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Best Debt Settlement Companies

We compared 36 brands and chose the top debt relief companies

  • Best overall
    National Debt Relief
    4.9(58,739)
  • Low fees
    Freedom Debt Relief
    4.4(34,494)
  • Small debts
    United Debt Settlement
    4.9(410)
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By: Ashley Eneriz
+1 more
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Edited by: Morgan Cutolo

Best Debt Settlement Companies

After analyzing thousands of verified customer reviews, National Debt Relief took the top spot for the best debt settlement companies. Freedom Debt Relief is known for low fees, United Debt Settlement is our pick for those with small debt amounts and Accredited Debt Relief is known for having the best customer service.

Why trust ConsumerAffairs?
  • Our recommendations are based on what reviewers say.
  • 4,873,253 reviews on ConsumerAffairs are verified.
  • We require contact information to ensure our reviewers are real.
  • We use intelligent software that helps us maintain the integrity of reviews.
  • Our moderators read all reviews to verify quality and helpfulness.

Our top 4 picks for debt settlement companies

  1. Our top pick overall: National Debt Relief
  2. Our pick for low fees: Freedom Debt Relief
  3. Our pick for small debt amounts: United Debt Settlement
  4. Our pick for customer service: Accredited Debt Relief
Our top pick overall

National Debt Relief

National Debt Relief
4.9
58,739 reviews
Minimum debt
$7,500
Maximum cost
25% of debt
Time to settle
12 to 48 months
Year founded
2009
Get Started Read Reviews

With free consultations, transparent terms and established relationships with over 10,000 creditors, National Debt Relief takes a structured approach to debt relief. The company has helped more than 400,000 individuals resolve unsecured debt since 2009, including medical bills, private student loans and business debts. Verified customers often tell us about knowledgeable and empathetic representatives who guide them through the process and make managing debt less overwhelming.

Pros
  • Free consultations
  • Easy to enroll
  • Transparent terms
  • Helpful staff
  • Free money management tools
Cons
  • Fees required
  • Some communication issues
  • May negatively impact credit score

Like our other top picks, National Debt Relief charges up to 25% of the enrolled amount. For example, if you settle a $20,000 debt, expect to pay up to $5,000 for services. Fees are only charged after your debt is settled.

According to company reps, clients who get all their debt settled through the program save approximately 50% before fees, which works out to about 30% after considering the fees.

But it doesn’t end up being worth it for everyone. “I was presented with a settlement for my Discover card debt of $13,375,” Angelo in New York told us. “The settlement amount, including fees, came to $12,650.84 — a minimal savings at best.”

“Enrolling with National Debt Relief was really simple and easy. … The program made life a lot easier for me because it combined all of my debts. The only thing I had to pay was the one payment a month. So, it was really a lot more easier for me in life with my finances and this was all of my debts. I had over $21,000 worth in debt. I was really happy. The rep I worked with had a great attitude.”
Joyce Tallahassee, FL
“These are amazing people who understand the hardships you're going through and genuinely want to help. They give you the tools you need to help with your debt and also explain things very well to ensure your understanding.”
Elizabeth Montesano, WA
“It was great, I was dreading talking about my problems to a stranger but Hailey was awesome. She made feel like a friend and was very through with everything she took the time to answer all my questions and was very considerate. I feel I will be able to now afford to retire before I die.”
Brenda Montgomery, AL
3x Award Winner
Selected for having one of the highest satisfaction rates for Best Customer Service, Best Value and Best Overall Process
Our pick for low fees

Freedom Debt Relief

Freedom Debt Relief
4.4
34,494 reviews
Minimum debt
$7,500
Maximum cost
25% of debt
Time to settle
24 to 48 months
Year founded
2002
Get Started Read Reviews

Freedom Debt Relief (FDR) has been in the debt settlement industry for over 15 years, and the company has an impressive number of experts: over 550 certified debt consultants and over 200 debt negotiators. Reviewers rate the process and transparency much higher than industry averages.

