Freedom Debt Relief – Peer Review
We recently sign up with Freedom Debt Relief for there services. We are concerned about a possibly being sued by our creditors.
Any suggestions or steps to take to protect ourselves from a law suit or frozen bank accounts if it should come to that?
What is your opinion of Freedom Debt Relief?
—Ron
Freedom Debt Relief is one of the larger companies offering debt settlement services in the nation. My opinion of Freedom Debt Relief is much the same as it is for most debt settlement companies, and your question goes direct to the concerns I have with hiring a traditional debt settlement company.
Risks to settling debt using FDR – any other service – even DIY debt settlement.
You raised the biggest concern most people should have, that of being sued before you have the chance to negotiate an agreement and settle your debts. When hiring a debt settlement company to do the negotiating and settling for you, the companies fees have to be factored into the overall costs of using debt settlement to avoid bankruptcy.
A debt settlement companies fees will directly impact how long it takes to settle all of your accounts. The higher the fees, the longer it takes to resolve accounts. The longer it takes to settle each credit card, the risk of being sued in order to collect increase.
Who you owe can increase the risks of being sued.
Some creditors are just more forgiving than others. Who you owe does impact your risk profile. I do not know if Freedom Debt Relief walks you through a risk profile with the credit card debts you are going to try and settle with. I am not aware of many debt settlement companies that do.
If you want to post answers to the following questions in a comment reply, I can help you with a risk assessment based on the detail you post:
Name of each individual credit card issuer?
Approximate balance owed on each credit card?
When you last made a payment on each credit card?
If your credit cards are already late by several months, are you hearing from debt collectors, and if so, the names of those debt collectors?
The state you live in?
What loan products and open credit accounts secured (car, home), or otherwise, do you have that are current, or will be kept current during your debt settlement program?
Debt settlement monthly savings plan with Freedom Debt Relief.
A debt settlement companies fees add time to your ability to settle debt and get out of harms way with lawsuits. Another area of concern with settling debt and timing is your savings plan. Most negotiation companies present people with program time frames of 24 to 48 months. What was the savings timeline Freedom Debt Relief gave you? This would be the estimated program length.
Debt settlement program time frames are often estimated to run a length of time that is consistent with your ability to set aside a certain amount of money each and every month that will get deposited into a special purpose account. The way this amount of monthly savings is determined in your initial call with a debt settlement company is usually based on your monthly cash flow from income. As you build up money into this savings and hit certain accumulation bench marks, a firm like Freedom Debt Relief will then negotiate a settlement and knock down one credit card debt at a time. With one settlement done, and a depleted savings fund, you continue to save month after month until there is enough to settle the next credit card. Wash-Rinse-Repeat.
I do not know if Freedom Debt Relief prepares their customers with the option to be much more aggressive with savings or not. Just know that the faster and more you are able to add to your debt settlement savings war chest, the quicker you are out of credit card debt and the more you diminish, or even eliminate, the risk of being sued.
I advocate people work on settling their own debts when and wherever possible, and only use a professional negotiator when you cannot or will not get a deal on your own. Knocking down some of the debts on your own if you have a few credit cards with some of the more forgiving creditors just makes sense. This way you save on fees and only use a pro for the tough stuff.
I also know that the majority of people would prefer to have a professional handle their settlements from start to finish. Freedom Debt Relief and other debt settlement companies fill a large niche in the debt relief services industry.
Freedom Debt Relief releases reports about the amount of credit card debts they settle.
FDR knows how to settle debt, no question. How they go about it is pretty standard for the debt settlement industry at large. My opinion of Freedom Debt Relief is not really an opinion of the company itself, its more of an opinion of the industry as a whole.
There are other concerns for hiring a debt settlement company than what I outlined above. I am keeping my answer limited to the scope of your main concern, which is the risk of being sued. My suggestions for limiting that risk will be based on your follow up comment reply answering the above questions I have about your creditors.
Anyone one reading this page is welcome to post a comment reply below with answers to the same questions I asked Ron above. I will respond with my feedback.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry, and is a regular contributor to several personal finance websites.
