Aeron RuparFreedom Debt Relief (FDR) is a debt settlement company that helps individuals with significant unsecured debt, such as credit card bills, by negotiating with creditors to reduce the overall amount owed. Clients stop paying creditors and make monthly deposits into a dedicated account, later used to settle the negotiated debt.
While FDR can reduce debt and offer an alternative to bankruptcy, the process can negatively impact credit scores, and there are service fees (typically 15-25% of the settled debt). The forgiven debt may be taxable, and not all creditors may agree to settle.
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Freedom Debt Relief assists individuals struggling with unsecured, high-interest debts by negotiating with creditors to reduce the amount owed, offering a viable alternative to debt consolidation loans. Their services are aimed at helping people regain financial stability without resorting to bankruptcy.
To qualify, clients must have at least $7,500 in unsecured debt. The program is designed for those with debts like credit card balances, medical bills, and personal loans. However, secured debts such as mortgages and auto loans aren’t eligible. While federal student loans aren’t covered, there may be options for private student loans on a case-by-case basis.
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Freedom Debt Relief (FDR) helps clients settle their outstanding debts for less than what they owe. The process begins with a free consultation to evaluate your debt situation. If you qualify for the program, FDR creates a customized plan and payment schedule.
Rather than continuing to pay your creditors directly, FDR advises you to stop making payments to them, which can negatively affect your credit score. Instead, you make a single monthly deposit into a special account that you control.
This account will accumulate funds that are later used to settle your debts. Once enough money has been saved, FDR negotiates with your creditors to reach a settlement on your behalf.
When a settlement offer is reached, and you agree to it, the funds in your account are released to pay off that debt. After a settlement is finalized and the first payment is made, FDR charges a fee between 15% and 25% of the original amount of the debt enrolled. On average, it takes between 24 and 84 months to complete the program.
Additionally, FDR offers a guarantee. If your total settlement cost (including both the reduced debt and FDR’s fees) is more than the initial amount you owe, they may refund you up to 100% of their fees.
Read our detailed article on how debt relief works.
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Freedom Debt Relief is among the most reputable debt relief companies, founded in 2002. It specializes in debt negotiation services and is a founding member of the American Association for Debt Resolution (previously known as the American Fair Credit Council) and associated with the International Association of Professional Debt Arbitrators. As such, it has established a solid presence in the debt settlement industry.
The company primarily focuses on negotiating with creditors to reduce clients’ debt, but it also aims to help individuals explore all available financial options. This could include creating better budgets, seeking credit counseling, or even considering debt consolidation or bankruptcy when appropriate. Freedom Debt Relief is transparent about its services and fees, and its customer support team is accessible by phone or email to assist with any concerns or questions.
For those overwhelmed by debt, Freedom Debt Relief provides a potential solution. However, it’s essential to carefully weigh all debt management options before deciding on a settlement to ensure it’s the right fit for your financial situation.
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Freedom Debt Relief’s settlement program is designed for unsecured debt. It doesn’t cover federal student loans or secured debts like mortgages and car loans. However, the following types of unsecured debts may be eligible for settlement:
Freedom Debt Relief has garnered positive customer feedback, boasting a 4.6 out of 5 rating on Trustpilot based on over 42,000 reviews. Similarly, the company holds a strong 4.61-star rating with the Better Business Bureau (BBB), where it is accredited and maintains an A+ rating.
Customers frequently highlight the company’s responsive customer service, knowledgeable support representatives, and the ease of using its client dashboard to track progress.
However, Freedom Debt Relief has faced legal and regulatory challenges in recent years. In 2019, the Consumer Financial Protection Bureau (CFPB) alleged that the company charged fees without settling debts as promised, had clients handle negotiations independently, and misrepresented its fees. The company settled with the CFPB, agreeing to pay $20 million in restitution and $5 million in penalties.
In 2023, Freedom Debt Relief settled a class-action lawsuit for $9.75 million. The lawsuit claimed the company violated the Telephone Consumer Protection Act by using automated or pre-recorded messages for telemarketing calls and sending messages to individuals on the National Do Not Call Registry. Despite these issues, the company remains a popular choice for debt settlement services.
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Freedom Debt Relief charges fees between 15% and 25% of the total enrolled debt, depending on factors like your state of residence and your debt amount.
In addition to these settlement fees, customers are responsible for account maintenance costs, including a one-time setup fee of $9.95 and a monthly servicing fee of $9.95. These fees are added to the percentage fee for debt settlement.
You can leave Freedom Debt Relief’s program anytime by providing a written notice of termination. This notice can be sent either electronically or by mail.
Once Freedom Debt Relief receives your request, they will close your account and return any remaining funds in your savings account, minus any fees for services already rendered. The refund process typically takes up to seven business days after the termination is processed.
Freedom Debt Relief provides a reliable debt settlement option for individuals overwhelmed by unsecured debt, such as credit card debt, medical bills, and personal loans. The company works to negotiate reduced debt amounts with creditors, helping clients regain financial control without resorting to bankruptcy.
While it can be an effective solution, it may affect your credit, so it’s important to weigh all your options, such as debt consolidation or credit counseling, before deciding. With positive customer reviews and a strong track record, Freedom Debt Relief can be a helpful resource for those seeking to resolve their debt.
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Judith Harvey is a seasoned finance editor with over two decades of experience in the financial journalism industry. Her analytical skills and keen insight into market trends quickly made her a sought-after expert in financial reporting.
