Debt relief companies help consumers avoid bankruptcy and get their credit back on track. Most debt relief companies are debt settlement companies whose ultimate goal is to help you settle your debt for less than what you owe. Their services are never free, and some companies charge significant fees for their help.

When your debts are overwhelming, reaching out to a third-party company might be your only option. We compared all the top debt relief companies to help in your search, focusing our efforts on finding firms that are honest, ethical and transparent, with a proven history of helping people get out of debt.

What are debt relief companies?

Debt relief companies offer debt settlement plans to help you find relief from your overwhelming debt faster. Some also offer options such as debt management plans and debt consolidation, which are less harmful to your long-term credit and financial health.

How debt relief companies work

Generally, a debt settlement company will set up a savings account that you’ll deposit money into for a set amount of time. You’ll also be encouraged to stop paying debts during the negotiation process to expedite the settlement process. The company will then use this account to prompt a negotiation or settlement with your creditors.

The idea is to convince your lenders that you cannot repay the borrowed amount. Therefore, receiving funds from the savings account is better than getting no money at all should you declare bankruptcy.

Debt settlement companies often charge 15 percent to 25 percent of your debt for their services and expensive fees for maintaining the savings account.

Bankrate’s top debt relief companies for 2022

  • Best for debt settlement: National Debt Relief
  • Best for Spanish speakers: New Era Debt Solutions
  • Best for small debt: CuraDebt
  • Best for quick results: Accredited Debt Relief
  • Best for those with high debt and low credit scores: Freedom Debt Relief

How we chose the best debt relief programs

Because many debt relief companies suggest debt settlement plans that can cause your credit score to plummet, these firms have gotten a bad reputation. However, there are plenty of reputable companies offering needed assistance.

To come up with our ranking of the best debt settlement companies of 2022, we considered several factors, including third-party reviews, overall transparency and overall services offered. As you look over our list of the top debt settlement companies, keep in mind that not all of these companies offer their services in every state

Best for debt settlement: National Debt Relief

National Debt Relief is one of the top companies offering debt relief nationwide, and that shows in its overall rankings and reviews.

National Debt Relief lets consumers call and speak with debt counselors for free, and you can use the company for debt settlement. National Debt Relief’s stated goal is to offer common-sense alternatives to bankruptcy that help consumers get back on track and on with their lives.

Read Bankrate’s National Debt Relief review.

Best for Spanish speakers: New Era Debt Solutions

New Era Debt Solutions is another top debt relief company with excellent reviews. It claims to have helped consumers settle over $250 million in debt since 1999. New Era Debt Solutions offers a speedy debt solution that helps you settle for less than what you owe.

New Era Debt Solutions is a particularly good option for those whose primary or preferred language is Spanish. All of the information on its website can be viewed in Spanish. In addition, you can request to work specifically with a Spanish-speaking debt specialist.

Read Bankrate’s New Era Debt Solutions review.

Best full-service debt relief: CuraDebt

CuraDebt is another debt relief company with plenty of five-star reviews. This company helps consumers settle debt for less than what they owe. It can also help initiate debt consolidation and tax debt relief with states and the federal government.

CuraDebt only requires you to have $5,000 of debt to qualify for their services, whereas many companies require at least $10,000 or more. Debt can be overwhelming no matter how small, so CuraDebt is a great option if you have a smaller debt amount to settle.

Read Bankrate’s CuraDebt review.

Best for quick results: Accredited Debt Relief

Accredited Debt Relief also receives great reviews from third-party ranking sites such as Trustpilot. This company claims it can settle your debt in as little as 12 months, faster than other lenders profiled on this page. The process could take up to 48 months.

Accredited Debt Relief offers standard debt settlement plans, but it can also assist with debt consolidation, debt management and bankruptcy. A qualified expert will review your situation and walk you through your options and anticipated costs before you commit.

Read Bankrate’s Accredited Debt Relief review.

Best for those with high debt and low credit scores: Freedom Debt Relief

If you have poor credit and high debt in unsecured loans, Freedom Debt Relief may be a good option. To qualify, you must have at least $7,500 in unsecured debt, but many clients have much higher debt amounts.

