Freedom Debt Relief is the debt-settlement arm of Achieve, formerly known as Freedom Financial Network. Like most debt settlement companies, Freedom Debt Relief works with unsecured debts, including credit card bills, medical debt and personal loans.
The company doesn't work with secured debt (like auto loans) and it can't help with debt from taxes, utility bills, lawsuits or federal student loans.
Below, CNBC Select breaks down what you need to know about its service and how to get started.
Freedom Debt Relief
Minimum debt
$7,500
Fees
The settlement fee is 15% to 25%, depending on the state and amount of enrolled debt. $9.95 escrow account set-up charge and $9.95 monthly service fee
Availability
Not available in Colorado, North Dakota, Oregon, Rhode Island, Vermont, West Virginia, Wisconsin, Wyoming or Washington, D.C.
Highlights
Freedom Debt Relief has resolved over $20 billion in outstanding debts since 2002. It offers free credit card debt relief consultations.
Pros
- Debt requirement is lower than many competitors
- Customer service available seven days a week
- A+ Better Business Bureau rating
Cons
- Not available in all states
Freedom Debt Relief Review
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How does Freedom Debt Relief work?
Freedom Debt Relief requires a minimum debt balance of $7,500. Most debt settlement companies follow a fairly standard process for working with clients. Once a company has agreed to take you on as a client, you'll have to stop making all payments to any creditors.
This means you may accrue late fees and other penalties, since you'll temporarily stop making your usual payments. You may also notice your credit score take a hit. In some cases, your creditors may even take you to court.
Instead of making your usual debt payments, you'll be instructed to start depositing money into a dedicated bank account, usually at a partner bank or credit union, which will actually be used to pay your new, negotiated balance.
Freedom Debt Relief's service fee may also be deducted from the escrow account. According to the company's website, clients won't pay the fee until three conditions are met: a settlement offer is reached, the client approves the offer and the client makes the first payment toward the new, negotiated balance.
How much does Freedom Debt Relief cost?
The company's fee ranges from 15% to 25% of your enrolled debt balance. The fee may be tacked onto the amount you'll repay after your balance has been negotiated.
It's also worth noting that you'll be charged a one-time setup fee of $9.95 for the dedicated bank account as well as a monthly $9.95 fee to continue using the account. However, the fee is collected by Crossroads Financial Technologies (CFT), which sets up the account for you; Freedom Debt Relief doesn't receive these fees.
Freedom Debt Relief: pros and cons
As with any financial service, it's important to weigh the benefits and drawbacks before making a decision.
Pros
- Can reduce your enrolled balance by up to 50%
- Most clients resolve debts within 24 to 48 months
- No fee until the offer is approved by creditors
- FDR fees are lower than some competitors
Cons
- There is a $9.95 setup fee and a monthly account charge
- Not available in all states
How does Freedom Debt Relief compare?
Freedom Debt Relief vs. Americor
Americor is another solid company in the debt settlement space. Here's how it compares to Freedom Debt Relief.
Americor Debt Relief
Minimum debt
$10,000
Fees
Settlement fee is 15% to 25%, depending on the amount enrolled and the state you live in.
Availability
Available nationwide except in Colorado, Oregon and West Virginia
Highlights
Americor also offers debt consolidation loans for up to $48,000 with terms of 12 to 60 months.
Read our Americor Debt Relief review.
Pros
- Low minimum debt requirement
- Available in nearly every state
- Offers debt consolidation loans
Cons
- Maintenance fees not disclosed
- High debt minimum requirement
Types of debt
Both companies service unsecured debt only. Neither handles federal student loan debt.
Minimum/maximum debt
Freedom Debt Relief: $7,500
Americor: $7,500 and no maximum limit
Fees
Americor: 14% to 29% of the total enrolled debt
Freedom Debt Relief: 15% to 25% of the total enrolled debt
Freedom Debt Relief vs. Pacific Debt Relief
Pacific Debt Relief offers a process similar to Freedom Debt Relief's but with a few standout differences.
Pacific Debt Relief
Minimum debt
$10,000
Fees
The settlement fee is 15% to 25%, depending on the amount enrolled and the state you live in.
Availability
Available nationwide except in Oregon
Highlights
Pacific Debt Relief is accredited by the Association for Consumer Debt Relief and has an A+ rating with the Better Business Bureau
Pros
- High customer satisfaction scores
- Widespread availability
- Accessible for Spanish speakers
Cons
- High debt requirement for enrollment
- No mobile app
Types of debt
Both Freedom Debt Relief and Pacific Debt Relief service unsecured debt.
Minimum/maximum debt
Freedom Debt Relief: $7,500
Pacific Debt Relief: $10,000 and no maximum limit
Fees
Freedom Debt Relief: 15% to 25% of the total enrolled debt
Pacific Debt Relief: 15% to 25% of the total enrolled debt
Is Freedom Debt Relief legit?
Freedom Debt Relief is a member of the International Association of Professional Debt Arbitrators. It also boasts an A+ rating from the Better Business Bureau.
How to sign up with Freedom Debt Relief
To get started with Freedom Debt Relief, visit their website or call 800-910-0065.
Freedom Debt Relief FAQs
What are the risks of debt settlement?
Upon entering the debt settlement process, your credit score may be impacted and you may accrue late fees on your debts. This is because you'll be required to stop making payments while the company negotiates your debt balance.
Who qualifies for debt settlement?
Whether you qualify for debt settlement depends on the individual settlement company's requirements, including the balance of your debt and how far behind you are in your payments.
What's the difference between debt settlement and debt consolidation?
Debt consolidation involves taking out a loan to pay off your existing balances and then repaying the one loan. Debt settlement involves a company negotiating on your behalf for a lower balance.
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