Best Debt Settlement Companies

Freedom Debt Relief (FDR) has been in the debt settlement industry for over 15 years and has resolved over $15 billion of debt. Additionally, it is a founding member of the AFCC. The company has an impressive number of experts, too — over 550 certified debt consultants and over 200 debt negotiators.

Freedom Debt Relief will negotiate a minimum of $7,500 in unsecured debts, though that amount varies by state. Unlike some of the other debt settlement companies, Freedom Debt Relief can sometimes help settle business and private student loan debt. This is evaluated on a case-by-case basis.

Clients pay no fees until after they’ve authorized a settlement and have made their first payment as part of that settlement. The fees range from 15% to 25% of your enrolled debt, and your specific fee percentage is determined by the state you live in.

There is an online dashboard that allows you to track your progress at any time. Plus, you can contact customer service seven days a week.

CuraDebt has been helping customers with credit card debts, personal loan debts, business debts and more since 2000. A special service that CuraDebt offers is tax debt relief. CuraDebt says that its enrolled agents (EAs) can help resolve a wide range of tax debt amounts.

CuraDebt charges a fee that’s a percentage of your enrolled debt, ranging from 16% to 25%. The higher your enrolled debt amount, the lower your fee percentage. Additionally, it does not charge any upfront fees, nor does it charge for its free counseling session.

CuraDebt requires a low debt minimum of only $5,000, though that varies depending on what state you live in. While the company is available in all 50 states for either standard debt relief or tax debt relief, it offers only one or the other in certain states. For example, tax debt relief is not available in Pennsylvania, and standard debt relief is not available in Connecticut, Hawaii, Idaho, Kansas, Louisiana, Maine, Montana, New Hampshire, Nevada, Oregon, South Carolina, Tennessee, Utah, Vermont or West Virginia.

New Era Debt Solutions has helped clients settle over $275 million of debt since it was founded in 1999. It offers a free debt analysis and does not charge upfront fees. Fees can range from 14% to 23% of the original debt amount you enrolled in the program. While New Era Debt Solutions is available in most states, it does not operate in Iowa, Maine or Oregon.

New Era Debt Solutions can help clients settle debts from credit cards, department store cards, medical bills, personal loans and private student loans, among other types of unsecured debt. Its clients have historically completed their debt settlement programs in an average of 27.73 months.

National Debt Relief has helped over 400,000 individuals settle unsecured debt since 2009, including some private student loan and business debt. It can also help with repossessions, collections and medical bills. National Debt Relief claims to have established relationships with over 10,000 creditors. Eligible candidates should have at least $10,000 in unsecured debt.

The company is transparent about how much money a client can save, and clients pay no fees until their debts are settled. The average client can save 50%, but after National Debt Relief’s fee, that amounts to a savings of about 30%. Most clients will see debt relief between 24 and 48 months if they stick with the program.

You can request a free consultation online. There are no upfront costs, and there’s no cancellation fee. National Debt Relief hosts free calculators on its site to help you manage your money, and it also hosts a large library of educational personal finance resources.

Based in San Diego, California, Pacific Debt Relief has settled over $300 million in debt. To qualify, customers must have at least $10,000 of unsecured debt. Payday loan debts and business debts are eligible. It can also settle some student loan debts. Its fee can be as low as 15% of your enrolled debt.

Pacific Debt Relief is available in 29 states and in Washington, D.C. On its website, you can find specific debt collection information and laws for each state.

Pacific Debt Relief is clear that debt settlement is not the right move for everyone and that enrolling in its program can hurt your credit score, send debt accounts into collections and have tax ramifications.

CountryWide Debt Relief works with debt from credit cards, payday loans, installment loans, medical collections, deficiency balances on auto loans and personal lines of credit. Its programs take 24 to 60 months to complete.

The company charges a fee of 25% of enrolled debt, and it says that dedicated customers who go through the program can expect to save 25% to 30% on their debt after its fee.

Unlike many other debt settlement companies, CountryWide also refers debtors to partner lenders offering debt consolidation loans.

Debt settlement is when a creditor agrees to settle a debtor's balance for less than the full amount owed. The debtor makes a lump-sum payment (or several payments) amounting to a portion of their debt owed, and the creditor agrees to forgive the remainder of their debt.

» READ MORE: Debt settlement vs. bankruptcy

You can attempt to settle your debts independently, or you can hire a debt settlement company to negotiate with your creditors on your behalf. If you’re current on your bills, the debt settlement company will typically advise you to stop paying your creditors, which will theoretically motivate the creditors to settle the debts.

Instead of paying multiple creditors individually, you’ll make one monthly payment to a savings account set up by the debt settlement company. Your funds can grow in that account until you have a large enough sum to pay off your debts per the terms negotiated by the settlement company. The whole process typically takes 24 to 48 months to complete.

Debt settlement companies may start by negotiating your smallest debts first while leaving larger debts to accrue interest or late payment fees, so make sure you work with your debt settlement firm to prioritize debts instead of letting the firm choose on its own.

Your credit score will likely take a hit during this process, and you’ll want to keep that in mind if you plan on taking out a major loan during the repayment period, like a mortgage or auto loan.

Note that most debt settlement companies will only negotiate unsecured debts, like credit card balances, private student loans or medical bills. It’s important that you understand if your debt is secured or unsecured and whether or not it is eligible for settlement.

There are several alternatives to using a debt settlement company. Some of the most common ways to resolve debt issues include the following:

» MORE: What is debt collection and how does it work?

While debt settlement programs have many benefits, it’s important to understand their drawbacks as well. Make sure to bring up any potential concerns or risks with the debt settlement firm before committing to a settlement plan.

To make our choices for the top debt settlement companies, we collected 25 individual data points from 18 companies, including over 83,000 reviews and overall ratings from ConsumerAffairs readers submitted between 2019 and 2022. We then used this data to examine the factors that have the most impact on borrowers:

• Debt minimums: Most debt settlement companies require a minimum debt amount to enroll. Those that were transparent and required a lower minimum debt to enroll (for example, $5,000 versus $10,000) were given more consideration for our top picks.
• Fees: We looked at fee structure, giving higher weight to companies that are transparent about their settlement fees.
• Types of debts serviced: We gave greater consideration to companies that work with multiple types of debts, including credit card, medical, personal loan, business and tax debts.
• Availability: We prioritized debt settlement programs that are available in a large number of states.
• Program completion time: We examined how long it will usually take a debtor to complete a given debt settlement program. Most companies fell into the same range (typically 24 to 48 months), so this was not factored in as much as other variables.
• Accreditation: Professional accreditation is an important factor to consider when deciding if a debt settlement company is legitimate. We prioritized companies that are accredited by at least one national organization.

All of our top picks are forthright about their fees, service multiple types of debts, are available in most U.S. states and have relatively low debt minimums. They also have other appealing features, such as satisfaction guarantees, accreditation and accessible customer service.

Since customer feedback is a critical indicator when evaluating companies, this was an important consideration when selecting our top picks. However, for those companies we considered that do not have ratings on ConsumerAffairs, there were other variables that made them stand out as good options for debt settlement, and we factored those variables into our assessments.

Before picking a debt settlement company that fits your needs, make sure to do your due diligence to determine if the company is legitimate or potentially a scam. Read customer reviews, browse the company’s website and check if it has any legal actions against it (including for what and how recently). If a company asks you to do anything potentially illegal, don’t work with it. If you are not careful with debt settlement, you could ruin your credit and wind up in a worse financial situation than when you started.