Freedom Debt Relief Review

Wonder how to get your debts relieved, whom to go to, how to start off with Freedom debt relief? Have a look at your review of Freedom Debt Relief in this article.

Posted by Sharan Kumar on 5th April 2019

Freedom Debt Relief Review

So Freedom debt relief is one of the top choices that we'd recommend in the terms of debt settlement companies. It has us impressed in terms of the quality of the resources and the customer service it has to offer, which also includes the client dashboard it provides to the clients. It does not offer personalized service and it also charges fees on the higher side of the spectrum for the number of debt settlement companies that we have reviewed.

In today's world Freedom Debt relief is one of the largest debt settlement companies in the U.S. They have been in operations since the year 2002, it is a branch of the Freedom Financial Group, which is also into offering debt consolidation loans through their FreedomPlus program. 

Table Of Contents 

Numbers Topics
7 Conclusion

Is Debt Settlement a Good Idea?

We caution that debt settlement should be your last option if you are struggling with debt. So proceed with caution as the following reason will explain why.
The service for debt settlement is costly. Debt settlement will definitely destroy your credit.

There is no guarantee that you will be able to resolve your debt for much less than what is owed. The debt settlement industry which includes Freedom Debt Relief has faced several state and federal law enforcement repercussions. The consumer financial protection bureau has sued Freedom debt relief multiple times for the reasons stating that they have deceived the consumers. 

Freedom Debt Relief at a glance

  • Minimum debt required $7,500
  • Typical debt $25,000+Fees 18% to 25% of enrolled debt

  • Time frame Two to five years

  • Average time frame Three years, 10 months

  • Savings estimate 20% to 35% after fees

  • What to know about Freedom Debt Relief

Resolution in debt settlement is not a sure shot - 

To be able to succeed in settling all of your debt is somewhat out of your control. Some of your lenders will not negotiate with the debt settlement organizations and may sell the debt to a third party collection firm or a debt buyer instead. Freedom mentions that it deals with the third party and might coach the clients to settle directly with the creditors.

Although, according to some report by the center for responsible lending, consumers are required to continue with a debt settlement program for as long as possible or until at least two-thirds of the debts that they enrolled are settled for them to benefit from the debt settlement program in the end. Freedom's customer requires an average of about three years and ten months to be able to finish its program.

The prosecutions regarding Freedom - 

Freedom usually promotes its own team of professional debt settlers that guide their customers through the debt settlement process and negotiate with the creditors on their behalf. But in the year 2017, the company was sued by the Consumer Financial Protection Bureau or CFPB for short, which said that Freedom allegedly charged people fees without actually settling their debts as they had initially promised, and also made them negotiate their own settlements and then misled their consumers about the fees it was charging.

The CFPB said that Freedom allegedly told its consumers that it would negotiate all their debts even when they knew that it could not do so with creditors that have a strict policy against the same, such as American Express, Chase and Discover, in accordance with the lawsuit. Another claim also mentioned that Freedom allegedly charged fees to the customers who tried negotiating with the creditors directly.
Although Freedom completely denied the Charges in its statement that said - "The overarching assertion that we cannot and do not settle client accounts with key creditors is simply not true".

Client feedback on Freedom - 

Although Freedom has an A- rating at the Better Business Bureau, it also has received more than 350 customer reviews which are negative in aspect about Freedom in the past couple of years, including complaints that talk about problems with its service and issues with billing and collection. A competitor, National Debt Relief, had in the same time frame about 80 complaints.

Uncertainties involving Debt settlement - 

We believe that debt settlement must be reserved as a last resort for those that are delinquent or who are struggling to keep up with the minimum payments on unsecured debts. The risks ad drawbacks associated with debt settlement include the following but isn't limited to them

It most definitely will hurt your credit - Since you are required to immediately stop making payments on any outstanding debts to enter a debt settlement program, late payments will be reported on your credit reports and your credit score will tank significantly, which is most probably affect your future applications for any sort of credit and even your employment. Accounts that are delinquent stay on your credit report for up to seven years, as do accounts that are charged off by the lenders.

