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Freedom Debt Relief is a debt settlement company that negotiates on behalf of consumers to lower how much debt they owe to their creditors.
In this review, I cover how the settlement process works with Freedom Debt Relief, what pros and cons to consider and how to qualify.
But first I want to be clear: Debt settlement is risky. There’s no guarantee of success, and it can seriously damage your credit.
Debt settlement may be an option for those severely overwhelmed by debt. Before opting into a program, NerdWallet recommends exploring other ways to get out of debt, like enrolling in a debt management plan or applying for a debt consolidation loan.
» MORE: What is debt settlement?
Our Debt Relief Partners
Accredited Debt Relief
Accredited Debt Relief NerdWallet partners with Accredited Debt Relief to provide customers with over $20,000 in credit card debt with consolidation options to help them become debt free in 2-4 years by significantly reducing your monthly payment.
Freedom Debt Relief
Freedom Debt Relief NerdWallet partners with Freedom Debt Relief to provide customers with over $7,500 in unsecured debt with settlement options to reduce credit card debt, get one affordable monthly payment, and resolve their debt in as little as 24-48 months.
National Debt Relief
National Debt Relief NerdWallet partners with National Debt Relief to provide customers with over $10,000 in unsecured debt with settlement options to help them become debt free in 2-4 years with a total average savings of 23% after fees.
Freedom Debt Relief at a glance
| Minimum debt required to enroll: | $7,500. |
| Types of debt eligible for enrollment: | Unsecured debt, including credit cards, personal loans, medical debt, BNPL loans and some private student loans. |
| Settlement fee: | 15% to 25% of the total debt enrolled. |
| Account fees: | $9.99 one-time setup fee. $9.99 monthly maintenance fee. |
| How long it may take: | 35 months, on average. |
| How much you may save: | 28% of enrolled debt after fees, on average. |
| Availability: | Not available in: Colorado, Hawaii, Nebraska, North Dakota, Oregon, Rhode Island, Vermont, Washington, West Virginia, Wisconsin and Wyoming. Freedom works with legal partners to provide debt settlement services in: Connecticut, Georgia, Illinois, Kansas, Maine, New Hampshire, New Jersey, Ohio, South Carolina and Virginia. |
How does Freedom Debt Relief work?
If you enroll in Freedom’s debt relief program, you’ll need to stop making payments on your debts and open an FDIC-insured “dedicated account,” which you’ll pay into instead.
You own and control this account, and Freedom works with you to determine how much to deposit each month — you may be given a few options. A client’s monthly deposit amount is $460, on average, Freedom says.
As money accrues in the dedicated account, Freedom begins negotiating with creditors on your behalf in an effort to get them to accept less than the amount you owe. The idea is that after months of nonpayment, the creditor will be motivated to take the lower sum rather than risk getting nothing at all.
Freedom says it uses an algorithm that looks at each client's set of creditors and optimizes the negotiation order to try to maximize success.
If a creditor accepts the lower payoff amount, you pay the creditor from your dedicated account, and the debt is then considered settled.
It takes 35 months, on average, to complete Freedom’s debt settlement program.
🤓 Nerdy Tip
Debt settlement companies often list projected savings on their website. These percentages vary significantly and may not include fees, so take them with a grain of salt. Freedom told NerdWallet that customers can expect to save an average of 28% of their enrolled debt after fees. That means if your enrolled debt is $25,000, you could save $7,000. Projected savings are never a guarantee. How much does Freedom Debt Relief cost?
The biggest cost of debt settlement is the settlement fee. Freedom’s settlement fee ranges from 15% to 25% of the total enrolled debt. This percentage is based on your state of residence, Freedom says.
Here’s how the settlement fee works: If you enroll in debt settlement with $25,000 in credit card debt, and you’re able to settle for $12,000, you’ll pay at most a settlement fee of $6,250 (25% of $25,000). This is in addition to the $12,000 you pay to your creditors. Altogether you’ll pay $18,250.
