National Debt Relief vs. Freedom Debt Relief

Fees: what each program costs

National Debt Relief charges up to 25% of the debt you enroll. The rate depends on your state and balance, and it collects nothing until a debt is settled. Its site does not list the monthly cost of the dedicated account, so ask for it in writing.

Freedom Debt Relief charges 15% to 25% of enrolled debt, also set by state and balance, and collects only after you authorize a settlement and the first payment goes to the creditor. The dedicated account at Crossroads Financial Technologies costs $9.95 to open and $9.95 a month, and payment fees may apply. Over a 48 month program that is about $490 in account fees.

Both fees are a percentage of the debt you enroll, not of the amount you save. On $20,000 enrolled, a 25% fee is $5,000 on top of what you pay creditors. Freedom’s lower floor only helps if your state and balance put you at the low end, so get the exact rate quoted before you compare.

Freedom adds a written guarantee: if your settlements plus its fees come to more than the debt you enrolled, it refunds the difference, up to 100% of the fees it collected. National Debt Relief does not publish a similar guarantee.

Neither fee covers what else goes wrong while you save. Interest and late fees keep growing on unpaid accounts until they settle, and the IRS generally treats forgiven debt as income, so you may owe tax on it unless an exclusion such as insolvency applies.

Savings: what clients actually keep

This is the clearest difference. National Debt Relief publishes a net figure. Its disclosure says clients who stay in the program and settle all their debt save about 45% before fees, or about 20% including fees, over 24 to 48 months. On $20,000 of enrolled debt, that means paying roughly $16,000 in settlements and fees combined. The company also notes that not all clients complete the program.

Freedom Debt Relief does not publish an average savings figure. It publishes its fee range and the refund guarantee, which caps your total cost at the amount you enrolled, but it does not say what a typical client ends up paying.

A 20% net saving is real money, but it is far less than the headline numbers in debt relief ads. Weigh it against the cost of the credit damage. If you could repay the full balance through a nonprofit debt management plan at a lower interest rate, you may come out ahead without the missed payments. Results vary by creditor, state and how steadily you make deposits.

Track record and credentials

National Debt Relief has operated since 2009 and says 1.5 million people have enrolled and more than $20 billion has been settled. It has held an A+ rating from the BBB and been accredited since 2013, is an ACDR member and is IAPDA Platinum accredited. On Trustpilot it rates 4.7 out of 5 from 45,344 reviews.

Freedom Debt Relief has operated since 2002 and says it has served more than 1 million clients and resolved more than $20 billion. It has held an A+ from the BBB and been accredited since 2015, was a founding member of the ACDR and is an IAPDA platinum member. It rates 4.6 out of 5 from 51,652 reviews on Trustpilot.

Both are large, established programs, so the choice comes down to your quoted fee, your state and which extras matter to you: a published after-fee savings figure from National Debt Relief, or Freedom’s fee refund guarantee and lawsuit help.

How the two programs work

The steps are nearly identical, and both follow the FTC’s Telemarketing Sales Rule:

• Free consultation. A consultant reviews your debts, income and budget. Both companies may offer a loan instead if you qualify: National Debt Relief through partner lenders (6.25% to 35.99% APR), Freedom through its sister company Achieve.
• Dedicated account. You make one monthly deposit into an account in your name at an insured institution. You own the money and can withdraw it.
• Stop paying enrolled creditors. Accounts go delinquent, collection calls follow and creditors may sue.
• Settlements. When enough builds up, the company negotiates and you approve each offer. Freedom says the first one usually comes in months 4 to 6.
• Fees per settlement. Each fee is charged only after a settlement is approved and paid.

Both say programs run 24 to 48 months and that you can leave at any time without a penalty, getting your account balance back, minus fees already earned, within seven business days. Debts you never settled stay in default, so plan for them before you cancel.

Check these options before either company

Debt settlement works by missing payments on purpose, so it should come after cheaper options. The CFPB warns that settlement can hurt your credit scores, that creditors can sue while you save, and that late fees and interest can leave you owing more than when you started.

• Nonprofit debt management plan. An NFCC member agency can lower your interest rates and roll your cards into one payment. You repay the full balance, but you keep paying on time.
• Consolidation loan. If your credit is fair or better, a fixed-rate loan replaces several card payments without the late marks.
• Call your creditors. Many card issuers run hardship programs or will settle directly, with no 15% to 25% fee.
• Bankruptcy consultation. If you are already being sued or the debt is unmanageable, a bankruptcy attorney can explain the automatic stay, which settlement cannot provide.

If you still choose settlement, get written quotes from both companies with the same enrolled balance, and compare the fee rate, the monthly deposit, the estimated program length and the account fees side by side.