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Best Debt Settlement Companies

Profile picture of Barbara Friedberg
by Barbara Friedberg Personal Finance Contributing Editor

Debt settlement companies help consumers get debt relief through negotiating with creditors with the goal of lowering the total amount owed. Debt settlement is helpful for individuals with a large amount of debt who cannot make the minimum monthly payments and/or have no feasible way to pay off the debt long-term.

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Top Debt Settlement Companies

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National Debt Relief
Read 33538 Reviews

Debt is often reduced by as much as 50%, with most cases settled in 24-48 months. Fees vary between 18-25% of enrolled debt. No upfront fees. $10,000 minimum debt required. Offers debt settlement services, not a loan provider.

Freedom Debt Relief
Read 14534 Reviews

Specializes in debt settlement services only. Debt can be settled in 24-48 months, and fees range from 15-25%. $15,000 minimum debt required. Track progress 24-7 via online dashboard. No-risk debt-relief consultation offered.

CreditAssociates
Read 109 Reviews

This debt settlement company helps clients eliminate debt in as little as 24-36 months. They use state-of-the-art software and a team of experts to negotiate your debt with your creditors. Settlement only, not a lender.

Accredited Debt Relief
Read 429 Reviews

Minimum debt required is $10,000. Average debt settlement program takes 2-4 years. Multiple plans available, and no fees are required until settlement is reached. Money-back guarantee. Debt settlement only, no loans available.

Century Support Services
Read 450 Reviews

Settlement percentages average between 40%-60% of original debt. No upfront or hidden fees. Programs range from 24 to 48 months. No fee is collected until a settlement is reached. Access and authorize information 24-7 online.

CountryWide Debt Relief
Read 440 Reviews

$10,000 minimum required debt. Debt consolidation programs and loans take 12-60 months depending on affordability, and no fees are required until debts are settled. Flat 18% fee based on amount of debt owed at time of enrollment.

Pacific Debt Inc
Read 511 Reviews

$10,000 minimum debt required. Low monthly program payment and no upfront fees. Service fees vary between 15 and 25% of the total debt enrolled. Most results take 24-48 months. Offers debt negotiation, but not consolidation loans.

United Debt Counselors
Read 108 Reviews

United Debt Counselors is a debt settlement company that helps with credit card debt. They can reduce the interest you’re paying and may be able to negotiate a debt settlement this is much lower than your current balance.

Midland Credit Management
Read 211 Reviews

Dedicated to helping consumers resolve past-due debt. Discounts and payment plans available. Full account history available online. An interactive wizard provides tools and resources.

New Era Debt Solutions
Read 89 Reviews

Average debt reduction is around 47% with debts settled in three years or less depending on the pace at which the program is funded. Fees range from 14%-20% based on the amount of debt at enrollment.

Elite Financial Services
Read 28 Reviews

Minimum required debt of $5,000 required. Unsecured debts are settled in as little as 12-36 months depending on the monthly repayment amount. Free debt analysis. No fees until debts are settled.

Credit Solutions of America
Read 165 Reviews

Offers credit repair services for customers in several states. Month to month contracts start at $49/month and give customers a way to remove negative items from their credit report. Improvement takes around six months.

Century Negotiations
Read 11 Reviews

Specializes in settlement and negotiation for those with at least $5,000 in debt from credit cards, payday loans or medical bills. Also offers support for those facing collection calls. No fee charged until settlement reached.

CuraDebt
Read Reviews

Offers in-house debt relief services and counseling for those with $10,000 or more in unsecured debt. Fees generally assessed at 20% of debt enrolled. Does not assist with debt from home and auto loans or federal student loans.

Compare top debt settlement reviews

When it comes to selecting a debt settlement company, you’ll want to consider a few things: length of time in business, the company’s memberships and accreditations, customer satisfaction and overall transparency in doing business. The American Fair Credit Council (AFCC) sets the standard in debt settlement, so looking for an agency that holds a membership with them is a good place to start. Accreditation with the International Association of Professional Debt Arbitrators (IAPDA) is another good sign.

In selecting our top picks, we looked at the company’s accreditations as well as the credentials held by their staff, years of experience, terms of service, qualifying factors and overall customer satisfaction. We’re recapping our top picks below.

Best bankruptcy alternative
Accredited Debt Relief

Company nameContact
Accredited Debt Relief
LogoSummary
  • Debt minimum: $7,500
  • Repayment term: 12–48 months
  • Fees: 15–25% of debt

Types of debt settled: Accredited Debt Relief works with credit card debts, personal loans through banks or credit unions, private student loans, collection agencies and third-party debt buyers.

What we like: Accredited Debt Relief is focused on resolving debt obligations through debt settlement as an alternative to bankruptcy. They are accredited members of the AFCC and have a portfolio of thousands of settled accounts. You may appreciate the “proven results” page on their site, which provides mini case studies of settled debt. One such example shows Accredited Debt Relief settling over $20,000 in debt for around $6,000, or a savings of 70 percent.

