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Fee for Settlement
18% to 25%
Founded
2009
BBB Rating
A+
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Debt settlement companies generally negotiate with your creditors to pay off your debt for less than what you owe. This service may sound attractive, but it comes with significant risks—it can damage your credit, be very costly and isn’t guaranteed to work. Because of the risks, debt settlement is typically considered an option of last resort. Yet, if it’s your only option, it’s crucial that you work with a reputable company.
The best debt settlement companies are transparent about fees, have a long history of excellent customer service and are accredited by an industry watchdog, like the American Fair Credit Council (AFCC).
18% to 25%
2009
A+
We’ve compared 25 companies that offer debt settlement services to find some of the best debt settlement companies available. To appear on this list, the debt settlement services must be widely available in the U.S.
Details are accurate as of August 30, 2021.
18% to 25%
2012
A+
18% to 25%
2012
A+
Century Support Services generally gets positive customer reviews, receiving an A+ from the Better Business Bureau and 4.6 out of 5 stars on Trustpilot. It’s been in business for nearly a decade, served more than 250,000 customers and settled more than $1.3 billion in debt. It typically takes around 24 to 48 months to complete debt settlement with this company.
Clients have access to an online dashboard, where they can manage their account and progress 24/7. Century also offers valuable resources and tools on its website. Plus, there’s a live chat feature, and current customers have the option to email the company.
The AFCC accredits Century Support Services. It serves customers in 31 states and the District of Columbia, and there are no upfront fees, as required by law.
What to Watch Out For
Century Support Services isn’t completely transparent about its fees. However, the information it discloses on its website makes it possible to estimate that fees are between 18% and 25% of the total enrolled debt. You must have unsecured credit card debt of $10,000 or more to qualify.
Details
Those interested in Century Support Services can take a free assessment online or call to get a free debt analysis. The company doesn’t operate in Connecticut, Georgia, Hawaii, Illinois, Kansas, Maine, Massachusetts, Nevada, New Hampshire, New Jersey, North Dakota, Ohio, Oregon, Rhode Island, South Carolina, Vermont, Washington, West Virginia or Wyoming.
23%
1999
A+
23%
1999
A+
New Era Debt Solutions has been in business for 22 years and settled more than $250 million in debt for its clients. With an A+ rating from the Better Business Bureau and a 4.9 out of 5 star rating on Trustpilot, it ranks high for customer satisfaction and tends to be well regarded by clients.
Its website doesn’t offer a client dashboard, but clients can get in touch by emailing the company, using the online chat feature or calling.
New Era’s debt settlement service is available to a wide swath of the nation—there are only seven states where it doesn’t operate. Like other reputable debt settlement companies, it’s accredited by the AFCC, and consultations are free.
The average time to complete a program with New Era is 28 months. It doesn’t disclose if there’s a minimum amount of qualifying debt to enroll in its program. New Era states on its website that it generally doesn’t start negotiations with creditors until after funds accumulate in a savings account for six to 12 months.
What to Watch Out For
New Era isn’t transparent about its fee structure—its fees aren’t posted on its website. However, the company disclosed to us over online chat that it charges 23% of the total enrolled debt, fairly in line with what other companies in this industry charge.
Details
You can get started with New Era’s debt settlement services online or call to get a free debt analysis. The company doesn’t operate in seven states: Delaware, Illinois, Iowa, Maine, North Carolina, Oregon and South Dakota.
18% to 25%
2009
A+
Customers of National Debt Relief seem to be very satisfied with its services. It gets an A+ from the Better Business Bureau and 4.7 out of 5 stars on Trustpilot. Doing business for more than a decade, the company has settled more than $1 billion in unsecured debt.
National Debt Relief, unlike some of its competitors, is relatively transparent about its fees. The fee ranges from 18% to 25% of the total enrolled debt, but National Debt Relief states the approximate fee for their users is 20%. It takes an average of 24 to 48 months to settle the debt.
This company’s website offers a client dashboard, allowing you to monitor your progress 24/7. The site also provides free calculators and resources about debt settlement, although there’s no live chat.
National Debt Relief’s debt settlement service is available to a large majority of the nation. It doesn’t operate in eight states. As with all of the other debt settlement companies on our list, National Debt Relief is accredited by the AFCC.
What to Watch Out For
To get help through National Debt Relief, you have to be in a financial crisis. You must owe at least $7,500 in unsecured debt and be behind on your payments by several months to enroll in the program. While the company states that the average fee for its users is 20%, fees can be as high as 25% of the settled debt amount.
Details
Anyone interested in services from National Debt Relief can get a free quote online or call to get a free debt analysis. National Debt Relief doesn’t operate in eight states: Connecticut, Kansas, Maine, New Hampshire, South Carolina, Oregon, Vermont and West Virginia.
15% to 35%
2002
A+
15% to 35%
2002
A+
Pacific Debt Inc has been in business since 2002 and has settled more than $300 million in debt. It does well in the customer experience category, getting an A+ from the Better Business Bureau and a 4.7 out of 5 stars from Trustpilot.
Pacific Debt says the total time to settle your debt may take anywhere from 24 to 48 months, although some programs take longer. It offers a free consultation and quote. Educational resources are available on the company’s website, but it doesn’t have features like live chat or a client dashboard.
Like other companies on our list, Pacific Debt is accredited by the AFCC. It operates in 29 states and the District of Columbia.
What to Watch Out For
According to disclosures on its site, the average customer can expect to pay a fee of 15% to 35% of the total debt enrolled, a wider range than other companies on our list. At the high end (35%), you’d pay significantly more for this debt settlement service. It generally requires $10,000 in unsecured debt to qualify for Pacific Debt’s program. Also, this company doesn’t operate in 21 states.
