Is Freedom Debt Relief worth it? (2024)

Is Freedom Debt Relief worth it?

The majority of reviews are largely positive, though a few people have registered complaints about the fees Freedom Debt Relief charges. Freedom Debt Relief is accredited by the Better Business Bureau and has an A+ rating. according to the organization. Based on customer reviews, the company earns 4.3 out of 5 stars.

How long does it take Freedom Debt Relief to work?

Negotiations can drag on for months or even years, and if you don't settle, you'll have to pay back all the interest and late fees that piled up during this time. If you do settle, you will make regular payments to Freedom Debt Relief until all your accounts are cleared. This usually takes between 24 to 48 months.

What percentage does Freedom Debt Relief charge?

Freedom Debt Relief charges a fee typically ranging from 15% to 25% of the total debt in the program, with an average fee of 21.5%. Your fee depends on the amount of debt and your state of residence, and you will only pay the fee after you authorize the settlement and the first payment has been made.

Do debt relief companies actually help?

Working with a debt management company can result in less debt or a faster payoff — but there are often hefty fees, often up to 25 percent of the debt enrolled, attached to the services.

Do debt relief companies ruin your credit?

Using debt settlement services can have a negative impact on your credit scores and your ability to get credit in the future.

Can I take my money out of Freedom Debt Relief?

Can I withdraw money from my dedicated account with Freedom Debt Relief? Yes, you may withdraw from your Dedicated Account, which you control, at any time. This is an FDIC-insured account, and you control it, not Freedom Debt Relief, meaning you can withdraw from it at any time.

What happens when you use Freedom Debt Relief?

Freedom Debt Relief is a debt settlement company that helps consumers reduce their debt. During the debt settlement process, you stop paying your creditors and set aside your monthly payments until you've saved up enough to make a settlement offer.

How much tax do you pay on debt relief?

What Are the Tax Consequences of Debt Settlement? There are no direct taxes on a debt settlement, but if you save $600 or more, you will have to report the savings as income. To continue with the above example, the $2,000 you saved on that credit card debt is taxable income.

Will credit card companies forgive debt?

Most credit card issuers won't forgive all your outstanding debt, but they will work with you on repaying with a different payment plan. They may also negotiate with you on the total amount you owe if you are severely delinquent.

Is the credit card debt relief program legit?

Some debt relief companies are scams, and even the legit ones are risky and expensive. Some creditors refuse to work with debt relief companies, and even when it's successful, debt relief can do major harm to your credit and raise your income tax bill.

Can I still use my credit card after debt settlement?

Creditors don't want you to use the cards when you're having a benefit from a debt management program. But if there's a card that you can keep out of the program, you can do that. You can keep the card out and use it for emergencies.

What is negative about debt relief?

While not as devastating as a bankruptcy, debt settlement will have a negative impact on your credit score if you work directly with your creditors, as the settlement may be reported by the creditor to each of the three leading credit bureaus.

Why is debt relief bad?

Using debt settlement options to reduce debt comes with several risks, including late payments on your credit report, potential charge-offs, settlement company fees, tax implications on forgiven balances, possible scams and the overall risk of settlement offers not working.

How to get out of $10,000 credit card debt?

Can I buy a house after debt settlement?

Yes, you can buy a home after debt settlement. You'll just have to meet the lender's requirements to qualify for a mortgage. Unfortunately, that could be harder after you settle debt.

What company is best for debt relief?

Best overall: Accredited Debt Relief

It has an outstanding 4.9 rating with Trustpilot (as of January 26, 2024) and an A+ grade with the Better Business Bureau (BBB). Working with Accredited Debt Relief starts with a free phone or online consultation.

How can my debt be forgiven?

Filing for bankruptcy may provide a few options for overcoming unmanageable debt. A Chapter 7 bankruptcy, for example, may require that you liquidate some of your assets to pay your creditors, but it might be one of the only viable paths to debt forgiveness for some.

Can any debt be forgiven?

Debt forgiveness is usually available for unsecured debts like credit cards, personal loans, or student loans. Secured debts like a mortgage or a car loan are not usually eligible for debt forgiveness. If you default on a secured debt, the lender will likely pursue foreclosure or repossession.

Does debt relief need to be paid back?

And, depending on the program, you may be able to get your interest rate lowered or have certain fees waived. Under the terms of a debt management plan, while you may receive more favorable interest rates or relief from fees, you still repay the entire principal amount owed.

Do you have to claim debt settlement on your taxes?

It feels great to have your debt settled, canceled or forgiven, but you should be aware that there are tax implications of debt settlement. Settled debt is considered income by the IRS, so you'll have to pay income taxes on the forgiven amount. Creditors will send you a 1099-C form if the amount is greater than $600.

Will I owe taxes on forgiven debt?

In general, if your debt is canceled, forgiven, or discharged for less than the amount owed, the amount of the canceled debt is taxable. If taxable, you must report the canceled debt on your tax return for the year in which the cancellation occurred.

How does cancellation of debt affect tax return?

Generally, if you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt.

Is the government helping with credit card debt?

While there isn't a specific government debt relief program solely for credit card debts, various options exist to manage and reduce your debt.

How to pay 15k in credit card debt?

Do you lose your credit cards after debt consolidation?

You can still use credit cards after you consolidate your debt. Consolidating credit cards means you move all of your debt to one account, which resets your credit limits. Once your credit card balance is zero, you can still use it as long as you don't close the account.