Pros
  • No upfront fees until settlement reached, authorized by client
  • Lots of experience
  • Works with high debt amounts
  • Long-term credit recovery
Cons
  • Some communication issues
  • Short-term impact on credit

The fees range from 15% to 25% of your enrolled debt, and your specific fee percentage is determined by the state you live in. On the low end, if you come to the company with a $20,000 debt, expect to pay up to $3,000 for debt settlement services. With FDR, fees are due after you’ve authorized a settlement and have made your first payment as part of that settlement.

As with any debt settlement program, you expect your credit score to take a temporary hit. “The debts that have been resolved so far have been substantial in cost reduction, but I feel like I wasn't warned how hard my credit would be hit,” Brian in Arkansas told us. “The way it was described I expected just a few points, but mine and my wife's credit scores have dropped almost 200 points.”

“I absolutely love how fast and reliable this program has been ever since I started. They gave me peace of mind knowing that they could take care of all my debt in a timely and efficient manner.” — David in Indiana
David Franklin, IN
“Extremely happy with the program and customer service. They inform me on time, make suggestions and wait for me to answer whether I agree or disagree. I approve of the approach they take towards lowering my totals, deciding which should go first and which should wait.”
Iliana Saint Petersburg, FL
“Within a few months, they had the first credit card settled for 53% less than what I owed. A few months later, they were able to settle with the second credit card company for 50% less.”
Ellen Alpena, MI
Our pick for smaller debt amounts

United Debt Settlement

United Debt Settlement
4.9
410 reviews
Minimum debt
$5,000
Maximum cost
25% of debt
Time to settle
24 to 48 months
Year founded
2016
Read Reviews

United Debt Settlement offers services for many different kinds of debts, including some credit card debt, auto loans, medical bills and business debts. If your debt amount is relatively low, you might consider enrolling in a debt management plan (DMP) or applying for a debt consolidation loan. Unlike debt relief, these options do not reduce your overall debt load, but both can make repaying debt more manageable with less impact on your credit score.

Pros
  • Multiple debt relief services
  • Entire team is IAPDA-certified
  • Publishes proof of past settlements
Cons
  • Not available in all states
  • Doesn’t work with secured debt
  • Some customer service complaints

United Debt Settlement operates on a “pay-for-performance” model. Its fees are based on a percentage of the amount of debt enrolled. A verified customer, Shawn in Texas, explained it this way: “You pay them a monthly fee, and then they put your money in escrow. Then they negotiate the settlement fees with the other companies. Based on the settlement agreement, they pay them off.” Like with our other top picks, expect to pay around 25% of the debt you’re settling.

Denise in Illinois was concerned about the lack of transparency. “When I was talking to the intake person initially, they said roughly, we're gonna settle it for 50%. All in all, when it was all said and done, they settled it for 25%. I ended up paying 75% of what was owed,” she told us.

Similarly, Hani in Pennsylvania also expressed frustration with United Debt Settlement's lack of clarity and felt misled about the timeline and costs.

Another customer, Richard in Texas, mentioned the website could be improved: “I just still struggle to sign into the website to figure out where I am in my debt payoff. It's hard to do.”

“They made me feel comfortable and put my mind at ease many times throughout the whole process. I would recommend this company to anyone that was in my position. United customer service was great. People I dealt with were friendly, non-judgmental and always heard what I had to say.”
Parshant Visalia, CA
“I’m very satisfied with how well prepared I was prior into entering into this agreement with United Settlement. … He didn’t sugarcoat anything. He educated me on my previous financial situation, explained the benefits of their services, and prepared me for not so great aspects. I highly recommend speaking to a certified debt specialist at this company. They will tell you how it is and handle your debt as quickly and efficiently as possible.”
Ana Brooklyn, NY
“I completely paid off all my debt. It took about three years, but I'm debt free now. My credit score at that time was 460, and now, my credit score is up over 670. United Debt is very reputable, they are very respectful, and they work with you, they do what they can to help get you out of debt.”
J Waukesha, WI
Our pick for customer service

Accredited Debt Relief

Accredited Debt Relief
4.9
3,496 reviews
Minimum debt
$10,000
Maximum cost
25% of debt
Time to settle
24 to 48 months
Year founded
2011
Get Started Read Reviews

Accredited Debt Relief representatives are often described as knowledgeable, patient and understanding, taking the time to explain the process and answer all their clients’ questions. Reviewers mentioned feeling relieved and hopeful about their financial situations after enrolling in the program. They often express gratitude for the help and guidance they received.

