Freedom Debt Relief review: Everything to know

CBS News

21-05-2025

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Freedom Debt Relief could help you break free from your debt problems, but there are a few things to know first.
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Based in San Mateo, California, Freedom Debt Relief was founded in 2002 with a mission to help Americans who have become overwhelmed by their unsecured debt. Launched during a time of rising consumer debt, the company pioneered debt settlement services that would later become industry standards. Since that time, Freedom Debt Relief has grown to become one of the largest debt settlement companies in the nation.
Freedom Debt Relief claims to have resolved over $20 billion in consumer debt for more than 1 million clients across the country since its inception. Over the last two decades, Freedom Debt Relief has expanded its footprint and established itself as an industry leader in debt negotiation. The company is also a founding member of the American Fair Credit Council (AFCC), which established ethical guidelines for the debt settlement industry.
Understanding this background can provide important context for evaluating whether their services might be appropriate for your situation. But what else should you know about Freedom Debt Relief before deciding whether what this company offers makes sense for your needs? Below, we'll detail everything to know now.
Find out how Freedom Debt Relief could help you here.
Freedom Debt Relief: Everything to know
Freedom Debt Relief operates on a straightforward premise: They negotiate with your creditors to try and reduce your total debt amount in exchange for lump-sum settlement payments. This process typically involves the following steps:
Free debt evaluation : You start with a complimentary consultation to assess your financial situation and determine if you qualify for the program
: You start with a complimentary consultation to assess your financial situation and determine if you Dedicated account setup : If you enroll, you'll stop making payments to your creditors and instead deposit funds into a dedicated, FDIC-insured account that you control.
: If you enroll, you'll stop making payments to your creditors and instead deposit funds into a dedicated, FDIC-insured account that you control. Negotiation : As your account balance grows, Freedom Debt Relief's team negotiates with your creditors to settle your debts for a reduced amount
: As your account balance grows, Freedom Debt Relief's team negotiates with your creditors to Approval and payment: Once a settlement is reached, you'll be notified to approve the offer. Upon your approval, the agreed-upon amount is paid to the creditor from your dedicated account.
Enrollment process
The enrollment process begins with a free consultation, which is typically conducted over the phone. During this initial conversation, a Freedom Debt Relief representative evaluates your financial situation, explains how the program works and determines whether you're a good candidate for debt settlement. They will also help you determine an affordable monthly deposit amount based on your debt load and financial situation.
If you decide to proceed, you'll sign a service agreement and establish a dedicated FDIC-insured account with a third-party financial institution. This account, while opened in your name and under your control, is specifically designated for accumulating funds that will eventually be used for settlement payments.
Chat with a debt relief expert about the options available to you today.
Eligibility criteria
Freedom Debt Relief generally works with specific types of debt and financial situations. To qualify for their program, you typically need:
At least $7,500 in unsecured debt (though some clients report being accepted with slightly less)
Demonstrable financial hardship that makes it difficult to repay debts in full
Regular income that's sufficient to make monthly program deposits
Primarily unsecured debts such as credit cards, personal loans or medical bills, as the program cannot help with secured debts like mortgages and auto loans, federal student loans, tax debts or court-ordered obligations like child support
Negotiation phase
Once you've accumulated sufficient funds in your dedicated account, Freedom Debt Relief begins approaching your creditors with settlement offers. When a creditor accepts a settlement offer, Freedom Debt Relief presents the proposal to you for approval before finalizing any agreement. Upon your approval, funds are disbursed from your dedicated account to satisfy the agreement. This process repeats for each enrolled debt until all accounts are resolved.
Costs and fees
Freedom Debt Relief's fee structure is performance-based, meaning you only pay when debts are successfully settled. However, these fees are significant, typically ranging from 15% to 25% of the total debt enrolled in the program.
For example, if you enroll $20,000 in debt and Freedom Debt Relief negotiates settlements totaling $10,000 (a 50% reduction), you would still pay between $3,000 and $5,000 in service fees based on your original debt amount. These fees are not collected upfront but are incorporated into your monthly program deposits and deducted as each debt is settled.
There is also a one-time fee of $9.95 to set up the dedicated savings account and a monthly fee of $9.95 that covers account servicing.
Program timeline
The Freedom Debt Relief program typically spans 24 to 48 months, with the exact duration depending on several factors, including:
The total amount of enrolled debt
How much you can afford to deposit monthly
Creditors' willingness to negotiate
The strategic timing of settlement offers
Most clients see their first settlement within four to six months after enrollment, and the company generally aims to settle all enrolled debts within 36 months. However, some programs may conclude sooner or extend longer.
Freedom Debt Relief pros and cons
There are a few potential upsides and possible downsides to consider before enrolling in a debt settlement program with Freedom Debt Relief.
Potential benefits
The program can substantially reduce your total debt obligation, often by 30% to 50% before fees.
Having professional negotiators handle creditor communications can improve the chances of a successful settlement.
Enrolled debts are often resolved within two to four years, which is much faster than making the minimum payments.
It offers an alternative to bankruptcy
Potential drawbacks
There could be severe damage to your credit score as your accounts become delinquent, get charged off and are ultimately settled for less than the full balance. These negative marks can remain on your credit report for up to seven years.
The program also involves considerable costs, with a significant portion of your monthly program deposits going toward fees.
Creditors may choose to sue
Company ratings
Freedom Debt Relief receives positive reviews overall across consumer platforms.
On Trustpilot, the company has over 46,000 reviews and maintains a rating of 4.6 out of 5.0.
The Better Business Bureau gives Freedom Debt Relief an A+ rating.
The bottom line
Freedom Debt Relief offers a potential solution for those who are struggling with their unsecured debt and want to avoid bankruptcy. The company has an established track record of successful negotiations and has helped hundreds of thousands of clients reduce their debt burdens over the past two decades. However, debt settlement through Freedom Debt Relief comes with significant trade-offs, so before enrolling, carefully consider whether this company and its programs fit your needs.
If you decide Freedom Debt Relief is right for your situation, thoroughly read all agreements, understand exactly how fees are calculated and maintain realistic expectations about the timeline and outcomes. And, remember that debt settlement should be viewed as a serious financial intervention, not a quick fix, to help regain control when other options have been exhausted.