Full Answer
What is Freedom Financial Debt Relief?
Freedom Debt Relief is a process that helps people get out of debt. It does this by working with creditors to reduce or eliminate interest rates, late fees, and other penalties. This makes the monthly payments more affordable, which allows people to pay off their debts faster.
Can debt relief help you get out of debt?
It’s a long-term solution designed to help you get out of debt over a period of time — typically several years. Debt relief plans can help make your payments more manageable, but they’re not right for everyone. It’s important for you to understand how each plan or program works and how debt relief can affect your finances. Need to consolidate debt?
Is first choice debt relief good at settling debts?
Most of the best debt relief companies have a membership or accreditation with the AFCC, yet First Choice Debt Relief has neither. First Choice Debt Relief offers debt settlement, which is a debt resolution strategy that can help you settle and pay off unsecured debts.
Is it better to pay off debt or settle debt?
It is alway preferable to pay off your debt in full, IF possible. Although settling your debt for a smaller amount will not hurt your credit as much as not making any payments, it is still considered a red flag for lenders. However, there are times when settling your debt can be a smart move.
How much will Freedom Debt Relief pay?
Expect to pay Freedom Debt Relief between 18% and 25% of the enrolled debt. Even though you will be making one regular payment to FDR, your accounts will be settled one by one. For instance, once FDR wraps up talks on credit card #1, it will get in touch with you so you can authorize the settlement. This is when it will process its fee, which gets tacked on to your regular payments. The process continues with credit card numbers two and three and so on until all your debts have been negotiated.
How long does it take to settle a Freedom Debt Relief account?
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 are the pros and cons of freedom?
Pros of Freedom Debt Relief 1 Reduce debts by up to 50% 2 Offers legal counsel to eligible clients 3 Stops or limits calls from pesky creditors
What happens if you default on a loan?
When you default on a loan, creditors may sue you to get their money. Freedom Debt Relief partners with a network of attorneys to help provide counsel to its clients. The cost is included in the service, but if things advance to court, the client may have to pay for court fees and costs. If you want to qualify for legal representation make sure to have all your escrow deposits up to date.
What happens if you don't settle your credit card debt?
If you fail to complete the debt settlement program or if FDR is unable to reach an agreement with your creditors, you will be stuck with all the accumulated fees from defaulting on your credit card debts, not to mention making a mess of your credit report.
How long does it take to pay off debt?
Debt management helps borrowers pay off their debts in 36-60 months. You won’t get out of paying what you owe, but you may be able to cut down interest and eliminate late fees. Another plus is it won’t damage your credit report.
Can you talk to creditors about Freedom Debt Relief?
You begin making deposits into an FDIC-insured savings account. Freedom Debt Relief can’t begin talks with your creditors until you’ve saved a certain amount in that account. Think of it as building leverage. Your creditors won’t come to the table unless you show them in a language they can understand, that you mean business.
How does Freedom debt settlement work?
The debt settlement process: The process at Freedom is typical of most debt settlement companies. Once you enroll, you stop making payments to your creditors. Instead, you open a separate savings account, which you’ll own and control, and deposit monthly payments into this account. Freedom works with clients to determine the amount to be deposited each month into the dedicated savings account. The amount is based on your ability to pay and the amount of total enrolled debt, according to the company.
What is Freedom Debt Relief?
Freedom Debt Relief, the largest debt settlement services provider in the country, negotiates with creditors to reduce the amount of unsecured debt you owe.
How long does it take for bankruptcy to clear?
Bankruptcy. Bankruptcy can resolve your debt under protection from a federal court. Chapter 7 bankruptcy will typically erase most debts in three to six months. If you’re delinquent on debt, it will stop calls from collectors and lawsuits against you.
How long does it take to repay credit card debt?
This is a better option for someone who has a steady income to repay credit card debts within three to five years. You’ll pay a nonprofit credit counseling agency to consolidate your debts into one monthly payment at a reduced interest rate. Compare debt management and debt settlement.
How long does Freedom take to complete?
Freedom’s customers require an average of three years and 10 months to complete its program. Interest and fees accumulate: Over the period in which you’re enrolled in a debt settlement program, you’ll accrue additional interest and late fees on your debt.
What happens if you don't pay your Freedom debt?
If you fail to stay on the program long enough to complete it, or if Freedom fails to negotiate a settlement, you’ll be stuck with the higher balance. You may still hear from debt collectors: Because you stop paying your accounts, you may receive aggressive collection attempts or even lawsuits from your creditors.