Pros
  • Transparent terms
  • Accredited with BBB, AFCC, IAPDA
  • Various debt consolidation options
  • Free consultation
  • Experienced Consolidation Specialists
Cons
  • No 24/7 customer service
  • Must have debts of $10,000+
  • Somewhat limited availability

The fees are success-based, usually set at 25% of the enrolled debt. Clients typically repay about 55% of their enrolled debt before fees.

Accredited Debt Relief says the program can be canceled at any time without penalty and has a money-back guarantee. However, the company’s website is not transparent about how to cancel and if there are any exclusions to these guarantees.

Some clients have expressed dissatisfaction with the program. For instance, Pete in California felt misled by the company's marketing tactics, and Joyce in Virginia was disappointed by how long it would take to settle her debts.

We suggest you read the fine print carefully. “After reading through the contract I find out that I’ll be left to deal with my creditors on my own,” Lee in Illinois told us. “I’m not protected from phone calls, collections, or wage garnishments. Then, what did I sign up for? I need to withdraw from this. It sounded too good to be true, and I guess it is.”

“This is an experience no one really wants to go through, but so far it has been so hassle-free! Everyone I have spoken to has been so kind, from the initial phone call with Mason, to the consultation with the attorney. Everyone is just so kind, considerate and understanding.”
Jessica Waterman, IL
“I would definitely recommend this program to anyone looking to get their finances back in order. From the 1st phone call I was treated with respect and informed on every step that would be involved. Great company and even better customer service! I feel like a weight has been lifted off of me and I can breathe again knowing that I have a team of talented and dedicated professionals in my corner.”
Mandi Santa Fe, TX
“The representative working with me was extremely helpful and explained everything. I wasn't sure that this process would help me with my financial situation. He explained in great detail what the benefits would be. I was concerned that this process would cause permanent damage to my credit. But, he assured me that my credit score would definitely recover, as long as I participated consistently with the process.”
Dwayne Chicago, IL
3x Award Winner
Selected for having one of the highest satisfaction rates for Best Customer Service, Best Value and Best Overall Process

Debt Settlement Buyers Guide

Jump into our guides and start learning

In this guide

Top Picks

See who reviewers like

National Debt Relief logo
Freedom Debt Relief logo
United Debt Settlement logo
See our top picks

Could your debt be reduced or forgiven? Take our financial relief quiz.

You may want to consider debt settlement if you’ve fallen behind on your required debt payments or feel overwhelmed by creditors or debt collections. But it doesn’t work for everyone. Based on feedback from thousands who have already gone through the debt settlement process, here’s what to know before hiring a firm.

Key insights

Debt settlement aims to reduce the amount of debt you have so that you ultimately have less to repay.

Jump to insight

Companies usually charge a fee of 15% to 25% of the amount of debt enrolled in their programs.

Jump to insight

There are risks associated with debt settlement, and it should only be considered after investigating other solutions, including credit counseling and debt consolidation.

Jump to insight

What is debt settlement?

Debt settlement is when a creditor agrees to settle a debtor's balance for less than the full amount owed. The debtor makes a lump-sum payment (or several payments) amounting to a portion of their debt owed, and the creditor agrees to forgive the remainder of their debt.

Debt settlement typically takes 24 to 48 months.

Debt settlement is an option used by individuals facing financial hardship and struggling to meet their debt obligations. It typically applies to unsecured debts, such as credit card debt, medical bills or personal loans, rather than secured debts like mortgages or auto loans.

Instead of paying multiple creditors individually, you’ll make one monthly payment to a savings account set up by the debt settlement company. Your funds can grow in that account until you have a large enough sum to pay off your debts per the terms negotiated by the settlement company.

