As you accumulate cash, Freedom can advocate on your behalf with creditors and try to convince them to accept less than the total amount you owe.Ĭertified Debt Consultants negotiate with creditors from a more even position, meaning you don’t have to have any more intimidating conversations with collectors. Freedom will then have you open a separate savings account in which you will deposit monthly payments.įreedom will work with you to develop a payment plan and make sure you pay as much as possible into that savings account. You enroll in their service and immediately halt making payments to your creditors. Though they’re an attractive debt relief company compared to many other organizations, Freedom’s actual debt settlement process is fairly typical. They take on clients who have a minimum of $7500 in debt, and they can work to tackle your largest bills (like credit cards with over $500 in debt) first and foremost. How Much Will You Likely Save? 20% to 35% on average after feesĪs a debt relief service, Freedom can help those with lots of unsecured debt from a variety of sources.Time Until Debt is Settled: 2-5 years on average.Fees/Costs: 18% to 25% of your enrolled debt.Typical Debt of Freedom Enrollees: Over $25,000.Thus, anyone considering Freedom or any other debt settlement organization should only do so carefully. Your credit score will drop, sometimes precipitously, and any delinquent accounts you do accrue remain on your credit report for up to seven years.
This strategy has its advocates and advantages but also comes with several negative side effects.įor starters, you’ll automatically become delinquent on any accounts you stop making payments for.įurthermore, you’ll begin accruing late fees and/or interest charges, meaning your total debts will rise exponentially. The strategy goes that, after several months of not being paid at all, your creditors will be willing to accept a lower lump-sum and write off the rest of your debt than continue harassing you when it’s clear you don’t have enough income to manage regular payments. With organizations like Freedom, you’ll save money in a dedicated savings account and stop making payments for all debts you enroll with them. In a nutshell, debt settlement is a service offered by companies like Freedom Debt Relief where you cease paying your creditors as part of a multistep plan to get them to write off some or most of your debts. Debt settlement will initially lower your credit score.How does Freedom Debt Relief measure up, and do they have the reputation to make their service a worthwhile? That doesn’t mean it can’t be helpful, however. But debt settlement is historically risky and is usually not seen as a preferred choice. Now that so many people are seeking help with their debt in one form or another, it’s no wonder companies like Freedom Debt Relief have become increasingly popular.
To state that debt has only gotten worse since 2018 would undoubtedly be a wise wager. That’s a number the human brain just can’t comprehend, even if it wanted to. Indeed, the International Monetary Fund shows that total global debt reached over $188 trillion by the end of 2018. Although debt can be an effective financial tool if used wisely, you’d be hard-pressed to prove that debt hasn’t, in large part, simply spiraled out of control.ĬOVID-19 and other large-scale economic factors have only exacerbated the general debt problem tons of people face every day. Somewhere down the road of industrialization and consumerism, debt became an ubiquitous part of our lives.
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