Debt relief companies help consumers avoid bankruptcy and get their credit back on track. They negotiate with creditors on your behalf, although their services are never free and some companies charge significant fees for their help.
Most debt relief companies are actually debt settlement companies whose ultimate goal is helping you settle your debt for less than what you owe. Debt settlement plans require consumers to stop paying their debts during the negotiation process, which can cause further damage to their credit score. However, they justify this by informing consumers that the hit to their credit is temporary, and that settling their debts will help them boost their score later on.
Also be aware that, in addition to debt settlement, some debt relief companies offer additional options like debt management plans and debt consolidation.
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.
Bankrate’s top debt relief companies for 2020
- Best for debt settlement: National Debt Relief
- Best for no upfront fees: New Era Debt Solutions
- Best full-service debt relief: CuraDebt
- Best for free consultations: Accredited Debt Relief
How we chose the best debt relief programs for our ranking
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 2020, we considered several different factors including accreditation with the Better Business Bureau (BBB), 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 it shows in their overall rankings and reviews. This company has an A+ rating with the BBB, and it has also received numerous accolades for its debt settlement and debt consolidation offerings.
National Debt Relief lets consumers call and speak with a debt counselor for free, and you can use them for debt settlement, debt consolidation and even credit counseling. The stated goal of National Debt Relief is offering common sense alternatives to bankruptcy that help consumers get back on track and on with their lives.
Best for no upfront fees: New Era Debt Solutions
New Era Debt Solutions is another top debt relief company with excellent reviews and an A+ rating from the BBB. Since 1999, it claims to have helped consumers settle over $250 million in debt. New Era Debt Solutions offers a speedy, common-sense debt solution that helps you settle for less than what you owe.
New Era Debt Solutions also charges no upfront fees. Like all debt settlement companies, however, it claims its total fees are “performance-based,” meaning you’ll typically pay fees as a percentage of debt that is ultimately settled.
New Era Debt Solutions offers a free debt analysis over the phone or online.
Best full-service debt relief: CuraDebt
CuraDebt is another debt relief company you should consider since this firm has an A+ rating with the BBB as well as plenty of five-star reviews. This company helps consumers settle debt for less than what they owe, but it can also help initiate debt consolidation and tax debt relief with states and the federal government.
CuraDebt makes it possible to speak with a debt counselor and get a free quote for services over the phone. You can also fill out some basic information about your debts and quickly see if you qualify. If you do meet the criteria for their debt relief programs, CuraDebt experts can walk you through the process.
Best for free consultations: Accredited Debt Relief
Accredited Debt Relief also has an A+ rating with the BBB and receives great reviews from third-party ranking sites like Trustpilot. This company stands out for its free consultation, which includes a debt analysis and an overview of its programs and how they might work for you.
Accredited Debt Relief offers standard debt settlement plans, but it can also assist with debt consolidation, debt management and bankruptcy. A qualified expert will look over your situation and walk you through your options and anticipated costs before you decide to commit.
Debt relief options to consider
Here’s a basic overview of the various debt relief strategies consumers should consider.
- Do-it-yourself debt relief: For the most part, debt relief companies can’t do anything for you that you can’t do yourself. It’s possible for you to call your creditors and try to negotiate a lower interest rate on your own.
- 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. Keep in mind that 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 in the end.
- 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, but they do require you to pay all of your debts in full, plus any fees charged by the company that facilitates the program.
- Debt consolidation: Also note that 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. Like all debt relief options, make sure to check for fees as you compare debt consolidation loans and products.
How to verify a debt relief company is legitimate
Take additional steps to look at the backgrounds of debt relief programs before you move forward. As you choose among debt relief options, consider these steps:
- Reach out to a credit counseling agency: Credit counseling agencies are typically nonprofit firms who 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 FTC, some debt relief organizations charge high fees that they try to hide. Make sure you have a full understanding of 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.
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 it’s your credit and your money that’s at stake.