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Freedom Debt Relief is a larger debt settlement company in the United States. There are many questions that surround FDR — people want to know if Freedom Debt Relief is an honest company or whether there are lawsuits against Freedom Debt Relief! Like most other debt settlement companies in the United States, Freedom promises to help you lower your debt by negotiating with your creditors. While this may sound like a great deal, there are many things you need to take note of in both the debt settlement process and Freedom Debt Relief. 

How Does Freedom Debt Relief Settle Debt?

Debt settlement is a common practice for individuals with an overwhelming amount of debt — though it may not be the safest method. Specifically, with Freedom Debt Relief, you typically need to have a minimum amount of debt to qualify for the program — usually around $7.500 or more. 

At the beginning of the process, Freedom Debt Relief will tell you to stop making payments to your creditors immediately. You will also open up a separate savings account where you will make monthly payments into. The amount you pay monthly will depend on the amount of debt that you have and what you and Freedom agree to. 

Once you stop making payments to your creditors, your accounts will become delinquent. At this point, you will begin accruing late fees and interest payments. After you have fallen behind on your payments, creditors are more likely to entertain the thought of accepting a lower payment to cancel out your debt — especially because delinquent payments may cause your creditors to think you may be filing for bankruptcy soon, in which case they wouldn’t get any payment. 

Freedom Debt Relief would then communicate on your behalf with your creditors to negotiate a lower payment. Eventually, Freedom and your creditors will come to an agreement on a new amount. If you agree to the amount, you will send in your payment. When you make your payment, Freedom Debt Relief would also take a percentage of the payout for themselves. Most debt settlement companies charge anywhere between 15-20% of the total amount paid. However, studies have found that Freedom Debt Relief’s charges are usually 20-25%, significantly higher than other debt settlement companies. 


While debt settlement has the potential of being risky, there are definitely some benefits if everything works out well. Here are just a few of the pros of debt settlement:

The Savings

Obviously, the savings that debt settlement offers are enticing. Creditors typically forgive between 10-50% of your total debt. This could be the difference between decades of extended debt or getting out in just months. 

Payment Flexibility

When you are making payments into your separate bank account, you are the only one who is really monitoring the account. You and Freedom Debt Relief would agree on the monthly amount — and it’s important that you try to stay on top of those payments for the best outcome potential — but should you need to miss a payment or only pay a partial amount, that option is available to you without severe consequences. This can be helpful if you have an unstable or unreliable income. 


While there are many alternatives to debt settlement, it could be one of the most time-efficient choices. Bankruptcy and debt management take years to complete. Debt Settlement can take as little as a few months. This can mean a faster new financially stable start. 

Avoid Bankruptcy

Debt settlement can help keep you from needing to file for bankruptcy. This can help guard you against various consequences of bankruptcy and keep your options more open. 

Financial Accountability

Most debt settlement companies recommend canceling your credit cards at the beginning of the process. Often this can allow you to abstain from debt by eliminating the possibility of charging things to credit. 

While these benefits are helpful, it’s also important to know about the potential cons that debt settlement can present.


Although there are many benefits to filing for debt settlement, there are a few risks that you need to be aware of before starting. Here are a few of the cons to consider from our Freedom Debt Relief reviews analysis (source):


Debt settlement companies cannot charge you before a settlement. However, they will charge fees at the end of the settlement. Please note: if Freedom Debt Relief tries to charge you before settling your debt, know that this is illegal. 

However, once you have submitted your negotiated payments to your creditors, you will also be charged a fee. The fee is typically a percentage of whatever debt you enrolled into the program with. With most companies, the fee would be around 15-20%, however, we’ve seen Freedom Debt Relief charge up to 25% — a significant amount depending on your debt. 

Not Actually Saving Money

Similar to the above con, the fees associated with your case could end up costing you so much that the amount of debt that is forgiven is outweighed by the fees owed to the debt settlement company. In this case, you could actually pay more than the original amount you owed in the first place. 

