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Best Debt Settlement Companies

Debt settlement companies can negotiate lower debts with your creditors. Browse our list of the best debt settlement companies.

Updated: March 28, 2024 | Alan Schmadtke
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    Debt.org wants to help those in debt understand their finances and equip themselves with the tools to manage debt. Our information is available for free, however the services that appear on this site are provided by companies who may pay us a marketing fee when you click or sign up. These companies may impact how and where the services appear on the page, but do not affect our editorial decisions, recommendations, or advice. Here is a list of our service providers. 

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    Consumer debt sits at an all-time high of more than $17 trillion and $1.2 trillion of that is credit card debt, the bane and burden for most American households.

    As the number of people with overwhelming credit card debt grows, so do inquiries about debt settlement, one of the four major debt-relief options.

    Debt settlement is a risky venture, and debt settlement companies are not all the same, so be careful before choosing to work with one. The process can be costly and can damage your credit for seven years. It’s not guaranteed to work. Lenders are not obligated to accept settlement offers.

    That’s why it’s important to work with a credible and reputable debt settlement company. There are dozens to choose from, and there are five key elements to think about when you search for one to help you.

    When comparing debt settlement companies, here are the major issues to consider:

    • Minimum debt requirements: Many companies require at least $7,500 of debt to enroll you. If you owe less, you will have fewer options.
    • Fees: Debt settlement companies usually charge you service fees of 15%-25% of the total enrolled debt amount. Some companies charge less, some more. Pay attention to the full range and specific fee structure. Also, the best companies are transparent about their fees. If they ask for payment up front, you probably need to walk away.
    • Types of debt settled: Debt settlement is primarily used for credit card debt, though it could be used for medical, personal and student loan debt and in rare instances, federal taxes. Be aware that the advantages and success rate in cases other than credit cards is minimal. Before enrolling, confirm which debts your company of choice can settle.
    • Location: Laws about settlement practices vary by state — and vary widely. Debt settlement companies only operate in certain states because some states prohibit them. Make sure the debt settlement companies you like will accept customers in your state. A few large companies operate nationwide.
    • Accreditation: The number of debt settlement scams have risen in recent years, so ensure that your company of choice has a certification from the American Fair Credit Council (AFCC) or the International Association of Professional Debt Arbitrators (IAPDA).

    Best Debt Settlement Companies

    The debt settlement companies listed below represent some of the most reputable in the industry. We based this list on specific criteria, such as longevity, service variety, affordability and consumer satisfaction ratings. Here’s are details about each company.

    Freedom Debt Relief logo

    Freedom Debt Relief

    Visit Site
    Year Founded
    2002
    Debt Settlement Fees
    15% - 25% plus $9.95 per month
    Minimum Debt Accepted
    $7,500

    States Operating: 31 states (AL, AK, AR, AZ, CA, DE, FL, IA, ID, IN, KY, LA, MA, MD, MI, MN, MO, MS, MT, NC, NE, NM, NV, NY, OK, PA, SD, TN, TX, UT, WI)
    Accreditations: American Fair Credit Council (AFCC).

    Company Description
    Freedom Debt Relief is one of the largest and most reputable debt settlement companies. It has resolved more than $15 billion in debt and served more than 850,000 clients. It has a 4.6 (out of 5) rating on Trustpilot based on 46,000 reviews.

    National Debt Relief Logo

    National Debt Relief

     

    Visit Site
    Year Founded
    2009
    Debt Settlement Fee
    15% - 25%
    Minimum Debt Accepted
    $7,500

    States Operating: Does not disclose
    Accreditations: AADR

    Company Description
    As one of the largest debt settlement companies, National Debt Relief has over 450,000 clients served and over $10 billion in debt settlements negotiated since 2009. The New York-based company has a 4.7 rating on Trustpilot based on over 38,000 reviews.

    InCharge Debt Solutions Logo

    InCharge Debt Solutions

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    Year Founded
    1997
    Debt Settlement Fee
    N/A
    Minimum Debt Accepted
    No minimums

    States Operating: All states
    Accreditations: National Foundation for Credit Counseling

    Company Description
    InCharge is one of the nation’s largest nonprofit debt settlement and credit counseling providers. The company provides free budget and debt consultations along with debt management services and nonprofit debt settlement services. For consumers, it is among the least expensive options in the debt settlement industry.

    pacific-debt-relief-logo

    Pacific Debt Inc.

