Best Debt Relief Programs
Debt Settlement is generally a last resort for individuals who are heavily indebted and spiraling towards bankruptcy. However unpleasant as it may seem, debt settlement companies can be an effective route to bypass bankruptcy altogether and get you on the right track towards paying off your debts.
When you enroll with a debt relief company, you're first instructed to hand over the names of your creditors and the amount of unsecured debt you owe each one. They'll then contact the creditors on your behalf and work to negotiate the outstanding balance. In return for a large one-time payment, the creditors will pardon the remaining debt.
Best Debt Settlement Companies: What to Consider
Most often, credit card issuers will elect to collect a lump sum because they're fearful that you won't pay the existing balance. Take a look at the list of the top five debt settlement companies in the industry. The ideal debt settlement service will possess the following characteristics:
- High BBB Rating-The Better Business Bureau rates institutions on a variety of factors including customer satisfaction, business operations, and compliance with legal regulations.
- Fees Noted Upfront-Any applicable fees should be addressed upfront. If you're not provided this information automatically, ask for the terms and agreements in writing.
- Affiliations-These indicate an organization's certifications and involvement in other debt related sectors.
- Customer Support-Telephone or email support for questions and inquiries.
- Consultation-A free consultation prior to paying any type of enrollment fee.
What's Behind the Guarantee?
In general, be wary of any debt settlement service which guarantees results without shedding light on the risks associated with the process. Check the fine print and the terms of the agreement so that if the company is unable to come to an agreement with your creditors then you won't be liable for any fees. Also, keep in mind that your credit score will drop when you opt for debt settlement but in general it does go back up. Your primary goal in all this should be to eliminate your debt without filing for bankruptcy.
Who are the IAPDA and AFCC?
The International Association of Professional Debt Arbitrators (IAPDA) is an organization which provides training and certification to debt settlement companies in order to better advise and aid customers struggling financially. While the American Fair Credit Council (AFCC), the leading association of professional Consumer Credit Advocates, is designed to support individuals suffering from debt and credit issues. Both organizations promote ethical practices on behalf of consumers and advocate compliance with state and federal laws.
The Best Debt Settlement Companies
National Debt Relief Review
- Online budget calculator
- Creditor collection call log
- Array of online tools and resources
- No out-of-pocket fee
- Phone, email, live chat
- May be liable for entire balance
- Minimum $7,500 in debt to qualify
National Debt Relief (NDR) has been operating since 2007 and has been accredited by the Better Business Bureau since 2013. It's at the forefront of the debt management sector and offer debt settlement, consolidation and other services to reduce and eliminate your debt.
After enrolling, you'll be instructed to create an account in which you deposit a fixed amount each month. At that point, NDR will begin to negotiate a settlement with your creditors.
When your lenders agree on an amount, the money in the account will be used to pay off your debt and a portion will also be used to pay for the company's services. The assessed fee is based on your income, degree of debt, and several other factors.
I found National Debt Relief to be very upfront about the fees it charges, what you need to participate in, and what you can expect to save over other debt payment options. For example, the fee is usually 20% and you can typically expect to save about 30% off the total cost of your debt.
National Debt Relief is an accredited member of the American Fair Credit Council (AFCC) and International Association of Professional Debt Arbitrators (IAPDA). These organizations have strict regulations and require their members to act in accordance with all federal and state regulations regarding debt settlement.
National Debt Relief is also upfront about the potential pitfalls of settling and offers information and other options, which is a refreshing trait when it comes to debt settlement companies.
The biggest drawback about this company is that they require customers to have at least $7,500 in unsecured debt. Unsecured debt includes things like credit cards, personal loans, medical bills, collections, repossessions, and business debts. NDR is very clear that they cannot settle any secured debts like lawsuits, back taxes, utility bills, student loans, mortgages or home loans.
Although National Debt Relief can't make any guarantees by law, customers typically see results within 24 and 48 months of working with them. What's more, the company features a call log to record any attempts made by your creditors to contact you. Once you record the details of calls or letters, National Debt Relief will use the information to negotiate your settlement. It's also a clever way to keep track of any harassing calls that may be infringing on your personal rights. By documenting these instances, you'll be in a more desirable position to take action.
On the whole, National Debt Relief is a top notch debt settlement firm. They've received 5 stars from Top Consumer Reviews and are adamant that they never charge upfront or ongoing fees for their services.
Freedom Debt Relief Review
- A-rating by the Better Business Bureau
- Easy website navigation
- Free consultation
- Individual advisor
- Online registration/management
- No live chat
- No IAPDA affiliation
Freedom Debt Relief offers the basic services you would expect with a debt settlement firm-online registration, personal advisor, free consultation, telephone-but has received some unfavorable reviews on the web.
That said, it's tough to find a debt settlement company that doesn't have some unsatisfied customers. It's simply the nature of the beast.
Freedom Debt Relief has a well structured and easy to navigate website. Access to their contact information, blog, and service charges are just a click away, which is a big plus. Since many other competitors have difficult to navigate websites or websites with scant information, Freedom Debt Relief's site works in its favor.