How much does Freedom charge?
The fee is based on the amount of the enrolled debt and ranges from 18% to 25%. Fees may vary depending on the state you live in, according to the company.
How many clients does Freedom Debt Relief have?
Freedom Debt Relief, the largest debt settlement service provider in the nation, has resolved more than $10 billion in debt for more than 650,000 clients since 2002. Those clients seem to be mostly satisfied with their experience, giving it 4.6 stars out of 5 on Trustpilot.
How long does it take to get a debt settlement with New Era?
The average time to complete a program with New Era is 28 months. It doesn’t disclose if there’s a minimum amount of qualifying debt to enroll in its program.
What are the risks of debt settlement?
Debt settlement comes with significant risks that you should be aware of before entering into an agreement. These risks include: 1 Damage to your credit. Debt settlement companies often encourage you to stop making payments to your creditors. This can severely damage your credit. It can also cause you to accrue interest, late fees and penalties on your existing debt, pushing you deeper into debt. You could receive calls from creditors or, in some cases, be sued for repayment. 2 High costs. Programs for debt settlement may require you to put money away for many months or years before your debt is settled. This can be very costly and, if you can’t afford the monthly payments, you may have to drop out of the program. Ensure you can truly afford to put away a significant amount of cash per month before entering into a debt settlement program. 3 No guarantee. Your creditors are not obligated to negotiate with you or a debt settlement company. There’s a chance that the debt settlement company you hire won’t be able to settle all of your debts, leaving you with growing debt during and after the process.
How does debt settlement affect credit?
Damage to your credit. Debt settlement companies often encourage you to stop making payments to your creditors. This can severely damage your credit. It can also cause you to accrue interest, late fees and penalties on your existing debt, pushing you deeper into debt.
How long has New Era Debt Solutions been in business?
New Era Debt Solutions has been in business for 22 years and settled more than $250 million in debt for its clients. With an A+ rating from the Better Business Bureau and a 4.9 out of 5 star rating on Trustpilot, it ranks high for customer satisfaction and tends to be well regarded by clients.
What is the American Fair Credit Council?
Look for the company to be a member of the American Fair Credit Council, which supports, enforces and advocates for consumer rights for Americans with financial hardship and debt burdens. The council holds companies to high standards and promotes best practices.
How long does it take Century Support Services to settle debt?
It’s been in business for nearly a decade, served more than 250,000 customers and settled more than $1.3 billion in debt. It typically takes around 24 to 48 months to complete debt settlement with this company.
How much does a debt settlement company charge?
Debt settlement companies charge a fee, generally 15-25% of the debt the company is settling. The American Fair Credit Council found that consumers enrolled in debt settlement ended up paying about 50% of what they initially owed on their debt, but they also paid fees that cut into their savings. The report gives an example of a debt settlement client whose $4,262 account balance was reduced to $2,115 with the settlement. So, at first it would seem she saved $2,147, the different between what she owed and what the settlement amount was. But she also paid $829 in fees to the debt settlement company, so she ended up saving $1,318.
How much money did a debt settlement save?
The report found that debt settlement clients settled an average of about 50% of what was originally owed, but realized savings of about 30%.
Why Work with a Debt Settlement Company?
Often there’s a good reason – a layoff or reduction in pay, big medical bills, an unexpected emergency expense. No matter what the reason, it can be difficult to get out from under overwhelming debt on your own. This is particularly true for credit card debt or other revolving debt, that never seems to decrease, even if you’re paying monthly.
What is debt settlement?
Debt settlement is an agreement made between a creditor and a consumer in which the total debt balance owed is reduced and/or fees are waived, and the reduced debt amount is paid in a lump sum instead of revolving monthly. Get Debt Help.
How long does it take for a debt settlement to pay?
Meanwhile, the company will negotiate with your creditors to settle for a lower amount. Once you’ve paid the amount the agreement is for into the escrow account, the debt settlement company will pay your creditor. This process can take 2-3 years.
What do debt settlement companies have to explain?
Debt settlement companies must explain price and terms, including fees and any conditions on services.
What happens when you settle a debt?
In debt settlement, the company will instruct you to stop making payments to the creditors. Your accounts become delinquent, and the debt settlement company tries to negotiate a settlement on your behalf. In the meantime, you give your money to the debt settlement company, who also is not paying the creditor with it.