What to consider: Accredited Debt Relief isn’t available in every state. Visit their website to see if you qualify for their service.

Best online tools
CreditAssociates

Company nameContact
CreditAssociates
LogoSummary
  • Debt minimum: $7,500
  • Repayment term: 24–36 months
  • Fees: Typically 15–25%.

Types of debt settled: CreditAssociates only works with unsecured debt.

What we like: According to CreditAssociates, they’ve settled over 1 billion dollars in debt for their clients. The company is a member of the AFCC. Like most debt settlement companies, they work with unsecured debt, which is most commonly credit card debt, medical bills and personal loans. The savings calculator on their website can help you estimate how much savings you can expect from working with the company.

What to consider: CreditAssociates requires a minimum of $7,500 in unsecured debt to enter their settlement program. While this is not uncommon, there are companies with lower minimums if you need them.

Most experienced
Freedom Debt Relief

Company nameContact
Freedom Debt Relief
LogoSummary
  • Debt minimum: $7,500
  • Repayment term: 24–48 months
  • Fees: 18–25% of debt

Types of debt settled: Freedom Debt Relief works to settle credit card debt, personal loan, medical bills and even some private student loans.

What we like: Freedom Debt Relief is a founding member of the AFCC. The company has resolved over $9 billion in debt for 600,000 clients. Clients have access to an online dashboard to stay up to date on the progress of their settlement 24/7. If you work with Freedom, there are no upfront costs, and you won’t be charged any fees until after a settlement has occurred.

What to consider: They do list a slightly higher than average starting fee of 18–25 percent, compared to the national average of 15 percent.

Best for credit card debt
National Debt Relief

Company nameContact
National Debt Relief
LogoSummary
  • Debt minimum: $7,500
  • Repayment term: 24–48 months
  • Fees: 18–25%

Types of debt settled: National Debt Relief can work with credit card debt, personal loans, installment loans, overdraft fees and business debts.

What we like: National Debt Relief is a member of the AFCC, the IAPDA and the U.S. Chamber of Commerce. Additionally, we like their dedication to maintaining a presence and good standing on independent review sites. This shows a dedication to customer satisfaction and a level of transparency about their practices that helps to instill confidence in their services.

What to consider: National Debt Relief can work with the majority of unsecured debts, and even covers a few secured debt types, but their specialty is in negotiating with major credit cards and banks.

Best account management
Pacific Debt

Company nameContact
Pacific Debt
LogoSummary
  • Debt minimum: $10,000
  • Repayment term: 24–48 months
  • Fees: 15–25% of enrolled debt

Types of debt settled: Pacific Debt can settle credit cards debts, personal loans, payday loans, medical bills and balances on repossessed vehicles.

What we like: Pacific Debt charges no upfront fees, and you’ll only pay for their services if they’re successful at negotiating your debt. They are an accredited member of the AFCC and BBB. Pacific Debts assigns each client a personal account manager to be your advocate throughout the process and gives you a single point of contact.

What to consider: Pacific Debt is not licensed in all states. As part of the settlement process, Pacific Debt does acknowledge that your credit score may drop, but this is not uncommon for any debt settlement provider that requires you to close open lines of credit. A good debt relief company will help educate you on ways to rebuild your credit after this process, so be sure to ask about this when meeting with your credit counselor.

Best for large debts
Countrywide Debt Relief

Company nameContact
Countrywide Debt Relief
LogoSummary
  • Debt minimum: $10,000
  • Repayment term: 12–48 months
  • Fees: 18% of enrolled debt

Types of debt settled: Countrywide Debt Relief works with credit cards, payday loans, installment loans, medical collections, deficiency balances on auto loans and personal lines of credit.

What we like: Countrywide Debt Relief is an accredited member of the AFCC and has a number of case studies on their website to back-up their proven results claim of helping thousands of people resolve millions of dollars in debt.

What to consider: To qualify, you’ll need to have $10,000 or more in unsecured debt. While Countrywide does have accreditation through the AFCC, they are not an accredited member of IADPA like some of the other companies on our list.

Lowest debt requirements
Century Support Services

Company nameContact
Century Support Services
LogoSummary
  • Debt minimum: $2,000
  • Repayment term: 24–48 months
  • Fees: 18–25% of enrolled debt

Types of debt settled: Century Support Services works with unsecured debt types.

What we like: At $2,000, Century Support has lower minimum debt than most companies on our list, making it an option for those with less debt who still desire professional assistance. The company is accredited by both the AFCC and IAPDA.

What to consider: With a founding year of 2012, Century Support Services is the youngest company on our list, and while this certainly doesn’t count them out there is something to be said for the wisdom that experience brings. Their website lists executive staff but doesn’t have profiles or accreditation/certification information on their debt relief team members, which we wish we could see.

Debt settlement questions

What is debt settlement?