A debt settlement company cannot collect a debt settlement fee until it successfully settles a debt .
Other costs to using Freedom Debt Relief include a one-time $9.99 setup fee and a monthly fee of $9.99 for establishing and maintaining the dedicated account.
Is Freedom Debt Relief legit?
Freedom Debt Relief is a legitimate debt settlement company founded in 2002. It’s accredited by the Better Business Bureau (BBB) with an A+ rating and holds an accreditation from the Association for Consumer Debt Relief (ACDR) through its parent company Achieve .
It’s important to carefully weigh the pros and cons before deciding whether to work with Freedom Debt Relief.
Pros
May refund fees
Offers loan products
Free access to legal services
Cons
Limited state availability
Risky way to get out of debt
No guarantee of success
Costs add up
Pros of Freedom Debt Relief
Fees may be refunded: As part of the company’s program guarantee, if the total settlement cost is more than the total amount of debt you enrolled in the program, Freedom will refund the difference, up to 100% of collected fees.
This ensures you don’t end up in a worse position than you started if, for example, you aren’t able to settle your debts for much less than you owe, and the settlement fee ends up wiping out any savings. No other debt settlement company offers this perk.
Debt consolidation and acceleration loans: Freedom Debt Relief partners with Achieve to offer two types of loans. The first, a traditional debt consolidation loan, gives you access to a lump sum, which you use to pay off all your debts at once, without enrolling in Freedom’s debt settlement program. You then pay back the loan in fixed monthly installments over two to five years, depending on the term you choose.
The second is an acceleration loan. With this type of loan, you’ll use the lump sum to pay the settled amount to your creditors, plus any settlement fees, instead of waiting to build up the funds in your dedicated account. You’ll need to first enroll in Freedom’s debt settlement program to be eligible.
Freedom will discuss your eligibility for these products during your initial free call.
Free access to legal counsel: As part of your enrollment in the debt settlement program, Freedom provides access to its “legal partner network,” a network of attorneys that can assist customers in the case they’re sued by a creditor. Services are limited (attorneys won’t file paperwork or appear in court), but an attorney will step in to help settle lawsuits. Unlike other companies, this perk is included in the cost of the program.
Cons of Freedom Debt Relief
Limited state availability: Freedom Debt Relief is available in 39 states, which is about the average for a debt settlement company, but it may limit eligibility for some customers. Other large debt settlement companies, like Pacific Debt Relief or National Debt Relief, are available in 45 states or more.
A risky way to get out of debt: There are risks in working with Freedom Debt Relief, including a major hit to your credit, falling deeper into debt as you await a successful settlement negotiation and even the possibility of being sued by a creditor. Learn more about debt settlement risks lower down.
No guarantee of success: Like all debt settlement companies, Freedom Debt Relief may not be able to settle all your debts even if you follow the program perfectly. This is because not all creditors accept settlement offers.
Costs add up: When working with a debt settlement company like Freedom Debt Relief, you may be charged multiple fees, including a monthly account maintenance fee and a settlement fee of up to 25% of the enrolled debt. These fees are in addition to any charges you may accumulate from your creditors, like late fees or interest. Consider alternative ways to get out of debt (listed below) that may have fewer fees and cost less overall.
How to qualify for Freedom Debt Relief
Freedom Debt Relief provides a no-obligation debt evaluation to all prospective customers. As part of the evaluation, Freedom will look at the debts you want settled, as well as your income and expenses, then review your options.
Freedom Debt Relief works with consumers who have at least $7,500 in unsecured debt from credit cards, personal loans, medical bills, BNPL loans and some private student loans.
It does not settle secured debts, meaning any debt tied to collateral, like an auto loan or mortgage. Freedom Debt Relief also doesn’t settle federal student loan debt.
The average Freedom Debt Relief customer has $28,000 in total enrolled debt across seven accounts.
During the application process, Freedom does a soft credit pull only, which won’t hurt your credit score.
