Key takeaways

  • A debt consolidation company can help negotiate down your debts so you pay less than what you owe.
  • While it can reduce your debt, it can harm your credit score and will remain on your credit report for up to seven years.
  • The best debt settlement companies include Accredited Debt Relief, National Debt Relief, New Era Debt Solutions and Pacific Debt Relief.
  • When choosing the best debt settlement company, consider factors like accreditation, time in business, fees, customer support, training and customer reviews.

If you’re overwhelmed with debt, a debt settlement company can be a solution to help you reduce your monthly bills. These third-party companies contact lenders or creditors on your behalf to settle your unsecured debts for less than what you owe. Typically, you’ll make deposits to a savings account that the debt settlement firm will use to pay off your debts. You’ll also need to stop using the credit card or line of credit that the debt-reduction program is targeting.

To come up with our list of the best debt settlement companies of 2023, Bankrate’s experts evaluated companies using a meticulous five-star scoring model, known as the Bankrate Score. This scoring model focuses on factors such as services offered by each company, affordability, overall customer experience and satisfaction, length of time in business and more.

Working with a debt settlement company comes with inherent risks. There is no guarantee that your creditors will negotiate with a debt settlement company, and debt settlement can significantly impact your credit score. While the companies listed below are reputable, you should look up customer reviews and complaints, as well as explore alternative options before working with a debt settlement company.

Best debt settlement companies of 2023

These four debt settlement companies provide a number of benefits to customers and have long-standing reputations in the industry.

Accredited Debt Relief

In business for more than a decade, Accredited Debt Relief has received top marks from various industry and consumer organizations. It has been accredited by the American Fair Credit Council. In addition, Accredited Debt Relief has earned excellent ratings on customer review sites such as Trustpilot and the Better Business Bureau.

The company handles only unsecured debts such as credit cards, department store cards and medical bills. Its programs range from 24 to 48 months.

Accredited Debt Relief offers a money-back guarantee. Customers can cancel their debt resolution program at any time without penalties or obligations and will receive a refund of any money invested toward a potential settlement, minus fees. Accredited Debt Relief customers can also approve all settlements negotiated on their behalf.

  • Bankrate score: 4.8/5

National Debt Relief

While many debt settlement companies do not reveal a great deal of information on their websites about fees or program details, National Debt Relief provides a great level of transparency.

National Debt Relief settles debts on credit cards, department store cards, business debts, collections, repossessions, certain student loans, personal loans and medical bills. On its site, it notes that consumers must have at least $7,500 in unsecured debt. The company also says the average client typically pays a fee of 15 to 25 percent of total debt enrolled once the debt is settled by National Debt Relief.

All of National Debt Relief’s debt arbitrators have been accredited through the International Association of Professional Debt Arbitrators. In addition, National Debt Relief, which has been in business since 2009, is a member of the American Fair Credit Council. That means it goes through regular audits to ensure the quality of its services.

  • Bankrate score: 4.7/5

New Era Debt Solutions

DTS Financial came to be in 1999, and in 2007 its founders created New Era Debt Solutions to better handle high debt balances. It has since settled more than $275 million in debt for clients.

The company is accredited by the International Association of Professional Debt Arbitrators and has many positive reviews on both the Better Business Bureau and Trustpilot. New Era provides customers with personal debt counselors and an in-house team that will be your contacts for the life of your service contract.

There are no upfront fees with New Era Debt Solutions, and the company has a track record of settling accounts for an average of 42.87 percent of the account balance at the time of settlement. Some initial settlements can occur within just 90 days or sooner. Cases, on average, are completed in just 27.7 months.

The company handles unsecured debts such as credit cards, department store cards, signature loans and private student loans in default.

  • Bankrate score: 4.5/5

Pacific Debt Relief

Pacific Debt has settled more than $300 million in debt during its two decades in business. The company is also an accredited member of the American Fair Credit Council.

The company prides itself on the level of service offered to clients throughout the process. This begins with enrollment, during which an adviser works with prospective clients to determine if debt settlement is a good choice.

Advisors will review your accounts and help complete a detailed budget to ensure the program will be affordable. Once debt settlement negotiations are underway, customers are assigned a personal account manager.

Pacific Debt typically resolves cases in 24 to 48 months. It will negotiate debts associated with credit cards, personal loans, payday loans, medical bills and balances on repossessed vehicles. Typically, a minimum debt balance of over $10,000 is required.

  • Bankrate score: 4.4/5

What are debt settlement companies?

The primary purpose of debt settlement companies is to negotiate on your behalf with creditors or lenders. The goal is to settle your enrolled debts for a lower amount than your enrolled account balances. Debt settlement could be an attractive option if you are facing financial hardship and struggling with payments.

Seeking the help of a debt settlement company should be considered carefully, however, and often only after exhausting other options. While there are benefits to using this approach, there are also plenty of risks and drawbacks.

Debt settlement vs. debt consolidation

Both debt settlement and debt consolidation are ways to reduce the overall cost of your debt, but the processes differ in some key ways. Debt consolidation involves reducing the number of creditors you owe by combining all debt under one loan.

This means that instead of paying several interest rates on various debts, you only have one monthly payment to worry about. You are still, however, responsible for the principal debt balances.

