FAQs | Freedom Debt Relief (2024)

The type of debt relief Freedom Debt Relief offers is known by several names: debt resolution, debt negotiation, and debt settlement. Debt relief allows you to resolve your unsecured debt (debt that is not backed by collateral like a car or a house; most often credit card debt) by negotiating with creditors and reducing the amount you owe. You could negotiate with your creditors on your own or use a debt relief program like Freedom Debt Relief to help you settle your debt.

During the debt relief process, you usually voluntarily stop paying your creditors and start saving money in a special purpose account (what Freedom Debt Relief calls your 'dedicated account') that is used to hold the funds used to settle your debt. Once enough money is saved into this account, the debt relief company you hired contacts your creditors to negotiate a debt settlement amount that is lower than what you currently owe.

The impact a debt relief solution has to your credit score depends on the specific information found on your credit report at the time of enrollment, and how the specific information found on your credit report changes while in the program. Your credit report can be affected by the settlements you experienced while in the program (including how creditors report the information to the CRAs) as well as your credit behavior while in the program.

Depending on your existing credit score, in the debt settlement process you will likely see your credit score drop.

However, a key factor of your financial health is your debt-to-income ratio. As debts are settled, your total debt should decrease, thereby improving your debt-to-income ratio.

Across the industry, debt relief costs vary and are usually a percentage of the original amount of your debt or a percentage of the amount you've agreed to pay with the settlement.

Freedom Debt Relief’s fee ranges between 15% to 25% of enrolled debt (the amount of debt enrolled to be settled)–your rate may vary depending on your state of residency and amount you enroll.

In our program, clients pay FDR no fee whatsoever until a debt is negotiated, the settlement has been approved and the first payment has been made. You will know when a fee is charged because you will approve every settlement deal. Once we reach a settlement with a creditor, we immediately contact you for authorization. After you authorize a settlement and a payment has been made to your creditor, the fee associated with the debt is processed. The total fee associated with the program is included in the monthly savings quoted to you by a debt consultant.

FDR does not charge any upfront fees and only collects its fees after a settlement is authorized by the client and the first payment is made.

This fee amount is disclosed in full upfront and will never increase.

Note: As part of your debt settlement program, you open up a dedicated account with Crossroads Financial Technologies (CFT) to accumulate your settlement funds. You own this dedicated account and all funds in it. CFT collects fees for setting up and maintaining the dedicated account, and may also charge fees to make payments from the dedicated account. There is a one-time fee of $9.95 to set up the dedicated account, and a monthly fee of $9.95 that covers account servicing. Freedom Debt Relief does not share or receive any part of the fees paid to CFT.

Freedom Debt Relief is an established leader in debt resolution. Since 2002, over 1 million clients have been served by the Freedom Debt Relief program. We have resolved over $18 billion in debt. We have a team of committed experts working on your side: 500+ certified debt consultants, 200+ debt negotiators, and 300+ customer service representatives. We are an established employer with 1,300+ US employees in AZ, CA, and TX.

Lastly, Freedom Debt Relief formally has a promise to customers in place to ensure that we deliver results to our customers. This promise is called the Freedom Debt Relief Promise and it assures that: 1. Each prospective customer has an opportunity to learn about their debt relief options, even those beyond our services. 2. Each customer receives a personalized assessment and recommendation of the course of action that offers the best opportunity for consumers to achieve their financial goals. 3. Each customer is fully informed at each step of the process. 4. Each customer has a Program Guarantee that Freedom Debt Relief succeeds only when our customers succeed. In addition to only charging fees when FDR delivers settlements, the Program Guarantee states that when a customer graduates or leaves the program, FDR will refund fees if their settlement and fees are more than the amount they originally owed when they enrolled in the program.

• Credit counseling can help you learn to budget and stop overspending. Counselors can enroll you in a debt management plan where they typically lower your interest rates and set up a payment schedule, to simplify debt repayment and make it more affordable. Credit counselors control your (the consumer’s) money and when/how the money is distributed to the creditors.

• Debt settlement means convincing your creditors to accept less than you owe as payment in full. They may be willing to do so if you cannot afford to repay the full amount. With debt settlement, and specifically Freedom Debt Relief, you the consumer approve all actions by Freedom Debt Relief - i.e. Freedom Debt Relief does not control your money and when/how the money is distributed to creditors - everything must be approved by you, the consumer.

• Bankruptcy is a court-ordered plan in which you either surrender assets or pay into a plan to discharge some or all of your debts.