Know the risks of debt settlement
It’s important to understand the overall risks of debt settlement before deciding whether to work with Freedom Debt Relief.
Organizations like the Consumer Financial Protection Bureau and the Federal Trade Commission urge consumers interested in debt settlement to consider these risks:
- It will hurt your credit: Because you’re required to stop making payments on enrolled debts, those accounts will be marked delinquent on your credit reports. Your credit score will take a significant hit, especially if you weren’t already delinquent on those accounts. Delinquencies and settled accounts stay on your credit reports for seven years .
- Interest and fees continue to accrue: Until you enter a settlement agreement, you’ll accrue additional interest and late fees on your debt . If you don't stick with the program to completion, or if the debt settlement company can't negotiate a settlement, you may end up with an overall higher balance.
- You may still hear from creditors or debt collectors: There’s no guarantee your creditors will want to work with a debt settlement company, and you may be contacted by debt collectors or sued by creditors during the process .
- Forgiven debt may be considered taxable income: Forgiven debts over $600 may be counted as income on your taxes . Creditors may send a 1099-C form to you in the mail and to the IRS. One exception is if you are insolvent (your liabilities exceed your total assets) at the time the company settles with your creditors.
Freedom Debt Relief vs. National Debt Relief
Freedom Debt Relief and National Debt Relief are two large debt relief companies that offer similar debt settlement programs. Both settle unsecured debts with a minimum requirement of $7,500, and they charge the same settlement fee (up to 25% of enrolled debt) for their services.
National projects smaller savings for clients (20% of enrolled debt after fees), but is available in more states.
Freedom has unique program perks you won’t find elsewhere, including refunded fees for some customers and free access to a network of attorneys.
Alternatives to hiring a debt settlement company
Do-it-yourself debt settlement
Though it may seem easier to have a third party, like a debt settlement company, intervene on your behalf, you could have just as much success calling your creditors and negotiating with them yourself — and you can save thousands by not having to pay a settlement fee.
Same as with using a debt settlement company, success isn't guaranteed, but if you owe only a few creditors, it’s worth a try.
Debt management plan
With a debt management plan, you’ll work with a nonprofit credit counseling agency to consolidate your debts into one monthly payment, while also reducing the interest rate.
This is a good option for consumers with credit card debt who have a steady income to repay the debt within three to five years.
Unlike debt settlement, a debt management plan should help build your credit score.
» MORE: What is a debt management plan?
Debt consolidation loan
By taking out a debt consolidation loan, you can pay off multiple debts at once, so you’re left with only one payment on your new loan.
These loans are available to borrowers across the credit spectrum, and you can often pre-qualify with lenders to see your rates with a soft credit check.
A debt consolidation loan should have a lower interest rate than your current debts, which saves money and helps you get out of debt faster.
Bankruptcy
Bankruptcy lets you resolve your debt under protection from a federal court.
Chapter 7 bankruptcy, the most common form, erases most unsecured debts in four to six months. It’ll also stop calls from collectors and prevent lawsuits against you.
Like with debt settlement, your credit will suffer, so consult a bankruptcy attorney first.
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- 1. Federal Trade Commission. Debt Relief Services & the Telemarketing Sales Rule: A Guide for Business. Accessed Feb 19, 2026.
- 2. Better Business Bureau. Freedom Debt Relief. Accessed Feb 19, 2026.
- 3. Association for Consumer Debt Relief. Find an Accredited Debt Relief Provider. Accessed Feb 19, 2026.
- 4. Consumer Financial Protection Bureau. How long does information stay on my credit report?. Accessed Feb 12, 2026.
- 5. Consumer Financial Protection Bureau. What is a debt relief program and how do I know if I should use one?. Accessed Feb 12, 2026.
- 6. Federal Trade Commission. How To Get Out of Debt. Accessed Feb 12, 2026.
- 7. Internal Revenue Service. About Form 1099-C, Cancellation of Debt. Accessed Feb 12, 2026.