Debt settlement is a debt relief program for consumers who want to lower the payoff amount of their existing debt. A debt settlement company offers to settle your debt for an amount lower than the amount you owe. Your debt settlement company will require you to make fixed monthly payments to an escrow account.

There are many risks to debt settlement, and settlement should be considered only after investigating credit counseling and debt consolidation. You may want to consider debt settlement if:

  • You are living paycheck to paycheck and only making the minimum payments to your debts without seeing the balance go down.
  • You have fallen behind on paying your debts and can’t catch up on making the required minimum payments to your creditors.
  • You stopped paying your creditors due to a financial hardship, and the creditor has hired a collection attorney.
  • You want to negotiate your debts down but you don’t have the funds in a lump sum and need to make payment arrangements.
  • You are being harassed and overwhelmed by creditors and collectors

How does debt settlement work?

Debt settlement works when negotiators call a consumer’s creditors and attempt to convince them to allow the consumer to pay one large lump sum to pay off their debt. This lump sum is less than the total amount of debt originally owed. In exchange for this payment, the creditor forgives the debt owed by the consumer.

Debt settlement programs typically take 24–48 months to complete. Fees range from 15–25 percent of the amount settled, which means you might end up paying as much as 80 to 90 percent of the total debt amount once you pay your fees. However, you can be free of debt significantly sooner than if you continued to make the minimum monthly payments on your debts.

What types of debt can be settled?

Unsecured debt like credit cards and medical bills are the most common types of debt involved with settlement agreements. If you file for bankruptcy, credit card companies and medical facilities could get nothing. On the other hand, federal loans — such as federal student loans — are not ideal for debt settlement.

Here are the best type of debts for the settlement process:

  • Credit cards
  • Personal loans
  • Private student loans
  • Medical bills
  • Utility bills
  • Apartment leases
  • Auto-repo balances
  • Short-pay balances
  • Cell-phone bills

Keep in mind that creditors aren’t legally obligated to settle a debt with you. However, it’s often their best option for recovering funds. They can usually get more money through a settlement than using a collection agency or an attorney.

How does debt settlement affect your credit score?

Debt settlement can have as negative an impact as bankruptcy on credit scores. Unlike other types of debt relief programs, debt settlement generally lowers credit scores in the short-term because the lender or credit card company will report the debt as “settlement accepted,” “paid less than full balance” or “late-payment status” for several years until the account is fully paid. However, over time as your debts are paid off, and no further debt is accrued, you can improve your score.

Debt settlement can be a good alternative to bankruptcy. If you’re behind on your accounts, and a creditor thinks you’re unlikely to pay it in its entirety, they may be open to a settlement. However, if you can make monthly payments or work out a lower monthly payment plan with your creditor yourself, debt settlement is not recommended because it can damage your credit score and make it harder for you to get approved for credit in the future.

Settled debts can leave a negative mark on a credit score for up to seven years. For this reason, only opt for debt settlement if you do not plan to make a major purchase that will require a good credit score (like a house) in the next 5–7 years.

How to settle debt

1. Through a debt settlement company

If you go through a debt settlement company, you’ll typically stop making payments on your debts and pay the settlement company instead. That company then deposits the money into an account to form a lump sum. Once you have a large-enough lump sum, the company negotiates a settlement with your lenders on your behalf. Debt settlement companies can’t charge you upfront fees. You’ll pay them a percentage of your total or eliminated debt, typically 15–25 percent (generally paid out as part of your regular monthly installment payments).

2. Hire a debt settlement lawyer

While most people go through a debt settlement company, you can also choose to use a lawyer. Keep in mind, a lawyer can bill by the hour, charge a percentage of your total of eliminated debt, or charge a flat fee per lender. They act as your personal debt settlement company, negotiating a settlement on your behalf, handling all the paperwork and fielding any phone calls from your lenders.

3. Do it yourself

If you find yourself in a significant amount of debt, it doesn’t hurt to call your creditor on your own. Some creditors offer hardship programs for people who are dealing with tough situations like unemployment or a severe illness. Hardship plans might consist of lowered interest rates, coupled with waived fees. These plans usually last anywhere from six months to a year and are voided if you miss a payment.

If you want to negotiate a settlement yourself, you should save as much money as you can to make a lump-sum offer. This might mean taking on a part-time job, selling valuables or borrowing money from a family member. Creditors are more likely to take a lump-sum offer, since it puts money in their pockets immediately. Be honest about why you can’t pay. Creditors will look at your credit report, and if they see you’re still able to make payments on other loans or credit cards, they’ll be less likely to be lenient with you.

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Profile picture of Barbara Friedberg
Barbara Friedberg Personal Finance Contributing Editor

Barbara Friedberg, MBA, MS is a former investment portfolio manager with decades of financial experience. Friedberg taught Finance and Investments at several universities. Her work has been featured in U.S. News & World Report, Investopedia, Yahoo!Finance and many more publications.