There is growing of fees and interest - 

For the entire period that you are enrolled in the debt settlement program, you have your fees and interest that accumulate and then get capitalized sometimes, you will also accumulate additional interest and late fees on your debt. Negotiations usually do not begin until you have saved a decent enough amount that will suffice to make a reasonable offer to the creditors, which could usually take several months.

If you fail to stay on the program long enough to complete it, or if Freedom fails to negotiate a settlement, you might actually end up struggling to pay off a much higher balance than you started off with and also suffer paying some extra fees in the form of late fees and more.

You might still hear from the debt representatives - 

This is because you have stopped paying your accounts and you might even receive aggressive collection attempts from them or even a couple of lawsuits from the creditors. Freedom mentions that it encourages its clientele to redirect all the communications from the creditors towards the company.

Any debt that is forgiven can be taxed - Since the IRS considers the forgiven debt as a taxable source of income, it is possible for you to owe taxes on the amount of debt that you have been forgiven and you no longer have to pay after settling it down. Some creditors might send you a Cancellation of Debt form 1099-C. Although one exception is that if you are insolvent (are stuck with more liabilities than assets) at the time of settling the debts with your creditors.

We suggest you speak to a tax professional or a lawyer for further guidance which is highly recommended. 

So How does Freedom debt relief operate?

How do you qualify - 

Freedom usually works with customers who are struggling with high debt from medical bills, private student loans, credit cards, personal loans, and other sorts of unsecured debt. You are required to have a current debt balance which is totaling over $7,500 to be eligible for their debt settlement. They recommend that you enroll any credit cards that have a minimum balance of $500 or more.

Just like other debt relief companies, Freedom is unable to help its clients with debt that involves any collateral, such as a mortgage or a car loan. It also is unable to address debt that involves federal student loans.
Normally a new client has debt that is anywhere above $25,000 which is unsecured and is spread over at least eight accounts when they first come over to enroll with Freedom according to them, says the company's co-president Sean Fox. This amount can range anywhere between $7,500 to over $100,000 and sometimes have clients with over 20 credit accounts according to him.

Freedom debt relief is currently not available to borrowers that reside in the following states, Maine, Mississippi, New Hampshire, New Jersey, North Dakota, Oregon, Connecticut, Georgia, Hawaii, Illinois, Kansas, Rhode Island, South Carolina, Vermont, Washington, West Virginia, and Wyoming.

The manner of debt settlement - 

The process at freedom is typically similar to most other companies that are involved in debt settlement and usually follows along these lines

Once you enroll, you are made to stop the payments to your creditors. You instead are required to open a separate savings account which is yours to control, into which you will be making monthly deposit payments. Freedom works along with clients and decides the amount that is to be transferred each month into the dedicated savings account. This amount is based on your ability to pay and the total amount of debt that you enroll with in accordance with the company.

When you stop making payments to your creditors it means that you become a delinquent on those accounts, which also leads to you accumulating late fees and interest charges, also your credit score will take a hit. Delinquent accounts will linger on your credit report for a term of up to 7 years.

After your savings account gathers enough money, the company on your behalf starts negotiating with each individual creditor in an effort to get them to take an amount that is less than what you initially owed. The idea is that after many months of non-payment, the creditor will be urged to take the sum that is lower rather than gambling not getting anything at all.

If the creditor decides to take the lower settlement amount, you will pay the creditor, either a wholesome or in installments, from your savings account. You will also be required to pay a service fee to Freedom debt relief for the services it has offered to you.

The cost of this manner -

By the law, Freedom is unable to charge an upfront fee for the services it offers, but it rather collects fees after each debt that it settles. The fee is based on the amount of debt that you enroll with and usually ranges anywhere between 18-25%. Although fees may sometimes vary depending on the state in which you live, this is according to company sources.

For example, a customer who settles a $5,000 credit card debt for about $3,000 might have to pay anywhere between $900 - $1,250 in favor of freedom for its services.
There is also a one time fee of $9.95 for the purpose of setting up a special account and a monthly fee of the same amount which covers the servicing of the same.

