5 Best Debt Relief Companies of April 2024

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Money’s main takeaways

• We recommend debt relief only when other, more favorable options are not viable. Debt consolidation loans, balance transfer credit cards and credit counseling make better financial sense for borrowers.

• Debt relief companies require you to stop paying creditors in order to increase their negotiating power. This will almost certainly have a negative impact on your credit score. The upside is that a debt relief program can enable you to settle your accounts for less than you owe.

• Debt relief can help you avoid bankruptcy, but there is no guarantee your creditors will accept the settlement proposed by the debt relief company.

Debt relief, or debt settlement companies, are services that claim they can negotiate with creditors to reduce the amount of debt owed by their clients. Debt relief is not without controversy, and there are risks you need to be aware of.

If you owe a large sum of money at high interest and have had no luck with other debt consolidation methods, you might want to consider using a debt relief company. Read on to learn about the best debt relief companies.

Our Top Picks for Best Debt Relief Companies of April 2024

The companies listed below are organized alphabetically.

• Accredited Debt Relief - Best for Quick Results
• Community Tax - Best for Tax Debt
• Freedom Debt Relief - Best Free Consultation
• National Debt Relief - Best Reputation
• New Era Debt Solutions - Longest-Standing Debt Relief Company

Best Debt Relief Companies Reviews

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Why we chose it: Accredited Debt Relief offers some of the quickest results among all the services we evaluated. Though the timeframe to become debt free will depend on your particular debt situation, the company can get you out of debt in as little as 24 months.

Accredited also offers a free consultation where you can speak with a specialist who will help you decide if debt settlement is the right option for you. If it turns out not to be, Accredited can connect you with one of its consolidation loan affiliates. Affiliate consolidation loans range from $1,000 to $100,000 and have APRs that range from 6% to 36%.

Read our full review of Accredited Debt Relief.

Learn more on Accredited Debt Relief's Secure Website.

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Why we chose it: Community Tax is your best bet for negotiating tax debt because the company employs a team of professionals who have a long history of dealing with the IRS.

Community Tax employs a robust team of licensed tax practitioners, enrolled agents and CPAs to help you settle your debt with the IRS. The company also offers services such as tax planning, tax preparation and bookkeeping, not to mention a free tax analysis.

Read our full review of Community Tax Relief.

Learn more on Community Tax's Secure Website.

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Why we chose it: While other debt relief companies offer free consultations, Freedom Debt Relief has the most comprehensive no-risk evaluation of all the services we considered.

If you’re considering debt relief, but are still on the fence, Freedom’s certified debt consultants can help you make an educated decision. If they feel your particular situation warrants debt relief, they’ll explain the money you could expect to save, and the estimated timeframe of the debt relief process.

This is an attractive option because it allows prospective customers to get a ballpark idea of what they can expect if they decide to go with the debt relief option.

Read our full review of Freedom Debt Relief.

Learn more on Freedom Debt Relief's Secure Website.

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Why we chose it: National Debt Relief has a solid reputation and history that shows in literally tens of thousands of positive online reviews.

National Debt Relief claims to have helped over half a million people get out of debt since the company was established in 2009. This is attested to by a multitude of five-star reviews across such sites as Trustpilot and Google.

Additionally, the company is accredited by the American Association for Debt Resolution (AADR), as well as Platinum Accredited by the International Association of Professional Debt Arbitrators (IAPDA). The company is also BBB accredited and has an A+ rating.

Read our full review of National Debt Relief.

Learn more on National Debt Relief's Secure Website.

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Why we chose it: Out of all the debt settlement services we evaluated, New Era Debt Solutions has the longest service history.

New Era could be a viable option for customers who feel more comfortable with a provider that has a long track record. Since 1999, the company has been employing debt relief attorneys and negotiators to help customers pay off their unsecured debt for less than they owe.

Additionally, consultants, resources and services are all available in Spanish.

Learn more on New Era's Secure Website.

Other debt relief companies we considered

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JG Wentworth Debt Relief

JG Wentworth is best known for its structured settlement business, but the company also provides debt relief services. It has a solid 30 years of experience helping people with finances to fall back on. Additionally, the debt relief program has very positive reviews across multiple consumer websites, including accreditation and an A+ with the Better Business Bureau.

