Everything is relative, right? Can you put a dollar amount on the peace of mind that comes with being out of debt? Not really, eh? But beyond that philosophical vantage point, are Freedom Debt Relief fees affordable?
Well, let’s take a look.
What is Freedom Debt Relief?
It’s a California-based debt settlement company that, since 2002, has served more than 650,000 individuals and resolved more than $10 billion in debt. The American Fair Credit Council, as well as the International Association of Professional Debt Arbitrators have accredited freedom Debt Relief.
What is Debt Settlement?
It’s a financial strategy in which a company such as Freedom Debt Relief goes to your creditors on your behalf in an attempt to resolve your debts for less than you owe. Rather than pay your creditors directly, you’ll deposit money monthly into a savings-type account from which your settlements will ultimately be paid. Creditors typically go along because they know they are likely to get zilch if you file bankruptcy.
How Much Debt Do I Need to Qualify?
You need to have at least $7,500 in unsecured debt such as from credit cards, personal loans and medical bills.
How Much Are Fees?
Once your debts are settled, Freedom charges a fee that is based upon how much debt you enrolled and the state in which you live. According to Freedom Debt Relief testimonials ,costs range between 15% and 25%, with the average fee being 21.5%.
Before clients enter the program, they get a full explanation of Freedom’s fee structure. You should avoid companies that are vague about what they’re charging. What’s more, once you’re in the FDR program, those fees never go up.
Note that, unlike some bad actors out there, Freedom doesn’t charge you until your debts are settled. In fact, that’s the law. Because each account is negotiated – and approved by you – individually, you’ll be charged for them separately. You could see your first account settled within the first four to six months of enrollment.
How Does the Cost of Debt Relief Compare with Other Options?
Well, compared with continuing to make minimum monthly payments, or even credit counseling, debt settlement is the least-expensive option, according to the American Fair Credit Council. On average, debt settlement means $2.64 in savings for ever dollar fee assessed, and more than 98% of all settlements result in a drop in debt that exceed attendant fees.
Say you have $25,000 in credit card debt. If you go the debt settlement route, the total cost to you will be $19,780. It’ll take $13,800 to pay off enrolled debt over 48 months. Conversely, with a debt management plan through credit counseling, you’ll pay $32,087 in total costs and $25,000 to wipe out enrolled debt over four years. If you stick with minimum payments, you’ll wind up paying $57,793 over 429 months.
So, are Freedom Debt Relief fees affordable?
Well, let’s put it this way; what you cannot afford is to keep doing what you’re doing, which will only dig you deeper in debt. Freedom’s fees are on par with other debt relief companies, which haven’t been around as long as pioneer FDR, by the way. You want experienced negotiators handling your financial situation.
And, debt relief is cheaper than some alternatives, including debt management through credit counseling. The financial strategy can be a viable way out of debt for those who can’t afford to pay the full amount owed, depending on your situation.