Details
You can sign up for Pacific Debt Inc’s services online or call to get a free debt analysis. The company doesn’t operate in Connecticut, Delaware, Georgia, Hawaii, Illinois, Iowa, Kansas, Maine, Nevada, New Hampshire, New Jersey, North Dakota, Ohio, Oregon, Rhode Island, South Carolina, Tennessee, Vermont, Washington, West Virginia or Wyoming.
15% to 25%
2002
Not BBB accredited
15% to 25%
2002
Not BBB accredited
Freedom Debt Relief, the largest debt settlement service provider in the nation, has resolved more than $10 billion in debt for more than 650,000 clients since 2002. Those clients seem to be mostly satisfied with their experience, giving it 4.6 stars out of 5 on Trustpilot. However, it’s the only company on our list that isn’t accredited by the Better Business Bureau.
The average customer of Freedom Debt Relief settles their debt in 24 to 48 months. There’s a client portal on its website to monitor your progress. The company also provides educational resources and the ability to email customer service directly. While it doesn’t offer online chat, customer support is available seven days a week.
Freedom Debt Relief states on its website that its program is available to more than 75% of the U.S., with the disclaimer that services are “not available in all states, including New Jersey” and that fees may vary from state to state. As with the rest of the companies on our list, it’s accredited by the AFCC.
What to Watch Out For
Freedom Debt Relief has been hit with a few lawsuits in recent years. In 2019, the Consumer Financial Protection Bureau settled a lawsuit against the company concerning transparency about its fees and unlawful charges. This makes it even more important to understand the fee structure and get it in writing before signing up for this service.
According to Freedom Debt Relief, it charges the average customer approximately 15% to 25% of the total debt enrolled. You must have unsecured debt of $7,500 or more to qualify for Freedom Debt Relief’s debt settlement program.
Details
You can see if you qualify for Freedom Debt Relief’s program on its website or call to get a free debt analysis.
Before you decide on a debt settlement service as the answer to your need for debt relief, review your options. There may be several less costly and less risky alternatives that better fit your situation.
Debt settlement is a different beast than debt management or debt consolidation, all three of which fall under the larger umbrella of debt relief. With both debt consolidation and debt management, you repay the full principal owed. Only in debt settlement, which may also be referred to as debt forgiveness, are you paying back less than the principal amount owed—which is where several major differences arise, as discussed here.
If you choose to go the debt settlement route, it’s essential to vet any company you’re considering for legitimacy. Check that the company has the necessary licenses to operate and make sure watchdog institutions like the AFCC accredit it.
Here’s what to look for when choosing a debt settlement company:
Debt settlement comes with significant risks that you should be aware of before entering into an agreement. These risks include:
Company | Company - Logo | Forbes Advisor Rating | Forbes Advisor Rating - Image | Fee for Settlement | Founded | BBB Rating |
---|---|---|---|---|---|---|
Century Support Services | 4.5 | 18% to 25% | 2012 | A+ | ||
New Era Debt Solutions | 4.5 | 23% | 1999 | A+ | ||
National Debt Relief | 4.0 | 18% to 25% | 2009 | A+ | ||
Pacific Debt Inc | 3.9 | 15% to 35% | 2002 | A+ | ||
Freedom Debt Relief | 3.7 | 15% to 25% | 2002 | Not BBB accredited |
We reviewed 25 debt companies that offer debt settlement services to develop our list of the best debt settlement companies. We analyzed each company on 18 data points in the categories of fees, customer satisfaction and experience, digital experience, history and the number of services provided. We chose the five best debt settlement companies based on the weighting assigned to each category:
We considered several characteristics within each category, including fee for settlement, Better Business Bureau score, Trustpilot score, time in business and accreditation with the AFCC. We also considered whether the company offers services like free consultations and credit counseling. Finally, we evaluated each company’s digital experience based on their mobile app and website. To appear on this list, the debt settlement services must be widely available in the U.S.
Debt settlement programs generally negotiate with your creditors on your behalf to pay off your debt at a lower amount than the original principal owed. The goal here is usually to convince creditors to forgive a significant amount of your total debt. As part of the process, the debt settlement company generally asks that you stop paying your creditors so that they can more easily negotiate.
The debt settlement company usually requires you to put aside a specific amount of money each month for a particular amount of time—often 24 months or more—into a specific savings account. This money is used to pay the settled amounts.
By law, debt settlement companies are required to disclose certain information before you sign up for services. This includes: fees and terms for any services offered, an estimate of how long it may take for the company to settle with creditors, how much money you must save before the company makes an offer to creditors and information about the negative consequences of halting payments to creditors.
Debt settlement is generally considered a last resort. Several other potentially less costly and less risky alternatives fall under the broader umbrella of debt relief, including debt consolidation, credit counseling, debt management plans or bankruptcy.
Debt consolidation. Generally, debt consolidation means combining multiple debts into one payment each month. For example, you might use a balance transfer credit card or a personal loan to consolidate the debt from multiple credit cards.
Credit counseling. Credit counselors meet with you to discuss your budget, debt and finances. After reviewing your spending and debts, these professionals can help you create a personalized plan for managing both.
Debt management plans. Your credit counselor or debt relief program may suggest a debt management plan, or DMP. With these programs, you enroll debts in the program and make a single payment to the debt management plan each month. The payment is distributed among your creditors.
Bankruptcy. Bankruptcy also can be considered a form of debt relief. And, like debt settlement, bankruptcy can have significant credit score impacts.
Mitch Strohm is the Assistant Assigning Editor for Banking and Personal Finance. He has more than a decade of experience as personal finance editor, writer and content strategist. Before joining Forbes Advisor, Mitch worked for several sites, including Bankrate, Investopedia, Interest, PrimeRates and FlexJobs.