Freedom Debt Relief Review 2025

Business Insider

5 days ago

If you're struggling to make payments toward your credit card or loan debts, a debt settlement company like Freedom Debt Relief might be able to help.
According to the company, customers who complete the Freedom Debt Settlement program reduce their enrolled debt on average by 20% to 25%. However, the debt settlement process can be risky and has its own set of pitfalls, so it's not a quick solution.
Business Insider's personal finance team compared Freedom Debt Relief to the best debt relief companies and found it to be a strong option on the market with a Program Guarantee that provides a full refund if the settlement and fees exceed the original amount of debt owed.
Read on to see if Freedom Debt Relief is right for you.
Pros and Cons
With the exception of its refund policy, the pros and cons of working with Freedom are the same as working with any debt relief service.
Freedom Debt Relief Pros
Provides a full refund if the settlement and fees exceed the original amount of debt owed
Structured program to pay off debt
Financial education tools
Can be a bankruptcy alternative
Freedom Debt Relief Cons
Negative impact on credit due to missed payments and settled accounts
No guarantee that creditors will agree to the settlement amounts offered
Fees can be substantial
Could be tax implications on the forgiven debt
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Overview of Freedom Debt Relief
Freedom Debt Relief is a well-known debt settlement company that helps negotiate with creditors to reduce unsecured debt. By negotiating with creditors, Freedom Debt Relief helps clients struggling with financial hardship settle outstanding debt. The company handles most forms of unsecured debt and says it has helped over one million clients since it started operating in 2002.
There is a $7,500 minimum debt required to work with Freedom Debt Relief.
Based in Arizona, California, and Texas, Freedom Debt Relief offers services to consumers in 42 states. It does not offer services in Colorado, North Dakota, Oregon, Rhode Island, Vermont, West Virginia, Wisconsin, or Wyoming.
How Freedom Debt Relief Works
Freedom Debt Relief negotiates with creditors on your behalf to agree to a debt settlement: a (hopefully lower) amount your creditors will accept to consider the debt forgiven. Like any debt settlement company, Freedom can't guarantee that creditors will agree to any given settlement.
Working with Freedom is best for people in the following situations:
Significant unsecured debt: Carrying overwhelming credit card debt, medical bills, or other unsecured debts
High monthly minimum payments: Can't keep up with their debt obligations and struggle to make payments
Don't want to file bankruptcy: Want to avoid bankruptcy and are willing to accept a negative credit score impact
Key features of Freedom Debt Relief
Free Consultation
Working with Freedom Debt Relief starts with a free initial consultation to assess eligibility and discuss solutions. Potential customers list out all of the bills they would like to enroll in the debt settlement program. Freedom Debt Relief consultants walk customers through their credit report and recommend customized solutions.
Enrollment and Dedicated Account
Once you agree to the plan and the settlement amount, you will be given a dedicated online account to make monthly payments.
Negotiation With Creditors
Freedom Debt Relief will negotiate with your creditors on your behalf so you can settle for less than you originally owed.
Settlement and Closure
Once a settlement is agreed upon, you pay your creditors directly through that dedicated account. Once the settlement amount is paid, your account will be settled and closed.
Freedom Debt Relief Cost and Fees
Freedom Debt Relief does not charge fees for its debt settlement services until a debt settlement is reached and approved, and the first payment is made. The fee is based on the amount of the enrolled debt, not the settlement amount.
A fee of 15-25% of enrolled debt + $9.95 account sign-up fee and $9.95 monthly fee is typically charged. Freedom Debt Relief also offers a Program Guarantee that provides a full refund if the settlement and fees exceed the original amount owed. While it's uncommon for a settlement and fees to be more than you originally owed, this type of guarantee is rarely offered by debt relief companies.
Freedom Debt Relief Reviews and Ratings
The company has a customer rating of 4.6 out 5 stars on Trustpilot with over 46,000 reviews and an A+ rating with the Better Business Bureau.
Freedom Debt Relief has strong customer reviews. Still, there have been negative reviews and complaints from customers around the process and fees.
Common complaints were that customers did not understand the impact of debt settlement on their credit score and that the process itself was slow. This is a common complaint consumers have when working with debt settlement companies. It is important to understand that debt settlement programs will be reported to the credit bureaus and can impact your credit score.
In 2019, a lawsuit from the Consumer Financial Protection Bureau (CFPB) alleged that Freedom Debt Relief misled and wrongfully charged fees to customers. Freedom Debt Relief settled with the CFPB, agreeing to pay $25 million in customer restitution and penalties. In 2023, Freedom Debt Relief settled a class-action lawsuit that alleged it violated the Telephone Consumer Protection Act. The company agreed to a $9.75 million settlement.
Freedom Debt Relief Alternatives
Freedom Debt Relief vs. National Debt Relief
National Debt Relief also does not charge upfront fees; service fees range from 15%-25% of the debt enrolled. Like Freedom, it does not charge any fees until you start to see results. There is an eligibility threshold of $7,500 of debt to work with National Debt Relief (the same as Freedom), and the debt settlement process can be lengthy.
The main difference between the two companies is that National Debt Relief offers services in 46 states and Washington, DC — a slightly larger area of operation than Freedom.
If you live in a state served by National only, you'll choose National. Otherwise, you might consider Freedom for its suite of financial education tools.
Freedom Debt Relief vs. Pacific Debt Relief
Like Freedom, Pacific Debt Relief does not charge upfront fees. Service fees range from 15%-25% based on the amount of your debt and are rolled into your monthly payment, due only when you start to see results. You must have at least $10,000 in debt to work with Pacific Debt Relief, while Freedom Debt Relief requires $7,500. The average time of completion with Pacific is 24-48 months.
The main differences between Freedom and Pacific Debt Relief are that Pacific requires a higher minimum debt balance to enroll and operates in only 30 states.
For people in states served by Freedom only, the choice is clear. People living in states where both companies operate should still choose Freedom, which accepts smaller debts than Pacific.
Why You Should Trust Us
We rate debt settlement services like Freedom Debt Relief by taking into account the following criteria:
Accreditation by trade associations or organizations
Fee structures and disclosure
Number of years in operation
Money-back guarantees in cancellation policies
Read the full breakdown of how we rate debt settlement companies.
FAQs
Will Freedom Debt Relief affect my credit score?
Yes, a debt settlement program like Freedom Debt Relief will negatively impact your credit score due to missed payments and settled accounts that are reported to the credit bureaus.