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Freedom Debt Relief & Debt Settlement Advice

I cannot decide which is better Consumer Credit Counseling Services or Debt Settlement with Freedom Debt Relief.

I cannot decide which is better: Credit Counseling Services or Debt Settlement with Freedom Debt Relief. What's best?

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Bill's Answer
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Bills.com | Find Learn Save

Thanks for your question. First of all, Freedom Debt Relief is a good company (I’ll give you some more info on that later) — they do debt settlement. You should first decide if debt settlement or credit counseling is right for you… and then pick a company. Both solutions have pros and cons, but if you choose debt settlement then I can tell you that Freedom Debt Relief is a good company. You can also look at the Freedom Debt Relief Web site and contact them directly for more information.

You can read more reviews at the Freedom Debt Relief Reviews Web site.

I’ll go into a bunch of detail below on all of your issues below (grab a cup of coffee!) If, however, you want to apply with one of Bills.com’s pre-approved debt help firms, you can always click here: Debt Relief Savings Quote

I’ll outline your primary debt resolution options first, and then give you some info on freedom debt relief. Since debt consolidation comes in many forms, it is important that each consumer reflects on what their needs and concerns and financial situation is before signing up for an online debt consolidation program. The four primary concerns for most consumers are: i) monthly payment, ii) time to debt freedom, iii) total cost, and iv) the credit rating impact of the consolidation program. Be sure to evaluate each program, relative to your prioritization of these factors.

Debt Settlement

Debt settlement, also called debt negotiation, is a form of online debt consolidation that cuts your total debt, sometimes over 50%, with lower monthly payments. Debt settlement programs typically run around three years. It is important to keep in mind, however, that during the life of your debt settlement program, you are NOT paying your creditors. This means that a debt settlement solution of online debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving money and a low payment that gets you debt free fast. We would recommend that you also read our Debt Settlement Advice article with tips and advice on how debt settlement can be done.

Credit Counseling

Credit counseling, or signing up for a debt management plan, is a very common form of online debt consolidation. There are many companies offering online credit counseling, which is essentially a way to make one payment directly to the credit counseling agency, which then distributes that payment to your creditors. Most times, a credit counseling agency will be able to lower your monthly payments by getting interest rate concessions from your lenders or creditors. It is important to understand that in a credit counseling program, you are still repaying 100% of your debts — but with lower monthly payments. On average, most online credit counseling programs take around five years. While most credit counseling programs do not impact your FICO score, being enrolled in a credit counseling debt management plan DOES show up on your credit report… and, unfortunately, many lenders look at enrollment in credit counseling akin to filing for Chapter 13 Bankruptcy — or using a third party to re-organize your debts.

Debt Consolidation Loan

Many people think of a debt consolidation loan when seeking online debt consolidation. This option typically means a second home loan (or home equity line of credit) or refinancing your primary mortgage. In a debt consolidation loan, you exchange one loan for another. The most frequent form is taking out a mortgage loan, which carries a lower interest rate and is tax deductible, to pay off high interest rate credit card debt. It is important to be aware that shifting unsecured debt to secured debt can create a volatile situation, if there is ever a chance that you cannot afford the new mortgage payment you are now putting yourself at risk of foreclosure! In the case of a debt consolidation loan, most mortgages are 30 year loan, which means that the total cost and the time to debt freedom could be very high… but the monthly payment will be lower than other options and there is no credit rating impact.

Although there are many forms of online debt consolidation, many people with good to perfect credit who own homes should look into debt consolidation loans, while consumers with high credit card debt and poor credit may want to explore debt settlement or debt negotiation. However, each consumer is different, so find the online debt consolidation option that fits for you. Also, if you want negotiated debt settlement, then Freedom Debt Relief is likely your best option.

So, now onto Freedom Debt Relief:

Yes, Freedom Debt Relief appears to be a great option, if you are seeking debt resolution or negotiated debt settlement. We have done a thorough review in the Bills.com resource Freedom Debt Relief Review.

Here are the facts:

  1. Freedom Debt Relief is a member of the Better Business Bureau.
  2. Freedom Debt Relief appears to be one of the largest debt resolution firms in the country.
  3. The Founders of the Company are Stanford Business School alumni with impressive backgrounds in the financial services industry.
  4. One of the Founders of Freedom Debt Relief is on the Board of Directors of The Association of Settlement Companies (TASC) and was a Founding Board Member of USOBA!
  5. They look stable.

In the spirit of full disclosure, we do consider Freedom Financial Network and it's related entities as sister companies and think very highly of the teams at Freedom.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

VIDEO: Debt Settlement - What is Debt Settlement?

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6 Comments

Recent Best
1500 characters remaining
  • MI
    Jan, 2011
    megous
    New York, NY
    A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services.
    0 Votes

  • DM
    Oct, 2010
    Debt
    A recent survey by insolvency group R3 has found that 67,000, or seven percent, of almost one million people struggling with debt had contacted a lender.
    0 Votes

  • 35x35
    Mar, 2009
    NashG
    Thanks
    0 Votes

  • BA
    Dec, 2008
    Bill
    Good luck Harriet.
    0 Votes

  • HM
    Dec, 2008
    Harriet
    I have taken your advice. I will let you know how it goes with freedom debt.
    0 Votes

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