Customer Service

Specifically, with Freedom Debt Relief, we have heard very negative things about customer service. Debt settlement is a trying time, and it can be scary intentionally missing payments to your creditors. Because of this, patient and attentive customer care should be the minimum that you should expect. However, Freedom Debt Relief has a reputation for customer care that is less than stellar. This can make the process incredibly stressful. 

Lawsuit Likelihood

When you stop paying your creditors, there is always a potential for a lawsuit to be filed against you. Depending on a number of things — debt amount, income level, and more — the creditor may decide to file a lawsuit against you. This can force you to pay the creditor back in total under the authority of the court. Before starting the debt settlement process, talk to your debt settlement company about the potential of a lawsuit. 

Credit Impact

Debt settlement can have a huge impact on your credit score for two main reasons. First, you are intentionally missing multiple debt payments. This will automatically hurt your credit score as your account will become delinquent and the missed payments will be reported. Second, once your debt is settled, your credit report will show that, while you don’t owe any more on your account, you paid less than the full amount that was owed. Both of these factors have the potential to dramatically lower your credit score. These things tend to stay on your credit report for years. 

Can You Trust Freedom Debt Relief?

Consumer Affairs Ratings and Reviews of Freedom Debt Relief

If you have decided that debt settlement is the best choice for your situation, you may be considering working with Freedom Debt Relief. But, since you are trusting them with one of the biggest financial decisions you may make in your lifetime, make sure they are the best to work with. Here are a few red flags on the company that you may want to consider before moving forward with their services.

Higher Fees

As mentioned above, the normal rate to charge for debt settlement services can fall anywhere between 15-20%. However, Freedom Debt Relief has regularly charged up to 5% more than other companies. Consider what costs might add to your debt relief journey.


Freedom Debt Relief’s past is marred by a few blemishes — namely, a large lawsuit filed by the Consumer Financial Protection Bureau. It was alleged that Freedom charged individuals before setting their debt, made individuals negotiate directly with their creditors, and were dishonest about their fees. This case was later settled in 2019 with a $20 million restitution payout, along with a $5 million civil penalty. 

Low Customer Ratings

Wherever you can find unbiased reviews of Freedom Debt Relief, you will see that the consensus is pretty negative. The Better Business Bureau has rated Freedom Debt Relief as a B minus company, and the reviews on their BBB page tell a story of a debt settlement company without their clients’ best interest at heart. There are complaints about dishonesty around their pricing, lack of interaction, unavailability, and much more. This poor rating, along with the negative customer reviews, paints Freedom as a company you may want to think twice before working with.

Alternatives to Debt Settlement

If you aren’t sold on debt settlement and want to consider other options, here are just a few:

Debt Management Plan

While this plan takes longer and includes paying the entire debt amount, it should be considered before taking any other drastic steps! This plan revolves around working with a non-profit or licensed debt management company, and they will assist you in consolidating your debt into a manageable monthly payment. Oftentimes, these have lower interest rates than the rates you’d be paying directly to your creditors. This can typically keep you from dinging your credit score too badly.

Debt Consolidation Loan

Debt consolidation programs offer loans to combine lines of debt. The danger of searching for a loan instead of a program is the interest rate. When you work with a company that just offers loans (specifically, businesses that are not non-profits), you take out a new loan that can have a high-interest rate. However, there is always a potential that the new interest rate could be lower than some of the other lines of credit you have, so take those into consideration before moving forward. 


If you do not have enough free funds at the end of each month to make payments towards your debts, it may be time to consider filing for bankruptcy. Chapter 7 bankruptcy allows you to get rid of most of your debt in as little as 6 months, depending on the difficulty of your case. 

Should I Work With Freedom Debt Relief?

Ultimately, you have to make a decision based on what would be best for your situation. If the risks of debt settlement and the negatives reviews of the company aren’t deterrents for you, then working with them may be a decent option! If the pros outweigh the cons, and you don’t mind advocating for yourself, then working with Freedom Debt Relief may not be terrible. But if the potential risks associated with debt settlement are too daunting, or the bad reviews give you pause to working with Freedom, don’t be afraid to explore your other options! Do what is best for you and your situation.

Post Author: LincolnE

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