How to choose a debt settlement company

The best debt settlement companies are transparent about fees and pricing, accredited by industry groups and will not charge large upfront payments. Here’s what you should do before you hire a firm.

  • Verify accreditation and certification: Check if the company is a member of trade organizations like the American Association for Debt Resolution (AADR) or the International Association of Professional Debt Arbitrators (IAPDA). You should confirm that the company is licensed to operate in your state.
  • Read reviews: Look at ratings on platforms like ConsumerAffairs and check the Consumer Financial Protection Bureau (CFPB) complaint database for patterns of unresolved issues.
  • Avoid unrealistic promises: Be wary of companies that promise immediate debt relief, complete elimination of your debt and protection from lawsuits by creditors. Legitimate companies set realistic expectations.

How debt settlement works

You can attempt to settle your debts independently, or you can hire a debt settlement company to negotiate with your creditors on your behalf. “Effectively, you are telling your credit card company (or other debt) that you will offer them cash now to forgive the rest of the debt,” Jay Zigmont, a certified financial planner and founder of Childfree Wealth, explained.

Creditors aren’t obligated to settle but may if it benefits them.

If you’re current on your bills, the debt settlement company might advise you to stop paying your creditors, which will theoretically motivate the creditors to settle the debts. “Creditors are not required to accept debt settlements but may if they think it is in their best interest,” said Zigmont.

Debt settlement companies sometimes start by negotiating your smallest debts first, leaving larger debts to accrue interest or late payment fees. So, make sure you work with your settlement company to prioritize debts strategically.

» RELATED: Debt snowball vs. debt avalanche

Debt settlement success

A successful debt settlement journey typically means resolving unsecured debts for less than the full balance owed while avoiding bankruptcy. Outcomes vary based on how delinquent the account is, the creditor’s policies and the debtor’s ability to fund settlements.

In terms of time to resolution, most debt settlement programs last between 24 and 48 months. Smaller debts may be settled sooner once enough funds accumulate, while larger balances typically take longer to resolve.

Typical settlement results often range from 40% to 60% of the original balance. Some creditors may accept less if an account is significantly past due or if the consumer can make a lump-sum payment, though fees should be considered when calculating total savings.

There are also risks during the settlement process. Accounts are commonly charged off, which can significantly lower credit scores, and some creditors may pursue legal action, especially for larger balances. Debt settlement companies can negotiate but cannot guarantee protection from lawsuits.

How much does debt settlement cost?

Expect to pay a fee of 15% to 25% of the amount of debt enrolled in their programs (i.e., the amount of debt they attempt to negotiate). It's also important to note that you'll likely incur additional fees and penalty interest rates from your creditors if you stop paying them during the negotiation process.

If you enroll $20,000 and settle for $10,000, expect to pay $3,000 to $5,000 in debt settlement fees.

Debt settlement pros and cons

While debt settlement programs have many benefits, it’s also important to understand their drawbacks. Debt settlement can negatively affect your credit score. Depending on the impact, it could take years to qualify for a good auto loan or mortgage after debt settlement.

Another downside is that debt settlements are reported as charge-offs on your credit report, and you’ll have to pay taxes on the amount forgiven, according to Zigmont. He advises: “If you do go down the debt settlement path, be sure to get everything in writing and send a check or money order for the settlement.”

Pros

  • No direct communication with credits
  • May significantly reduce debt owed
  • Might help you get out of debt faster
  • Can help you avoid bankruptcy

Cons

  • Takes a long time
  • Initial drop in credit score
  • Potentially high fees
  • No guarantees

Alternatives to debt settlement companies

The National Foundation for Credit Counseling (NFCC) explains several alternatives to hiring a debt settlement company. Some of the most common ways to resolve debt issues include the following:

