The main downsides of Freedom Debt Relief include significant damage to your credit score, high fees (15%-25% of debt), potential tax liabilities on forgiven amounts, and no guarantee that all creditors will settle. The process requires stopping payments to creditors, which can lead to late fees and potential lawsuits.
Freedom Debt Relief might be a good fit if: You have only unsecured debts (credit cards, personal loans). You have no large assets (like a house with equity) that creditors could pursue. You can handle the credit score drop and potential lawsuits.
Freedom Debt Relief typically charges a fee between 15% and 25% of your enrolled debt, varying by state and debt amount, paid only after a settlement is reached and authorized, plus small account setup and monthly maintenance fees. Their performance-based fee is a percentage of the debt they help resolve, not upfront, with a 15-25% range, and they have additional minor charges for account management.
Debt relief doesn't automatically cancel your credit cards. Whether you can keep accounts open depends on what path you choose. If you stop making payments to any credit card debt, the issuer could close the account.
Freedom Debt Relief, LLC. In July 2019, the Consumer Financial Protection Bureau (The Bureau) settled its lawsuit against Freedom Debt Relief, LLC.
The "777 rule" in debt collection, also known as the 7-in-7 rule, is a CFPB regulation (Regulation F) limiting calls: collectors can't call more than 7 times in 7 days for a specific debt, nor call within 7 days of a conversation about that debt. It aims to prevent harassment, applying to calls, texts, and emails, though exceptions exist, and the presumption of compliance can be rebutted by aggressive call patterns like rapid succession or highly concentrated calls.
The 11-word phrase often cited to stop debt collectors is "Please cease and desist all calls and contact with me, immediately," which leverages your rights under the Fair Debt Collection Practices Act (FDCPA) to halt most communication, though it must be sent in writing via certified mail to be legally binding, and collectors can still notify you of lawsuits.
Debt relief can be a good idea if you're overwhelmed by high-interest, unsecured debts (like credit cards) and need professional help to negotiate with creditors, potentially settling for less than you owe, but it carries risks like credit score damage, fees, potential tax implications, and isn't suitable for secured loans (mortgages, auto loans) or all debt types. It's best for those facing hardship who can't manage payments, but always explore options like credit counseling first and be wary of scams, ensuring a legitimate company provides transparency and control over your funds, notes United Settlement and NerdWallet.
Yes, you can cancel Freedom Debt Relief, but it's important to understand how it might impact the debt relief process. If you decide to cancel, you should contact the company directly to inform them of your decision.
Both offer a debt settlement program where they negotiate with creditors to reduce the amount owed by clients. However, National Debt Relief is often known for its more personalized approach to customer service, while Freedom Debt Relief operates on a larger scale with a more structured, standardized program.
Bankruptcy is your best option for getting rid of debt without paying.
Debt collectors, especially debt buyers, are usually more likely to settle debt for less. So it may be better for you to discuss settlement options with collections, but be aware that debt settlement will impact your credit score. Paying in full is usually the best option, but not everyone can afford to do that.
The drawbacks to debt relief programs are high fees and potential damage to your credit for missed payments. Debt consolidation loans and balance transfer cards can help you manage your debt and boost your credit scores, if you qualify for them.
The "777 rule" in debt collection, also known as the 7-in-7 rule, is a CFPB regulation (Regulation F) limiting calls: collectors can't call more than 7 times in 7 days for a specific debt, nor call within 7 days of a conversation about that debt. It aims to prevent harassment, applying to calls, texts, and emails, though exceptions exist, and the presumption of compliance can be rebutted by aggressive call patterns like rapid succession or highly concentrated calls.
This validation information includes the name of the creditor, the amount you owe, and how to dispute the debt. If the debt collector doesn't or can't provide this information, it could be a scam. Never give sensitive financial information to the caller, at least not until you've confirmed they're legitimate.
A "609 dispute letter," often mischaracterized as a means of getting negative information removed from a credit report, is a name sometimes applied to a formal request for disclosure of credit information compiled by one of the national credit bureaus (Experian, TransUnion or Equifax).
By taking the right steps to rebuild your credit, like using secured cards wisely and making all payments on time, you can gradually work your way back into the credit world. It won't happen overnight, but with patience and persistence, using a credit card again after debt settlement is possible.
For most people, increasing a credit score by 100 points in a month isn't going to happen. But if you pay your bills on time, eliminate your consumer debt, don't run large balances on your cards and maintain a mix of both consumer and secured borrowing, an increase in your credit could happen within months.