The time period for this is - 

The time period for this process to go through is anywhere between 24-48 months, which is about the same as the industry average. While this might be putting some of you off in the sense that it looks like quite a bit of time. Keep in mind that some companies will take anywhere between 5-7 years.

You should also keep a mental note that most companies that promise a quick relief for resolving your debt are the companies that you need to be careful with and also probably is best to avoid them. Although debt consolidation might be able to help ease this debt burden of yours it is not such a simple or a quick fix, it will require your dedication over a period of time for it to turn into a success.

So to put things simply

  • You are to put money into an insured FDIC deposit account that is dedicated for this purpose and it can be accessed by you.

  • Freedom Debt Relief will do an analysis of your debt and come up with a negotiation strategy.

  • Once you have enough money in the account and the strategy is settled upon, Freedom debt relief will begin negotiating on your behalf by talking to the creditors that you currently owe.

  • The creditors and Freedom debt relief will come up with a settlement that offers you some amount of savings.

  • You are given the choice to either choose or reject this settlement that you are presented.

  • If you approve of this, it is then paid completely, the creditor then reports the same to the credit bureaus. 

Freedom Debt Relief vs any other options

Considering debt settlement should be the last thing that you take out as an option after you look at every other option that is possible which includes but not limited to the following  - Debt management plan This a good option for those with a steady income to repay any credit card debts within a period of three to five years. You will pay a nonprofit credit counseling agency to consolidate all your debts into a single monthly payment which will be at a reduced rate.

Debt Consolidation 

This is an option to consider because with it you will transfer multiple debts into a single new debt via a balance transfer credit card, a debt consolidation loan or home equity or a 401K loan. The new debt might carry a lower interest rate than all your old debts, which will potentially help you pay off your debts faster.


Bankruptcy is a good option which can help you resolve your debt under the protection of a federal court, and it will most probably erase most of your debts in a time period of about three to six months. If you are delinquent on a debt, it will mostly stop the calls from the collectors and the lawsuits against yours. Your credit will take a major hit though, as it was with debt settlement, but then again research states that credit scores tend to go back up after about a year.


Debt SettlementHere you are able to just pick up the phone and call your creditors up and negotiate with them yourself. As with using a debt settlement company, success does seem to be guaranteed, but if successful you could save a ton of time and a lot of money in the ways of fees and the time it takes for the debt settlement company to get it done in your favor, it also would save your credit scores from tanking. 

What are the benefits and drawbacks of Freedom Debt Relief?


It becomes less of a hassle to track your progress. You are able to check on your progress through your online dashboard.

You get very helpful customer service. Customers have high regard for the customer service team for their helpful answers to the questions regarding the debt relief process.

It has helped in setting industry standards. Freedom debt relief is one of the founding members of the American Fair Credit Council, which is the one that standardizes the industry practices.

It has also had an impact on establishing the Federal Trade Commission's rules which involve the banning abusive debt settlement practices in the year 2010.


You are a higher risk of being sued. Former customers have mentioned that they have been sued by their creditors as a result of them stopping their payments for them to being able to save money to begin making negotiations in order to have a debt settlement.

The program might not take as long as it might be advertised or showcased initially and this is one of the major complaints that customers seem to have, which means that you might need to be ready to stay much longer than you expected to stay. On average, it is said that the program might last anywhere between 2 to 4 years.

Also, debt settlement is not a guaranteed deal. There is always the risk that your creditors will refuse the deal and not allow you to settle the debt.

It is not available in all the 50 states. Freedom debt relief operates in about 33 states and three territories and also Washinton, DC where their debt settlement services are permitted. 


Freedom debt relief is a much-appreciated company and well reputed and they value this which is evident from the accreditations that they have taken the effort to attain. The company is accredited by both the IAPDA and the AFCC. Although neither of them is a government agency, they both work along the debt relief industry to provide security to the customers.

The IAPDA provides wholesome training and some certification courses to the debt arbitrators so as to help them keep the standards or the FTC regulations up while they deal with clients and use the best practices in terms of negotiating the debts. The AFCC gives out third-party surveys of companies that deal with consolidation so as to make sure they uphold the FTC legally.