  • Do it yourself: It is possible to negotiate your debts on your own by contacting your creditors directly. You will need a good explanation of why you can’t pay; if creditors believe you’re still financially capable of repaying your debts in full, they’re unlikely to be lenient with you. Some creditors offer hardship plans for people who are dealing with tough situations, like unemployment or a severe illness.
  • Hire a lawyer: A debt settlement lawyer can act as your personal debt settlement company, negotiating a settlement on your behalf, handling all the paperwork and fielding any phone calls from your lenders. Keep in mind that a debt settlement lawyer can bill by the hour, charge a percentage of your total eliminated debt or charge a flat fee per lender.
  • File for bankruptcy: While filing for bankruptcy might seem like the easiest way out of debt, it actually costs over $1,000 and should only be a last resort after considering options like debt consolidation or a debt settlement program. It can significantly damage your credit score and typically stays on your credit report for seven to 10 years. Bankruptcy cases are a matter of public record, so your current and future employers will be able to see if you filed for bankruptcy.
  • Get a debt consolidation loan: Multiple debts can be paid off with one credit product (that hopefully has a lower interest rate and better terms than your previous debts) through a debt consolidation personal loan.

» MORE: Debt consolidation vs. debt settlement

FAQ

What type of debts can be settled?

Unsecured debts, like most credit card balances and medical bills, are the most common types of debt involved with settlement agreements. Other types of debt eligible for the debt settlement process include payday loans, private student loans and some business loans.

How much does debt settlement cost?

Debt settlement companies usually charge a fee of 15% to 25% of the amount of debt enrolled in their programs, i.e., the amount of debt they attempt to negotiate. It's also important to note that you'll likely incur additional fees and penalty interest rates from your creditors if you stop paying them during the negotiation process.

What percentage of my debt should I offer to settle?

Depending on how behind you are on payments and how much you owe, your creditor might be open to settling for as little as 40% of your original debt. Negotiate with your creditors to get the most substantial settlement you can, but remember, they’re not obligated to agree to any settlement offer.

Are debt settlement companies legit?

Some debt settlement companies are legitimate, but the industry also has bad actors. Reputable companies are transparent about fees, do not charge upfront and are accredited by recognized organizations. Consumers should research reviews, complaints and licensing before enrolling.

How much does debt settlement hurt your credit score?

The impact varies based on your credit profile, but recovery can take several years after settlements are completed. Debt settlement typically causes a significant drop in your credit score because accounts often become delinquent or charged off during the process.

Can I be sued while in a debt settlement program?

Yes. Creditors are not required to wait for a settlement and may file a lawsuit to collect the debt, especially for large balances. Debt settlement companies may help with negotiation strategies, but they cannot guarantee protection from legal action.

What happens if debt settlement fails?

If settlements cannot be reached, you remain responsible for the full balance plus any fees or interest that accrued. Consumers may need to explore other options, such as credit counseling, debt consolidation or bankruptcy.

Is debt settlement better than bankruptcy?

Debt settlement and bankruptcy serve different purposes. Debt settlement may allow you to avoid bankruptcy and reduce what you owe, but it still damages credit and offers no guarantees. Bankruptcy provides legal protection from creditors but has long-lasting credit and public record consequences. The better option depends on your financial situation.

Methodology

To update our top picks, the ConsumerAffairs Research Team used a weighted scoring system that took into account both reviews from ConsumerAffairs users and specific company offerings we researched. We conducted sentence-by-sentence sentiment analysis of thousands of reviews on our site from Dec. 1, 2021, to Nov. 30, 2024, to identify the aspects people care about most — and which companies reviewers are happiest with for each aspect. For debt settlement, these included:

  • Customer service satisfaction
  • Process satisfaction
  • Transparency satisfaction
  • Staff satisfaction

We then carefully selected the most important offerings consumers should consider before choosing a debt settlement company and researched these features of each company:

  • Minimum debt amount
  • Maximum cost (% of enrolled debt)
  • Maximum average time to settlement in months

The company with the highest score in each category’s uniquely weighted formula was given the “Our pick for” or “Best for” designation. In some cases where a single company received the top score across multiple categories, the company with the next-highest score was named the winner.

Not sure how to choose?

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