond debt settlement.
- Great Customer Service: Customers report helpful representatives who are available by phone or email to answer any questions about the debt relief process.
Freedom Debt Relief Cons
- Freedom Debt Relief's services are not available in Colorado, Hawaii, Illinois, North Dakota, Oregon, Rhode Island, Vermont, Washington, West Virginia, or Wyoming.
- Although Freedom Debt Relief may have fees as low as 15% of the total debt enrolled, prices could also range as high as 25%. Be sure to request a free savings quote from Freedom Debt Relief before you sign up.
- Some customers reported that their debts took too long to settle. However, keep in mind that every case is unique and debt settlement timelines can vary.
How Does Freedom Debt Relief Work?
Freedom Debt Relief works with consumers who have debt that they aren’t able to afford to repay. It focuses on unsecured debts, such as credit card debt, medical debt, personal loans, and private student loans.
When you work with Freedom Debt Relief, the company will negotiate with your creditors on your behalf. During these negotiations, the company will try to get your creditors to agree to settle your debts for less than the full amount that you owe or to let you adjust the repayment terms of your debt to be more affordable.
Once you start working with Freedom Debt Relief, the company opens a savings account for you and you start making deposits to that account instead of making payments on your debts. This will hurt your credit and could cause lenders to add late fees and penalties to your balances. However, Freedom Debt Relief will try to negotiate away these fees.
Once you complete the payment plans that Freedom has negotiated for you, you’ll be out of debt. The fee you pay to Freedom Debt Relief will be a percentage of the amount of debt you enrolled in the plan.
What Freedom Debt Relief Can Do For You
- Freedom Debt Relief Graduates may have their debt dramatically reduced to when they first began the program.
- In general, the median enrolled debt decreased from $28,000 (at enrollment) to $3,800 forty-five months after enrollment.
- FDR Graduates’ FICO® Scores continue to improve more than two years after graduation with more graduates moving into the financial mainstream.
Signing up for Freedom Debt Relief involves a standardized process.
- Initial consultation. Before you get started, you’ll meet with a specialist to determine whether you’re a good fit for Freedom Debt Relief’s services. This includes going over your debts and financial situation with the company.
- Payment plan. If you’re a good fit, Freedom Debt Relief will design a repayment plan for you to review. If you think it looks good, you’re ready to move forward.
- Pause your debt payments. Once you’ve approved a plan, you’ll stop making payments on your debts. Instead, you’ll deposit money to a savings account that Freedom Debt Relief opens for you.
- Wait for negotiations. Once you have a sufficient balance in your savings account, Freedom will reach out to your lenders to negotiate. The hope is that the combination of months of missed payment and the opportunity to get a sum of cash right away will make lenders willing to settle for less than you owe.
- Approve the settlement. If Freedom Debt Consolidation reviews your situations and is successful in negotiating settlements or repayment plans, you get to read over and approve the offers.
- Pay off debts. Once you approve a debt settlement offer, Freedom will pull money from your savings account to pay the lender and to cover its fees.
If you have many delinquent debts, this process will repeat as you build up enough savings to make good offers to each lender. Freedom Debt Relief says most individuals take between two and four years to complete the entire process.
Terms and Requirements
If you’re interested in Freedom Debt Reliefs services, it’s important to understand how you can qualify. The good news is that the company only has two qualification requirements.
One is that it can only assist borrowers with unsecured debt, such as medical debt or credit card balances.
Second is that your total unsecured debt must be at least $7,500.
Freedom Debt Relief Pricing
Freedom Debt Relief accepts a minimum of $15,000 in unsecured debt, such as credit cards and medical bills, rather than secured debt, which is backed by collateral, such as home and auto loans.
Freedom Debt Relief's fees for services are generally 15 to 25% of the client's total debt, which is comparable to the rest of the debt consolidation industry. This fee is based on a number of factors, including the state and the amount of debt.
Clients are given an online portal which allows 24/7 access to see progress as it happens. Freedom Debt Relief's customers only pay if their debt is reduced (there are no upfront fees and no fees are charged until you see results), and the program could help resolve debt in 24-48 months.
Who is the Best Fit for Freedom Debt Relief?
Freedom Debt Relief can help people who have large amounts of unsecured debt set up a payment plan or settle for less than they owe. The drawback is that part of the process involves intentionally missing payments on your debts, which can really tank your credit.
That means that the service is best for people who have high debt balances and who already have poor credit. If your credit is already lower, damaging it further isn’t a major drawback and you could save a lot of money.
Freedom Debt Relief and Your Credit Score
A debt settlement program is a good first step towards making a long-term positive impact on your credit score. While your credit can be damaged short-term, decreasing your debt burden is essential for great creditworthiness.
Clients may see an initial temporary credit score drop in the first six months (due to late and missed payments). However, clients enrolled in Freedom Debt Relief’s program see their credit scores recover once debts begin to be resolved and credit card utilization is reduced.
According to a longitudinal study of Freedom Debt Relief clients between 2014 and 2018, Freedom Debt Relief Graduates’ FICO® scores continued to improve over more than two years after the program as clients exercised improved financial habits.
In short, clients that successfully completed the Freedom Debt Relief program had both a lower debt burden and a credit score that recovered to approximately the same level as during the initial program enrollment.
If you’re not sure that Freedom Debt Relief is right for you, there are other options out there.