Hello,
I’m 23 years old and I signed up with FDR about 1 month and a half a go. I have the following debts:
Barclay bank :$10,000.00
Wells Fargo $4,500.00
Comenity bank (Victoria Secret) $800
Comenity bank (Ulta) $700
AA City Bank ($1800)
Can I pay off my cards that are under $1k while being on the FDR program? Should I stay with this program or contact the créditos myself and try to settle? I feel a bit overwhelmed as the last thing I want is to get sued by a creditor. Thank yoh
You can pay off debts you do not want to settle. And it often makes more sense to pay off small accounts instead of settling them. See this for more: http://consumerrecoverynetwork.com/credit-card-debt-to-include-in-settlement-plan/
Most debt settlement companies charge high fees. Freedom Debt Relief often charges fees higher than 20% of your total balances enrolled in their program.
You can settle debt effectively on your own and save a ton in fees.
You can also work with a professional negotiator that only charges 15% of what they save you (your interests are better aligned than the way Freedom and other companies charge). You can learn more by clicking on get debt help in the upper right corner and completing your user profile.
Michael,
I am 33 years old. Recovering from gambling issues in the past. I have the following debts and am seeking advice for repayment options as the bills/interest from cash advances are really destroying me.
Capital One- $4,005.00 (4,000 limit)
My local credit union $5,500 ($7,000 limit)
My local CU loans (2 loans) (one has a balance of $8,200) the other for $4,100.
Student Loan (Sun Trust) $12,400 remaining
Key Bank Loan $8,000 remaining
I have not missed a payment. But, I am not getting ahead as the interest rates are so high. What do you suggest I do. I am trying to avoid a service like FDR as they want to put me in a plan for 46 months @ $500 a month. This seems like far too long.
Assume you settle all the debts at 50%, so roughly 21k. How long does it take to either save up monthly while you are not paying, take on extra work, borrow from family, sell some stuff you don’t mind parting with, to come up with the money?
Do you have a dependable job? Been there a while?
What state are you in?
Have you look at your options with chapter 7 bankruptcy?
I am 79 yrs next month. My wife is 74 yrs in June.We are no longer able to work or generate income for several years now. Our only income is social security $2070 per month combined.we previously filed chapter 7. Discharged April 2010. We enrolled in Freedom Debt Relief October 2016.
Wells Fargo $2267 last pmt 8/25/16
Wells Fargo $5985 “‘ 9/14/16
Barclay $9645 9/21/16
Barclay $10,345 9/21/16
Capitol One $1200 9/23/16
We also have 2 Synchrony (care credit) accts that we must enroll last pmts 11/23/16 (all dental work)
they want 3 good faith pmts to enroll these accts.
We have 1 credit card with capitol one that is open and up to date. approx balance $600
No other loans or pmts
We live in Arizona
Since my wife and I need even more dental work should I
1 Stay with FDR or
2 Since all my income is from SS stop all pmts and let them try and get a judgement which they will be unable to collect.
Is it even likely they will try tu sue because of my situation?
Thank You in Advance
RJB
Do you own your home? If so, how much equity do you have?
I rent the home. Do not own
.RJB
With little to no assets, and income only from an exempt source, you could be judgment proof as you pointed out. There may be other compelling reasons to negotiate settlements in your situation. What is your primary motivation for settling? What is the length of time Freedom Financial quoted you for having settled everything?
Hi Micheal I called FDR and I was given 5 choices to lower my debt the rep wanted me to settle for the Debt negotiation.
She practically suggested that 4 out of the 9 accounts totaling 16,000,00 . Highest to lowest
Barclay , (2 )Capital one , Amex, . Should I do debt negotiation ? What are your thoughts
Post a reply with the name of each bank and the corresponding balance for each account. I will reply with an estimate of what you would need to settle, and suggestions about how quickly to raise the money. The state you live in can impact my feedback, so include that.
Thank you for responding !!
Barclay $6600.00
Amex $2000
Cap1 quick silver $2000
CAP 1 $2000
Cap 1 quick silver $750
WELLS Fargo $1250
Bestbuy $1000
Gap $700
Macy’s $600
Chase credit $500
We live in NYC (Bronx)
I would target your settlements like this:
Barclay 35% is about $2300.
AMEX 50% is 1k.
Capital One at 40% for a combined $1900 (I included the $750 balance but do not like settling lower balance accounts if they are current right now).
Wells Fargo, Bestbuy, Gap Synchrony, Macy’s and Chase are all accounts I would keep out of a settlement program. Those balances are too low to get much benefit out of settling because your balances inflate when you are not paying. The smaller the debt the more likely it can double or triple before you settle, and that can mean you end up paying what you owed originally, or even more. If you are already late more than 90 days, and are going to be able to settle quickly, I would go with it.