     

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    Year Founded
    2002
    Debt Settlement Fee
    15% - 35%
    Minimum Debt Accepted
    $10,000

    States Operating: 29 states (AL, AK, AZ, AR, CA, CO, FL, ID, IN, KY, LA, MD, MA, MI, MS, MO, MT, NE, NV, NM, NY, NC, OK, PA, SD, TN, TX, UT, WI) and Washington, D.C.
    Accreditations: AFCC and IAPDA

    Company Description
    Pacific Debt Relief has one of the highest potential fee rates at 35% of debt total. It has a low-end rate of 15%. Pacific Debt focuses on personalized customer service and transparent practices, and it discloses detailed statistics on its debt settlement results and program dropout rate. It also has a Trustpilot rating of 4.7.

    accredited-debt-relief-logo

    Accredited Debt Relief

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    Year Founded
    2011
    Debt Settlement Fees
    15% - 25% plus
    Minimum Debt Accepted
    $10,000

    States Operating: 30 states (AK, AZ, AR, CA, CO, FL, ID, IN, KY, LA, MD, MA, MI, MS, MO, MT, NC, NE, NV, NM, NY, OK, PA, SC, TN, TX, UT, VA, WI) and Washington, D.C.
    Accreditations: AFCC, American Association for Debt Relief (AADR), Consumer Debt Relief Initiative (CDRI)

    Company Description
    Accredited Debt Relief provides debt settlement services and access to debt consolidation loans. The company is a division of Beyond Finance, a fintech company, and works with credit card, medical, and payday loan debt. It has helped more than 300,000 and boasts a 4.9 rating on Trustpilot.

    curadebt-logo

    CuraDebt

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    Year Founded
    2000
    Debt Settlement Fee
    Up to 20%
    Minimum Debt Accepted
    $5,000

    States Operating: 37 states (does not serve residents of HI, ID, IL, KS, LA, MN, NH, OR, SC, TN, UT, VT and WV)
    Accreditations: AFCC and IAPDA

    Company Description
    Florida-based CuraDebt provides tax debt relief services, assisting clients with settling federal and state tax debts where applicable. Its niche focus on tax debt, including IRS bank levies and tax liens, makes it a unique option. CuraDebt carries a 4.1 rating on Trustpilot, although its does not disclose its fees online.

    new-era-debt-solutions-logo

    New Era Debt Solutions

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    Year Founded
    1999
    Debt Settlement Fee
    15% - 25%
    Minimum Debt Accepted
    $7,500

    States Operating: Does not disclose
    Accreditations: IAPDA

    Company Description
    New Era Debt Solutions employs licensed attorneys to carry out expert debt negotiations on behalf of clients. It publishes detailed statistics on program outcomes and provides free consultations and debt relief services with fees ranging from 14% to 23% of debts enrolled, slightly below industry averages. The company has a 4.9 rating on Trustpilot.

    credit-associates-logo

    Credit Associates

    Visit Site
    Year Founded
    2015
    Debt Settlement Fee
    N/A
    Minimum Debt Accepted
    N/A

    States Operating: 44 states (does not serve residents of CO, CT, MN, MD, VT, WY) and Washington, D.C.
    Accreditations: IAPDA and AADR

    Company Description
    Credit Associates is one of the younger debt settlement companies among our leaders. It focuses on credit repair services and debt settlement. The company guarantees all fees paid will go toward paying down enrolled debts. While the company does not list its fee structure, it claims customers save an average of 30% on their debts, including fees. The company has a 4.9 rating on Trustpilot from 14,000 reviews.

    Best Debt Settlement Companies

    Debt Settlement Company Comparison
    CompanyFoundedFeesDebt Settlement MinimumResolved Debt TotalBBB Rating
    Freedom Debt Relief200215% - 25%$7,500$15 billionA+
    National Debt Relief200915% - 25%$7,500$10 billionA+
    InCharge Debt Solutions1997$75 setup fee, $33 monthly feeNo minimum$3 billionA+
    Accredited Debt Relief201115% - 25%Undisclosed$3 billionA+
    Pacific Debt Inc.200215% - 35%$10,000$300 millionA+
    CuraDebt2000Up to 20%$5,000 minimumDoes not discloseA+
    New Era Debt Solutions199914% - 23%$7,500$250 millionA+
    Credit Associates2015UndisclosedUndisclosed$1 billionA+

    What Is Debt Settlement?

    Debt settlement provides financial relief by letting you pay off eligible debts for less money than you owe. You can do this independently — DIY debt settlement, if you will — or by enlisting a debt settlement company to negotiate reductions on your behalf.