One is to try negotiating with your creditors on your own. This can be much cheaper than a debt relief company, but it isn’t easy. If you’d rather work with a professional, consider:
- National Debt Relief
- New Era Debt Solutions
Freedom Debt Relief is one of the largest debt settlement companies in the debt relief space and carries an industry-leading reputation of professionalism and great customer service with experienced debt consultants, all while meeting industry accreditations and backing their service with a money-back guarantee.
However, their potentially high rates may be a concern, so if you are interested you should call to receive a free consultation and savings quote from the company before moving forward.
Freedom Debt Relief disclaimer: Our estimates are based on prior results, which will vary depending on your specific enrolled creditors and your individual program terms. Not all clients are able to complete their program for various reasons, including their ability to save sufficient funds. We do not guarantee that your debts will be resolved for a specific amount or percentage or within a specific period of time. We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Our service is not available in all states and our fees may vary from state to state. Please contact a tax professional to discuss potential tax consequences of less than full balance debt resolution. Read and understand all program materials prior to enrollment. The use of debt settlement services will likely adversely affect your creditworthiness, may result in you being subject to collections or being sued by creditors or collectors and may increase the outstanding balances of your enrolled accounts due to the accrual of fees and interest. However, negotiated settlements we obtain on your behalf resolve the entire account, including all accrued fees and interest. C.P.D. Reg. No. T.S.12-03825.
Contact Freedom Debt Relief
Email: [email protected] Phone: 800-910-0065 Address: 1875 S Grant St. Suite 400 San Mateo, CA 94402-2676
Customer Reviews for Freedom Debt Relief
Freedom Debt Relief has generally positive reviews from clients and as of April 2021, they have a 4.6/5 on Trustpilot.
Here are some real customer reviews from Trustpilot:
With one little hiccup, your service was excellent. Jan and me are greatful for your help. -May 2020
Just getting started with this company and you couldn’t ask for nicer people to work with they will answer all the questions you need answered call you back when you need them to -May 2020
The information provided has given me an honest way out of debt. Customer helpline is immediate and the site is easy to navigate. I have been given all documents through the online site and mailed paper copies as well. I feel like I’m getting control of my financial life again. -May 2020
Frequently Asked Questions
What is the minimum debt needed to qualify for Freedom Debt Relief's services?
The minimum unsecured debt needed to enroll in Freedom Debt Relief's services is $15,000.
What are Freedom Debt Relief's fees for debt reduction?
Freedom Debt Relief's fees range from 15% to 25% of the total unsecured debt enrolled in the program. You pay no fees upfront, you only pay if a debt settlement is successfully negotiated with your creditor.
Should I include all of my credit cards in the Freedom Debt Relief program?
If you have a low balance credit card, it is advised to pay that off. However, the program will not work generally unless you enroll all of your high balance (greater than $500) credit card accounts. Open credit cards make it difficult to negotiate with creditors because they see you settling on some accounts but not others.
When does Freedom Debt Relief start negotiating with creditors?
Until you have enough money saved in your settlement account, negotiation activity is limited. The first settlement typically happens between months two and four of the customer’s program. However, this depends greatly on your monthly deposit amount, how many creditors you have enrolled in your program, and the balance on each account. In some cases, it may be more than six months before the first settlement is reached.
What happens if my debts are sent to a law firm?
Lawsuits are only filed on a small percentage of enrolled debts. However, in the case that a lawsuit is filed, Freedom Debt Relief is established with a third party service from a law firm that can negotiate with the goal of resolving the debt.
Does Freedom Debt Relief work with all types of debt?
Freedom Debt Relief deals with unsecured debts such as credit cards, medical bills, and personal loans. They don't work with secured debt like auto loans, federal student loans, or mortgages.
Will I have to take out a loan to cover my existing debts?
Freedom Debt Relief's services don't require you to take out a loan to pay off your debts. Most clients make a monthly deposit into their savings account to fund their settlement. Freedom does have a relationship with a lender, so customers who consistently make a monthly payment are eligible for a loan to pay of at least one of their settlements.
Will I owe taxes on any forgiven debt?
The IRS code states any forgiven debt from a creditor should be treated as income. However, if you are unable to pay any of your owed debts and your insolvency was greater than the amount of debt settled, you are not required to pay taxes on the amount of debt relieved. Either way, you must attach Form 982 to notify the IRS when you file your tax return.
If you are unsure of your exact situation, you can contact a tax specialist for more information.
Will late fees and interest accrue on my accounts?
Your creditors will add late fees and interest to your balances as your accounts become delinquent, so your total balance increases until a settlement is reached. Your interest will accrue even if you make minimum payments on your account. Freedom Debt Relief aims to negotiate large reductions on your debt, even with the added fees and interest.
Do I have control of the savings account that holds my funds before settlement?
Yes. Your savings account is set up in your name so you have complete control of the funds.
Is Freedom Debt Relief legit?
Yes, Freedom Debt Relief is legit. The company can help you get out of debt, but you will have to pay a fee and expect your credit score to drop a bit in the process.
Reviews for Freedom Debt Relief
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4.9 out of 5 stars(357 Reviews)
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Our Debt Relief Partners
Accredited Debt Relief, American Debt Enders, Consolidated Credit, CuraDebt, Freedom Debt Relief, Pacific Debt Inc
|Credit Score Required||None|
|Pricing||15% - 25% of total debt|
|Minimum Debt Amount||$15,000|
|Number of Customers Helped||750,000|
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