Freedom Debt Relief It offers debt relief services for some private student loans and business loans, as well as other categories of unsecured debt like medical debt or credit card debt. With this company, you can set up a debt relief payment option to be out of debt in a year or two, or even less time in some situations.

Read Bankrate’s Freedom Debt Relief review.

4 debt relief options to consider

Here’s a basic overview of four debt relief strategies consumers could consider.

1. Do-it-yourself debt relief

For the most part, debt relief companies can’t do anything for you that you can’t do yourself. You can call your creditors and try to negotiate a lower interest rate on your own.

2. Debt settlement

Debt settlement companies ask you to stop paying on your credit cards and other debts and start saving those payments in a separate savings account instead. The company will then work on your behalf, negotiating to let you settle your debts for less than what you owe.

Debt settlement has risks, including the fact that halting payments on your debts can hurt your credit score. Also, note that your creditors have no obligation to work with your debt settlement company, meaning you may not get the help you need.

3. Debt management plans

Debt management plans ask you to deposit a set amount of money into a separate bank account each month. The credit counseling agency will distribute funds to your creditors from this account each month, and they’ll also negotiate on your behalf for lower interest rates and better terms.

These programs can work well for consumers. They do require you to pay all of your debts in full, plus any fees charged by the company that facilitates the program.

4. Debt consolidation

You can consolidate debt with the help of a third-party debt relief company or even on your own. Debt consolidation works best when your credit is good enough to qualify for a debt consolidation loan with a lower interest rate than you’re paying now.

As with all debt-relief options, check for fees when comparing debt consolidation loans and products.

How to verify a debt relief company is legitimate

Be sure to learn about debt relief programs before you select one. As you choose debt relief options, consider these steps:

  • Reach out to a credit counseling agency: Credit counseling agencies are typically nonprofit firms that can offer a professional overview of your credit and potential options. While credit counseling agencies may not offer debt settlement plans, many offer free consultations where they can spell out all your options for you.
  • Ask about fees upfront: According to the Federal Trade Commission (FTC), some debt relief organizations charge high fees that they try to hide. Make sure you fully understand any fees you’ll be charged for debt relief now and later on.
  • Do some research: The FTC also notes that you should dig into the backgrounds of companies you’re considering before you move forward. For example, you should contact your state attorney general and a local consumer protection agency before selecting a company to work with.

Risks of working with a debt relief company

Although you could get out of debt faster working with a debt relief company, this approach is not without risks. Here are some drawbacks to consider:

  • It may not work. Creditors and lenders aren’t obligated to work with debt settlement companies and could deny the proposed settlement offers.
  • Your credit score will likely drop. When you stop making payments on your accounts, the late payments will pile up, resulting in a significant drop in your credit score.
  • You could owe taxes. Any amount over $600 that is forgiven is subject to taxation.
  • It is costly. You’ll pay a fee each time the debt is settled, along with any additional fees and penalties that accrued when you stop making payments on your debt.

How to determine if a debt relief company is a good idea for you

Debt relief should only be used as a last resort as it poses several significant risks to consumers. But if you’ve exhausted all other options and all that’s left is debt settlement and bankruptcy, it’s best to avoid the latter. While both are detrimental to your credit score, bankruptcy typically has harsher consequences and longer-lasting effects on your credit and overall financial health.

If you decide to move forward with a debt relief company, inquire about fee schedules before enrolling. It’s equally important to research to determine if they’re reputable. Read reviews from past and current customers, and reach out to the state attorney general’s office to confirm they’re licensed to operate where you live. You can also ask about any recent complaints filed against the debt relief company you’re considering.

The bottom line

Reaching out for help to settle your debts isn’t always easy, but it’s often the only option for consumers who can’t seem to change their circumstances otherwise. If you find yourself in this position, the best thing you can do is spend some time carefully comparing your options.

The best debt relief companies can take on most of the grunt work for you, but remember that your credit and money are at stake.

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