Freedom Debt Relief vs. Americor

Fees: who costs less?

It depends on your state. Freedom charges 15% to 25% of the debt you enroll. Americor charges 14% to 29%. Americor’s floor is a point lower, but its ceiling is four points higher, so on $20,000 of enrolled debt Freedom’s fee runs $3,000 to $5,000 and Americor’s $2,800 to $5,800. That is our arithmetic from each published range, not a quote. Both collect the fee only after you approve a settlement and a payment goes to the creditor.

Freedom itemizes its dedicated account costs: $9.95 to open and $9.95 a month, paid to Crossroads Financial Technologies. Americor says account fees are set by the third-party provider and are not refunded if you leave, but its program page doesn’t list the amount. Ask for it in writing.

Only Americor publishes a result. It says clients who make all program payments save approximately 40% to 50% of their enrolled debt, an average of 45%, before its fee. Subtract a 14% to 29% fee and the net is much smaller. Freedom doesn’t publish an average. Both say results vary and not everyone completes the program.

Freedom also refunds from its fees if your settlements plus its fees end up higher than the debt you enrolled, up to 100% of fees collected.

How the programs differ

The basic steps match. You enroll unsecured debts like credit cards, personal loans and medical bills, deposit money each month into an account in your name and usually stop paying those creditors. Neither program takes mortgages, car loans or federal student loans.

Americor adds a rule: you must save at least 25% of each enrolled debt before it makes a settlement offer on that debt. It says the first settlement comes on average 3 to 6 months after you enroll and that clients who finish take 35 months on average. Some Americor programs may be offered through The Law Firm of Higbee and Associates, doing business as Advantage Law, so check which name is on your agreement. After six months, some clients can apply for a consolidation loan from sister company Credit9.

Freedom says its first settlement typically comes in months 4 to 6 and programs average 24 to 48 months. If a creditor sues, its Legal Partner Network of attorneys tries to settle the case. That is included only while you make every deposit on time, and the attorneys don’t represent you in court.

Americor says its program is not available in all states and lists 47 state pages. Freedom doesn’t list states on its FAQ, so ask.

Track record and ratings

Both companies are legitimate, licensed in California and rated A+ by the BBB, accredited since 2015.

Freedom Debt Relief has operated since 2002, says it has served more than 1 million clients and is a subsidiary of Achieve. It rates 4.6 out of 5 from 51,652 reviews on Trustpilot.

Americor rates 4.7 out of 5 from 17,594 reviews on Trustpilot and lists state pages for 47 states. It publishes more of its program rules up front, including its $7,500 minimum and its 25% savings threshold before offers go out.

Credit, lawsuits and taxes

Both programs carry the same risks because both are debt settlement. You stop paying the enrolled creditors while you save, so your credit reports will show late payments, charge-offs and collections, and late payments stay for up to seven years. Creditors can sue you before your debt settles. Interest and late fees keep growing on unpaid accounts. Not every creditor agrees to settle, and results vary.

Forgiven debt is generally taxable. Creditors may send Form 1099-C, and an exclusion such as insolvency may let you leave some or all of it out of income. Talk to a tax professional before you settle large balances.

You can leave either program without a cancellation fee. The money in your account comes back to you minus fees already earned on settled debts and third-party account fees.

If you can still make your minimum payments, price a nonprofit debt management plan first. It repays the full balance at lower interest without missed payments, so your credit takes far less damage. If a creditor has already sued you, talk to a consumer attorney before enrolling in either program.