Those accounts total $17,400. Can you afford to $330 a month to pay all of the debts and stay out of a settlement program?
If you do end up going with settlement, how soon can you come up with the money needed to settle the bigger debts?
I just went with FDR, I felt relieved at first because I have no problem paying the fee,however,I ve been reading some reviews and now I am really worried. Should I be??
Who are your creditors and what are the balances? I can offer better feedback about what concerns you with that information.
Think they are good for private student loans? upwards of 30k?
I do not know if Freedom Debt Relief handles student loan settlements. They did not last I knew, but that could have changed.
My main criticism of FDR will apply, which is their fees are too high.
I am thinking about signing with Freedom Debt Relief to settle $30000 CC debt (Discover, Capital One, Chase, Citibank
Program debt for 5 credit cards totaled $30,605. They want to set me on a plan of $510 for 46 months
First ff my accountant said I will be taxed on the savings at the end of program estimated at $6,744.
My main concern is that they said it does not affect my husbands credit because he is not on these said accounts. Is this true? Would my husband be liable for anything? He has a job at a nuclear facility where he needs his good credit score in order to keep his job. Would a debt management program be better since none of my payments are late. I am just frustrated because one card is at 22% for 7000, another is at 16.24% for 8,000 and almost 2000 at 19.99% ??? What do you recommend?
If your husband is not a co borrower or authorized user on any of the accounts, than his credit should not be hurt from your accounts falling behind before a settlement can be reached.
My concern is that you have 2 aggressive creditors in Capital One and Discover. Being sued by one or the other if you cannot settle with them quickly – and Freedom Debt Relief is not encouraging you to settle fast – can impact more than just you (still will not hurt his credit though).
You should be able to keep things apart from your husband credit wise, and in any other way too, if you raise money quicker. Why is the 46 month savings necessary? If you are going to stretch this that long you may be better off with a debt management plan. Review this reader question and my feedback where I compare debt settlement with a debt management plan.
I wanted the Debt Management Plan but the Freedom Debt relief associate was adamant about selling me the “Debt Settlement”. I know why now after I’ve seen all the fees and money they make (22%)
Who do you recommend I speak with that debt management plan?
Call my hotline at 800-939-8357, when you hear my voice for the options available hit 1, and that will connect you to a certified non profit offering debt management plans. Let me know if the monthly payment quote is not affordable, but I do not think it will be based on what you shared so far.
I am currently enrolled with Freedom Debt Relief, and have 7 settlements that have been reached so far out of the 20 enrolled. One of the creditors recently placed a judgement against me on 2/4/16, I found out the information on Maryland Judiciary Case Search. I have not received my court date notification as of today.
I have been reading from other clients that Freedom Debt Relief will not assist me in judgements placed.
Please advise options of what my best plan of attack will be in getting this resolved.
Who is the creditor suing you, and for how much?
Can you pull together half the amount you owe on this account, and if so, how long would it take?
Hi Michael, I jut got divorced and i cant afford my c/c payments. Do you think I should enter Freedom Debt Relief with what you see below? They said payment would be about 450.00 month 48 months
total debt Limit Balance monthly payment
Avenue $500.00 $476.00 $25.00
Torrid $750.00 $344.00 $25.00
Barclay $2,500.00 $2,500.00 $80.00
Capital One $1,000.00 $900.00 $25.00
Discover $1,300.00 $1,200.00 $35.00
Best Buy $2,500.00 $1,200.00 $25.00
Paypal $1,070.00 $1,070.00 $31.00
JC Pennys $2,000.00 $1,200.00 $50.00
Amazon $1,700.00 $1,239.00 $50.00
Walmart $1,900.00 $1,447.00 $50.00
Barclay $2,500.00 $2,500.00 $80.00
Merrick $2,500.00 $2,205.00 $65.00
Capital One $2,750.00 $2,487.00 $79.00
Barclay $3,000.00 $2,900.00 $80.00
Lending Club loan $6,000.00 $6,000.00 $217.00
My total monthly payments are at 917.00 now I cant do this anymore. Thank you for your advise
I would not enroll in any debt settlement plan that takes 48 months. That is just too long.
I would not enroll credit card bills into a debt settlement plan when the balance owed is less than 1k. You have a couple of those.
What are your interest rates on all of the accounts?
How short are you each month from being able to make the minimums?
Can you raise more money than what your monthly payment is set to be when using Freedom Debt Relief’s outline (sell an unused/seldom used item, tax refund, etc)?