So finally, Those borrowers that are deep in debt should prefer talking to their creditors individually so as to figure out if they have any plans for those cases of hardship which might allow them to reduce the payments that are to be made to them. If you are being called by collection agencies, you should try to negotiate a reduction in the principal, which is usually what a debt settlement company promises to do for you. If you are successful you might be required to just pay taxes on the amount that will eventually be forgiven.

If you are not able to handle the negotiations with creditors on your own, you might be better of finding a creditor counselor through the National Foundation for credit counseling, at, or by calling up their number which is 800-388-2227.

If neither of those work then you might be better off by declaring bankruptcy. Contact the American Bankruptcy Institute ( or the National Association of Consumer Bankruptcy Attorneys ( to find an attorney who will be able to help you. 

Freedom Debt Relief Review FAQs

How does freedom debt relief affect your credit?

If you are not able to get rid of your debts by following a strict and aggressive payment timeline, getting your debt consolidated into a single one or by using certain credit counseling services, you will have two principle debt relief options -

  • Firstly, debt settlement where you stop payments and save up to ask for a lower amount to be taken and the rest forgiven.

  • Secondly, declare bankruptcy and hopefully have your debt forgotten in a short period of time after. But both of these methods of debt relief will affect your credit score majorly.

What percentage does freedom debt relief charge?

Usually, Freedom will negotiate a reduction of about 45% and proceed to charge you anywhere in the range between 15-25% of the debt that you have totally enrolled in within the first place. It is also very important for you to make a note that these fees or on top of the settlement amount that you eventually pay your creditor.

Can you quit Freedom Debt Relief?

You might be able to negotiate with your creditors on your own or use a debt relief program such as Freedom debt relief to help you settle the debt you owe. During the debt relief process, you usually stop making payments to the creditors and start saving up money in a separate account that you will eventually use to settle your debt.

What's the best debt relief program?

Some of the best debt settlement companies in the year 2019

  • For Customised debt - DMB Financial

  • For Different Types of debt settled - National Debt relief

  • For Lowest fees charged - Pacific Debt Inc

  • For Flexible Program Length - Freedom Debt Relief

Will debt collectors give me a call?

There exist federal and state laws that are designed just for situations like these called collections harassment, but clients tend to experience at least some of these collections calls. Our goal is to make sure your creditors call freedom debt relief and not you instead. 

Should all my credit cards be included in the program?

In case you have a single card that is low on balance that you are able to pay quickly and zero it down, you should hold onto it for emergencies. The program would not usually work if you do not enroll all of your high balance (anything greater then $500) credit accounts. Since open credit accounts will make it difficult to negotiate as the creditors will see you are settling on some accounts but not some others.

Will it be alright to negotiate on my own?

Yes, it is definitely alright. You could also do the taxes and repair involving your car, but most people would rather leave them to professionals. The Freedom Debt Relief team are a group of specialists who resolve an average of $288 million in debt every month. The knowledge and experience of doing this for so many years put them in a strong position to get into talks with the creditors and argue for the best settlement that is possible.

Will I owe taxes on my forgiven debt?

Since the debt that is forgiven is considered as taxable income by the IRS, you will be expected to pay taxes on the amount that is forgiven at the end of the year. IRS form no 982, reduction of tax attributes due to discharge of indebtedness, might be able to get you off the hook on this one. Please get in touch with your tax adviser to discuss this issue further ahead.

How much of a percentage can you settle credit card debt for?

Although this number depends on your creditor, how much you owe, where you live, and many such factors. With over 15 years of experience in the debt settlement arena. Freedom Debt relief should be able to settle your debt for as low as 50% of the amount that you owe in many of the cases or sometimes if you are lucky for even less. It is also important for you to understand that this differs from creditor to creditor and the amount that they settle on can vary.

Is it guaranteed that the debt will be settled for a certain percentage?

Not really, since every single case is a negotiation, there is no guarantee as to how those negotiations will go. Furthermore, the success of these negotiations is majorly dependent on your ability to save up as much as you can for the duration of the program every month.