    While debt settlement may seem like an attractive option, understand that this approach can damage your credit, especially if the process is not properly managed. You will see your credit score drop. In the wrong hands, you could get sued by your creditors or owe taxes on debt you settle.

    How Does Debt Settlement Work?

    If you go on your own, you must negotiate settlement terms with each creditor, one at a time. Know that every creditor is different, and you’re likely to end up with a variety of pay-back terms.

    If you use a debt settlement company, the firm negotiates on your behalf.

    Depending on several factors — such as the number of creditors involved and how much you can afford to pay each month — the debt settlement process can take 1-4 years to complete.

    Some creditors may not agree to a settlement, and some won’t work with debt settlement companies.

    Here’s what you can expect once you enroll in a debt settlement program:

    1. You will likely stop paying some of your monthly bills. Instead, you will set aside that money in a savings account for a settlement to offer your creditors. Debt settlement programs often require you to save for at least 36 months to settle all of your debts, according to the Federal Trade Commission.
    2. You can expect to hear from creditors and debt collectors. After you stop paying your accounts, you will get calls from creditors and debt collectors reminding you of your late payments. You also risk being sued by your creditors during this period. The debt settlement company may advise you on how to deal with calls.
    3. Your debt settlement company will negotiate with your creditors, usually within 180 days. That's about when creditors begin to write off what you owe as bad debt. Your debt settlement company leverages your bad standing to negotiate lump sum settlements that satisfy your debts for less than you owe. Your creditors must weigh whether to receive these partial payments from you vs. no payments at all. Missed payments make creditors view you as a high-risk, so they become more likely to accept partial payments just to get something.
    4. Your creditors will decide whether to accept your settlement offers. Upon securing these discounted settlements, you'll make payments from your dedicated savings account until each account gets closed. You will need to have enough saved to cover lump-sum payments and fees for the debt settlement company.

    While each negotiated settlement relieves a financial burden, it also damages your credit further by adding additional late payments and derogatory marks.

    Pros and Cons of Debt Settlement

    Debt settlement is usually a last-ditch effort before filing for bankruptcy. The strategy has its benefits, but it also has several disadvantages.

    Pros

    • You end up paying up to 50% less than what you owe.
    • You stop phone calls from collection agencies.
    • You can get out of debt completely.
    • You avoid filing for bankruptcy.
    • Creditors will eventually go away.

    Cons

    • You will owe fees of at least 15% (and often more) of the total debt you settle.
    • Some creditors won’t negotiate with debt settlement companies.
    • Your credit rating will drop 100-200 points.
    • A settled account will remain on your credit report for seven years from the date of your first missed payment.
    • You could get sued by a creditor.
    • Missed payments accumulate late fees, penalties and other charges that prolong your settlement process.
    • You could get taxed on any debt forgiven.
    • Creditors may sell your settled debts to debt collectors, who could call you about repayment.

    Is Debt Settlement a Good Idea?

    The best thing about debt settlement is that it can help you avoid bankruptcy — an outcome no one wants.

    However, only you can decide if you need help from a debt settlement company to dig out of your financial hole. If you’re struggling with high-interest credit card balances you don’t see yourself paying off, debt settlement may be a reasonable middle ground between paying for years and declaring bankruptcy.

    More About Debt Settlement

    As you weigh the situation, consider alternative debt relief solutions and talk to a debt counselor for free.

    You can earn more about debt settlement by reading the following resources:

    Sources:

    1. N.A. (2024, February 6) Household Debt and Credit. Retrieved from https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2023Q4
    2. N.A. (2024, January 8) Consumer Credit - G.19. Retrieved from https://www.federalreserve.gov/releases/g19/current/
    3. N.A. (ND) CreditAssociates. Retrieved from https://www.creditassociates.com/contact/#FAQs
    4. N.A. (ND) How We Help. Retrieved from https://www.accrediteddebtrelief.com/
    5. N.A. (ND) What states can Pacific Debt Relief offer services in? Retrieved from https://www.pacificdebt.com/states
    6. N.A. (ND) InCharge Debt Solutions. Retrieved from https://www.incharge.org/
    7. N.A. (ND) NewEra Debt Solutions. Retrieved from https://neweradebtsolutions.com/
    8. N.A. (ND) Freedom Debt Relief. Retrieved from https://www.freedomdebtrelief.com/
    9. N.A. (ND) CuraDebt. Retrieved from https://www.curadebt.com/
    10. N.A. (ND) With You Every Step Of The Way. Retrieved from https://www.nationaldebtrelief.com/aboutus/