Debt settlement involves reducing the total debt you owe by negotiating with individual creditors. This means that you are still responsible for paying each individual lender, but you have a company negotiating on your behalf to reduce the cost of each debt.

How does the debt settlement process work?

The goal of the process is to have creditors, such as credit card companies, forgive a substantial portion of what you owe. Some debt settlement companies have successfully reduced unsecured debts by 30 to 55 percent.

While negotiations are taking place on your behalf, the consumer is typically asked to cease making any monthly payments on their unsecured debts. This means that you must default on your loan payments to work with a debt settlement company. The company you’re working with is then able to use this as leverage for negotiations. Creditors would rather be paid a portion of the debt owed than nothing.

While negotiations are taking place, you will typically be asked to begin making deposits into an account and the funds accumulated in the account will be used to pay whatever settlements are ultimately agreed upon.

Pros and cons of debt settlement companies

There are a number of advantages that may come with debt settlement, but those rely on it being a last choice. Any benefits must be weighed carefully against the drawbacks.

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  • Can reduce your total debt.
  • Provides an alternative to bankruptcy.
  • Greater convenience from a company negotiating on your behalf.
  • Can make your monthly bills more manageable.
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  • Can cause initial damage to credit score.
  • Remains on your credit report for up to seven years.
  • Risk of being sued by creditors.
  • No guarantee the debt settlement company will be able to negotiate your debt.
  • Could owe more due to accrued interest and fees.

What to look for in a debt settlement company

Selecting a reputable debt settlement company requires research and careful decision-making. You’ll want to consider several factors about each company before making any decisions.

Length of time in business

The key to debt settlement is its track record and how effective it is in its negotiations. A company that has been in business for a long time shows more of a history of working with creditors and achieving settlements.

Availability of customer service representatives

A truly reputable debt settlement company’s customer service representatives are ready, willing and able to answer questions about the debt settlement process and all fees. Steer clear of companies that only provide vague or unclear answers.

It can take between one and four years to settle debts, so finding a company that’s supportive and is easy to get in touch with will make the process much less stressful.

History of satisfied clients

Checking customer reviews can provide valuable insight into the quality of service a company has provided to others. Many complaints lodged through official channels or negative, unresolved comments on the Consumer Financial Protection Bureau (CFPB) website could spell trouble.


You’ll also want to find out exactly what fees a debt settlement company charges for services. You don’t want to be locked into a contract that you can’t afford. It’s also a good idea to stay away from companies that charge fees in advance.

According to the CFPB, charging upfront fees for any debt settlement services is illegal. The agency also recommends that consumers avoid companies that make bold claims, such as promoting a “new government program” to get you out of debt or guaranteeing that it can wipe out your existing debt.

Trained personnel

An upstanding debt settlement company should have debt consultants who are trained and certified in debt settlement. An untrained negotiator is going to be an ineffective negotiator.

Industry accreditation

The American Fair Credit Council (AFCC) is a key debt settlement industry association. Companies can only join if they are in full compliance with the Federal Trade Commission and follow a strict code of conduct. The International Association of Professional Debt Arbitrators is another professional industry association that offers accreditation to debt settlement companies.

Which debt settlement company is the best?

Although most companies work with credit card and store card debt, not all of them deal with other types of unsecured debts, such as payday loans, personal loans or medical debt. Likewise, each company has its own minimum debt balance requirements.

To find the right company for you, you’ll need to assess which types of debt you have, in addition to your total balance. Once you have that information, you’ll be able to narrow down your search to the companies that can fit your circumstances.

Make sure you also check out the company’s accreditation, customer support options and track record to ensure you’re dealing with a legitimate entity that can help you achieve your goals.

Alternatives to debt settlement

If you are struggling with overwhelming debt, debt settlement is not your only option. Alternatives to debt settlement include the following:

  • Do-it-yourself debt settlement: While working with a debt settlement company makes it much easier, it is possible to reach out to your creditors and negotiate a lower interest rate or a new payment plan on your own.
  • Debt management plan: You can work with a credit counseling agency to establish a debt management plan. This involves depositing a set amount of money into a separate bank account each month. The credit counseling agency will then distribute these funds to creditors each month while also trying to negotiate a lower interest rate for you.
  • Debt consolidation: You can consolidate your debt with the help of a debt relief company or by working directly with a lender that offers debt consolidation loans. Debt consolidation is the act of combining your previous debt into one new loan that has a lower interest rate.


To select the top debt settlement companies, Bankrate considered several factors including services offered, affordability, customer experience, customer satisfaction and the stability and reputation of each company. We sought to find the companies with the highest levels of transparency and customer satisfaction. Each company has received a Bankrate rating, based on the following factors:

  • Services offered: The minimum debt required, types of eligible debt and whether the company offers free credit counseling.
  • Affordability: Fees charged and money-back guarantee terms.
  • Customer experience: Website usability, customer support options and hours, and app availability.
  • Customer satisfaction and company reputation: Unresolved complaints with the FTC (Federal Trade Commission) or CFPB.
  • Company stability: The amount of time the company has been in business and whether it is accredited by a professional trade association.