• Learn much more from this article about the differences between credit counseling, debt settlement and bankruptcy

Freedom Debt Relief has various benefits in place to assure that customers are placed at the center of everything we do, and that Freedom Debt Relief is the solution recommended only when it is truly the best fit for the customer’s needs and circ*mstances.

These benefits are in place with the Freedom Debt Relief Promise, which has four components in total that help assure that 1. You (the customer) can make informed decisions, with a free debt consultation; 2. You will be set up for success, with a free financial assessment that includes cash flow analysis; 3. You won’t be surprised, with clear terms and our commitment to transparency; and 4. You will get results, with our Program Guarantee* that states that if your total program settlement cost is more than the total amount of debt you enroll in our program, we’ll refund you the difference, up to 100% of our collected fees.*

Another benefit is our partnership with a network of attorneys, the Legal Partner Network, that specializes in debt negotiation. The cost of the Legal Partner Network service is included in your program and will be available to you as long as you make all your deposits on time and in the full amount. For more information, please see question:“What do I do if my creditor takes legal actions?”

Lastly, Freedom Debt Relief provides complimentary tools and guidance to help customers succeed including an online dashboard for clients, with access 24/7 and the ability to chat with Customer Service 7 days a week. In the dashboard, clients can access various videos and articles to grow your financial skills.

*For purposes of this settlement fee refund, your “FDR program settlement costs” are (a) the total amount you paid to your creditors through your FDR program, plus (b) the total settlement fees paid to us as described in Subsection 5.a. (excluding any other fees, costs or taxes you may incur).

In the event you charge, draw, or take advances on a debt after enrollment, that debt, and any FDR program settlement costs associated with that debt, will not be considered for purposes of this settlement fee refund.

Creditors may attempt to collect on enrolled debts by taking legal action. While we (FDR) are not lawyers or licensed to practice law, we want to make sure that if any enrolled accounts go into litigation, the debt can still be negotiated.

We’ve partnered with a network of attorneys, the Legal Partner Network, that specializes in debt negotiation. If any enrolled creditor files a lawsuit against a client, we may engage a Legal Partner Network attorney who will attempt to negotiate a settlement with the creditor.

The focus of the attorney is to try to get the creditor to settle the lawsuit and resolve the debt. The attorney will not represent the client in court or file paperwork.

The cost of the Legal Partner Network service is included in the program (without any subscription or service fees) and will be available to the client as long as they make all of their deposits on time and in the full amount.

Freedom Debt Relief helps consumers that have experienced a hardship (such as job loss, reduced income, unexpected expenses, medical, and divorce) and are struggling with unsecured debts, including credit cards, medical, department store and personal loan debts.

Should you decide to cancel your FDR program, you can do so at any time without penalty. You may terminate your Agreement by providing us with written notice of termination (which may be electronic).

Any funds that may remain in your Dedicated Account, minus fees for services already provided, shall be returned to you within seven (7) business days.

In some instances, we may ask that you participate in negotiations with one or more of your creditors. This participation may involve you joining one of our negotiators or representatives in communications with a creditor or, possibly, you communicating with a creditor directly. You are not required to participate in such negotiations. If you choose not to participate, we will discuss with you alternative strategies for settling that debt. You may request that we continue attempts to negotiate a settlement of the debt without your participation. You may also withdraw that debt from your program at any time before it is settled with no charge or penalty to you. If you withdraw a debt, we will continue our efforts to settle any remaining debts in your program.

If we do ask for your participation in negotiations with your creditors, and you agree to participate, we will advise you throughout the process, and we will charge our settlement fee, as described in your Debt Resolution Agreement.

You may terminate this Agreement and withdraw from your debt resolution program at any time, without any termination fee or other penalty. Upon withdrawal or termination from your debt settlement program, you are entitled to receive all remaining funds in your Dedicated Account other than the amount of settlement fees earned by us or fees earned by your bank or payment processor. You may withdraw from your debt resolution program by providing us with written notice of termination (which may be electronic).

We must receive your notice of termination at least three (3) business days prior to any scheduled electronic funds transfer in order to cancel the next deposit to your Dedicated Account from your bank. Subject to our verification of your identity, we may, in our sole discretion, accept a verbal termination notice. All authorizations to communicate with your creditors and any other authorizations we may have to act on your behalf will be revoked and will become ineffective immediately upon termination.

In the event that you fail to make any deposit or any payment required by this Agreement or otherwise fail to discharge any of your responsibilities and undertakings, we have the right to immediately terminate this Agreement, without any further obligation of any sort.

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