As of August 2019, the total consumer debt in the United States is $4.12 trillion. Are you among those in debt? Freedom Debt Relief is one of the largest debt relief companies in the United States and claims to have settled over $9 billion in debt for over 600,000 clients. Founders Andrew Housser and Brad Stroh started the company to “provide financial solutions, services, and education that enable people to reduce debt, build wealth, and achieve financial freedom.”
Freedom Debt Relief evaluates customers’ debts, customizes a plan to fit their needs, creates programs, negotiates with creditors and works with customers to reach a settlement. At the end of this process, customers will owe a single monthly payment over an agreed-upon period of time that will add up to less than what they owed before the settlement.
However, settlements are not guaranteed, and the process can destroy your credit. Debt settlement should only be used as a last resort. Make sure you’ve fully explored your options before moving forward with debt settlement.
Freedom Debt Relief claims to expertly negotiate with customers’ current creditors to get them to agree to settle for less than the amount of their debt. The company states it can resolve debt quickly and for a lesser amount than other debt solutions available with its 15 years of experience.
The company is usually successful at lowering debt, but there have been several complaints. The main complaint is that the process takes too long. Some creditors settle quicker than others and others don’t settle at all. In fact, some creditors might even sue you if they find out you’re working with a debt relief company.
The process of debt settlement through Freedom Debt Relief can take anywhere between three to four years as its staff negotiates with creditors and reaches appropriate agreements.
And when they do settle, Freedom Debt Relief is going to take a large cut of what they win for you. Often, the relief won’t be as much as was hoped because the company’s fees can be up to 25%. However, every little bit helps when paying off debt, and working with Freedom Debt Relief helps to remove a chunk of the burden.
|Minimum Debt||Fees||Average Savings||BBB Rating|
|Freedom Debt Relief||$15,000||15%–25%||20%–30%||B-|
|National Debt Relief||$7,500||18%–25%||30%–50%||A+|
|New Era Debt Solutions||No minimum||16%–20%||52%||A+|
Using Freedom Debt Relief
Even though their fees are high, it’s still beneficial to have some of your debt settled if you truly can’t afford to pay it off on your own.Freedom Debt Relief has been doing it successfully for long enough that the fees are understandable. The company makes the outcome of its top settlements available for potential clients to review and better understand the impact of Freedom Debt Relief’s services.
They settle an average of 43,891 accounts a month, and because it is a well-known company that has had big successes in the past, Freedom Debt Relief is a popular choice among clients seeking alleviation from their debts. Freedom Debt Relief relies on a team of experts who negotiate with creditors to bring financial relief to consumers while promising no fees until results roll in.
The process can take two to four years, and you can slowly pay off your debt normally while the process takes place. By the time you’ve reached a settlement, your debt will be lower from normal payments, and you’ll be able to pay off the rest much more easily.
Freedom Debt Relief is also a founding member of the American Fair Credit Council. Business Wire describes the council as “the leading association protecting consumer rights for the debt settlement industry.”
Under the American Fair Credit Council, members are required to operate on a “no advance free model,” so customers of debt relief companies and other institutions within this council do not charge consumers until the debt is completely and successfully negotiated.
Freedom Debt Relief also uses a client dashboard so current customers of the company can track the progress of their case and view the accounts in which they deposit money.
In general, you should not use a debt relief company unless it is a last resort. It can make your credit even worse than it already is. If you truly think that you absolutely will not ever be able to pay off the debt or convince the creditor to reduce it on your own, then Freedom Debt Relief is an option as far as professional debt relief companies go.
Things to consider
One of the first things you’ll find when you do an online search of the company name is a 2017 lawsuit that was recently settled in July 2019. Freedom Debt Relief settled for a $5 million civil penalty as well as $20 million to the company’s affected clients.
The lawsuit was brought forth by the Consumer Financial Protection Bureau, which alleged that Freedom Debt Relief “violated the Federal Trade Commission’s Telemarketing Sales Rule by charging people in advance of debt-relief services, which is illegal.” They also alleged that “Freedom charged fees — sometimes thousands of dollars — even when borrowers negotiated settlements on their own with their creditors.”
Freedom Debt Relief did not admit guilt but did agree to pay the settlement. This obviously calls several of their claims into question, and you should absolutely use this information when making your decision whether or not to use their services or any debt relief company’s services.
Freedom Debt Relief’s competition
Freedom Debt Relief’s competition mainly comes from the very council that it helped found, the American Fair Credit Council. As mentioned earlier, all of the members follow the no advance fee model. Under the American Fair Credit Council, charging advanced fees is illegal, making this statement not all that impressive.
National Debt Relief is one of its main competitors. The content on its website is much more open about the fact that your creditor might just say no to settling at all. This honesty on its main pages is a good sign that the company itself is honest. National Debt Relief also offers debt consolidation and bankruptcy services.
If you’re wary of the AFCC, New Era Debt Solutions offers debt relief services and is not a part of the council. The company claims on its website that it is “not one of those companies,” that settles debt in less-than-ethical ways. It seems New Era Debt Solutions tries to distance itself from the big players in the industry that allegedly use questionable business tactics.
New Era Debt Solutions focuses on debt settlement specifically, instead of having multiple services. On the one hand, a company that offers multiple services can be seen as respected and established. On the other, a company that specializes in one thing can be viewed as an expert in that one service. It all depends on perspective and personal viewpoints.
Any company that you choose is going to use similar strategies. The relationships a company has built with creditors can be the most important factor to consider when choosing a debt settlement or consolidation firm. If it has a good reputation with creditors, then that company is more likely to be able to get you a settlement.
Unfortunately, it’s hard to know that information without being inside the company. Ask about real-life examples of their relationships with creditors when you call or inquire about services.
The bottom line
We can’t emphasize enough that this service is a last resort. The best decision you can make for your future is to find a way to pay off debt yourself.
Unfortunately, that is not possible for many people. While politicians talk about forgiving debt, the reality is that a debt relief company is probably your only option outside of paying off the debt or negotiating with your creditors yourself.
And those creditors are much more likely to say no to you than to a professional from Freedom Debt Relief. Do your due diligence to ensure that turning to a professional debt consolidation company is the right choice for your financial future.