The settlement process with Freedom Debt Relief is simple.You'll be instructed to set up a trust where you'll deposit a specified amount per month. Meanwhile, the staff at FDR will negotiate a lower settlement with your creditors.
According to the company's site, they get average settlements of 42 cents on the dollar. What's interesting is that they're one of the few companies to make a specific claim like this.
The biggest advantages about working with Freedom Debt Relief is that you'll only be charged fees on resolved debt. The company acts as your credit advocate, and there's the potential to reduce the total amount of debt you owe.
In terms of industry ratings, Bestcovery.com rates Freedom Debt Relief in the top 5, Consumeraffairs.com gives them 3.75/5.0 points and they have some stellar reviews on Yelp! Furthermore, they boast an A rating from the Better Business Bureau.
CuraDebt Debt Settlement Review
- Free consultation
- Personal debt negotiator
- Online registration/management
- Money-back guarantee
- Blog resource
- Not available in 13 states
CuraDebt was founded in 2000 with the intention to provide financial solutions within the debt relief sector. In terms of debt settlement, CuraDebt's in-house program costs 20% of the total entered debt. It also offers an average savings of 40%.
CuraDebt has a money-back guarantee to serve its customers. The company is in good standing with The American Fair Credit Council (AFCC) and the International Association of Professional Debt Arbitrators.
As far as CuraDebt's website and support center goes they do offer telephone, email, and live chat services. It also has a credit restoration program to help those who complete their debt settlement program.
The last major point to take into consideration is its online resources. Unlike National Debt Relief, CuraDebt doesn't have a trove of financial tools on its website but it does sponsor a blog with valid financial advice.
What really stands out about CuraDebt debt settlement program is its low service fee and the assortment of awards with consumer ranking groups.
Accredited Debt Relief Review
- Available in 49 states
- Accredited by BBB, AFCC, and IAPDA
- No fees until settlement
- Free consultation
- Lower than average savings
- Minimum debt of $7,500
Accredited Debt Relief is able to provide debt settlement services to customers in 49 states. Once you sign up for the program, the company begins to negotiate with your creditors. Often,the negotiations begin about a week after you start the program. It usually takes between six and nine months for an agreement to be reached.
The company charges fees that are around the average for the industry. You only pay fees at the end of the program, not upfront. Although working with Accredited debt relief will save you money, the average savings of 25% is a bit lower than other companies' average.
Accredited Debt Relief offers more than just debt settlement to customers. It also provides credit counseling, debt consolidation and assistance with bankruptcy.
- BBB and AFCC accreditation
- Telephone & email support
- No upfront fees
- No live chat
- Website has some resources, but is skimpy on information
- $10,000 debt minimum
If you have a significant amount of unsecured debt, ClearOne can help you settle it. The company has helped clear $1 billion worth of debt since it started in 2007.
It only works with consumers who have at least $10,000 in debt, so it is not an option for people who owe a few thousand or so. Although the company is clear that it doesn't charge fees upfront, they doesn't give you any idea of what their typical fees are.
ClearOne also doesn't provide much information about what the average savings is for people who have worked the company. It's also not upfront about which states it operates in.
If you have a lot of debt, ClearOne might be a good option for you. The company is accredited by the AFCC and BBB. It offers free consultations, so it can be worth it to reach out and see what ClearOne can do for you.
Best Debt Relief Programs Recap
Debt settlement is not an appropriate solution for everyone. The aforementioned companies explicitly state on their websites that they do not guarantee any particular results and in the event that the debt settlement company cannot come to an agreement with your creditors, you may be liable to repay the entire amount. Furthermore, be wary of any company which tells you to stop communicating with your creditors but doesn't explain the severe repercussions. Carefully review the advantages and disadvantages once more before enrolling in a program.
Best Debt Settlement Companies FAQs
What is debt settlement?
Debt settlement is a process in which an individual's debt is reduced by negotiating with creditors on a reduced balance to be paid in full. This can be done by convincing creditors to forgive debt that is a result of accumulated interest. This is done with the idea that lenders would rather forgive some debt repaid than none, especially as a result of bankruptcy. Debt settlement is typically reserved for individuals who are facing bankruptcy and have no other available options. Some companies like National Debt Relief require clients to have a minimum debt in order to qualify. In this case, NDR requires at least $7,500. Once a settlement takes place, a debt settlement company will take a portion of the settlement as payment.
How do I select a debt settlement company?
When reviewing your options, check to see if the company is an accredited member of the American Fair Credit Council (AFCC) and the International Association of Professional Debt Arbitrators (IAPDA). You can also check the credentials of the people you are working with. Do they have a law degree or are they a certified financial advisor? The reason it's important for the organization to be accredited by these associations is because they have strict policies as to how they conduct business proceedings in relation to federal and state regulations. Although no company can legally make guarantees as to the nature of what they can do to eliminate your debt, customers have reported results within 1 to 2 years of working with them.