Debt relief is a proven way to get out from under insurmountable debt. The strategy has helped scores of people regain their financial footing. However, in an industry that has some bad actors, it’s important to choose a debt relief agency that will look out for your best interests. Enter industry leader Freedom Debt Relief.
What is Freedom Debt Relief?
Is Freedom Debt Relief a scam? Hardly. Since 2002, the company has resolved more than $10 billion – that’s billion with a “b” – in debt for more than 650,000 customers. It has done so by getting creditors to accept less than what clients owe to settle their debts.
How Does it Work?
At an initial free consultation, FDR assesses your situation and establishes a personalized debt resolution plan. How long it will take to settle your accounts hinge on factors including how much you owe and how much you are to pay monthly.
Rather than paying your creditors directly, you’ll deposit funds into a savings account you control, and from which your settlement funds will be drawn to support your creditor agreements. Such accounts serve as inducements for said creditors, since if you file bankruptcy, they realize they get zilch.
Ultimately, you could save between about 15% to 35% of the amount owed.
Is the Process Transparent?
Yes. You can even track your progress at any time through what’s called a client dashboard. If you have any questions or concerns, you can always contact a customer service rep.
What Kind of Debt Does FDR Handle?
You must have at least $7,500 in outstanding balances from credit cards, personal loans, medical bills, private student loans, or other kinds of unsecured debt. The company does not help with secured debts – those that involve collateral – such as mortgages or car loans unless the attached asset has been forfeited or repossessed.
How Long Does the Program Take?
As we say, that depends on your situation. In general, though, the program takes about two to five years to finish. The chief factor is your payment size. Many clients have their first debt settled within six months.
How Much Does FDR Charge?
Unlike with some unscrupulous companies, there’s no Freedom Debt Relief scam here. As required by law, FDR only charges you after an account is settled. Depending on the state in which you live, fees range from 18% to 25% of the enrolled debt.
How Effective is Freedom Debt Relief?
Due to FDR’s size and years of experience, it can often package deals together to garner the optimal settlement percentages possible. Doing so is more efficient all around and saves the creditors, and you, money.
What are the Downsides?
Freedom Debt Relief is honest with clients about how the process of debt relief – which is not exclusive to FDR — can temporarily affect your credit score, which is likely not stellar to begin with. Most clients understand that the advantages of erasing debt faster and at a lower cost will have a short- and middle-term impact on their credit history. They also know that their credit will not be robust until their debt is cleared.
Freedom Debt Relief also informs clients that they may have to pay taxes on forgiven debt, but that it’s way better to pay Uncle Sam for $15,000, for instance, than to repay $15,000.
So, is Freedom Debt Relief a scam? To the contrary. In addition to its longevity and track record, FDR also helped found the American Fair Credit Council, established in 2011 to forge ethical standards for debt negotiation. It also partnered with the Federal Trade Commission to set rules that prohibit abusive debt settlement practices.