However, while the company is transparent in disclosing that creditors are under no obligation to negotiate, there is no mention on the website about the likely effects debt settlement will have on your credit and financial health. The website is short on information in general, and has very little in the way of educational materials about debt relief. What’s more, it is not clear what fees JG Wentworth will charge, or the minimum and maximum debt they can accommodate.

Learn more on JG Wentworth Debt Relief's Secure Website.

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Pacific Debt Relief

Pacific Debt Relief helps qualified applicants consolidate and reduce their debt by up to 50% and can help settle multiple types of debt, including credit card debt, medical debt, business debts, personal loans, payday loans and more. To qualify, customers must have a minimum of $10,000 in unsecured debt. However, Pacific Debt Relief is less accessible than competitors, as customers don't have an online account or portal.

Learn more on Pacific Debt Relief's Secure Website.

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CuraDebt

CuraDebt helps customers with the debt settlement of credit cards, lines of credit, personal loans, medical bills, business debts, some secured debts, back taxes and IRS debt. While CuraDebt’s tax debt relief services are available in every state except Pennsylvania, its other debt relief services are unavailable in 15 states.

CuraDebt doesn’t charge monthly or upfront fees. Its website states that its costs are 20% or less of the total amount of debt on average.

Learn more on Curadebt's Secure Website.

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DMB Financial

DMB Financial is a debt settlement company that will work with your creditors to help you restructure your debt and create a manageable time frame for debt repayment. The company offers a free consultation through one of its certified program consultants. However, DMB Financial doesn’t list prices for its services online.

The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against DMB Financial in December 2020 for charging consumers unlawful fees, which resulted in a $5.4 million penalty.

Learn more on DMB Financial's Secure Website.

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Simple Debt Solutions

Simple Debt Solutions is a marketplace that specializes in debt consolidation loans, but also offers other debt relief services. Primarily, Simple Debt Solutions connects prospective borrowers with its large network of lenders in order to find them the best deal. This is noteworthy, as a debt consolidation loan is always a better financial option to debt settlement if the customer is able to qualify.

For those who cannot qualify, Simple Debt offers debt settlement and other debt consolidation options. The company has positive customer feedback and is BBB accredited with an A+ grade.

Learn more on Simple Debt Solutions's Secure Website.

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Debt Relief Guide

Before deciding on a debt relief company, you should understand how debt relief works, the pros and cons and all the options available to you. This guide will help you make the best decision.

• What is debt relief?
• How does debt relief work?
• Alternative options to debt relief programs
• How to choose a debt relief program
• How to apply to a debt relief program

What is debt relief?

Debt relief, also called debt settlement, is the overall reorganization or restructuring of your high interest debt when you are struggling to make on-time payments.

Debt relief companies will assist you in getting out of debt by negotiating with your creditors, but you may face negative consequences depending on your financial situation.

Some signs that you may want to consider debt relief include:

• You’re late on or missing payments
• You’re having trouble budgeting for your payments
• You’re not making any progress on paying off your debts
• Your debts continue to accumulate
• You’re considering bankruptcy

What is a debt relief program?

A debt relief program is a plan, usually created by a debt relief or debt settlement company, to help you pay off your debt by negotiating with creditors to get them to accept less than the amount they are owed.

How does debt relief work?

When you start the debt relief process, the company will generally instruct you to stop paying your creditors. Instead, you will pay a monthly fee to the debt relief company directly and they will put your funds into a dedicated savings account.

As the money in the account accumulates, the debt relief company will begin negotiating with your creditors. Essentially, the debt relief company uses the fact you have stopped paying your accounts as leverage. Faced with the prospect of receiving nothing, the creditor will agree to accept a smaller amount paid from the dedicated bank account. Next, the creditor will likely close the account and it will appear on your credit report as “settled.”

Note: Debt relief companies can only charge you once the settlement terms have been established with the creditor and a clear path forward is laid out. They usually take 15-25% of your total debt. While this percentage might seem high, considering a debt relief company can reduce your debt by up to 50%, it often ends up being less than your original debt amount.

Indeed, debt relief can be an appealing option to get out of debt. However, there are important downsides to consider.

Does debt relief hurt your credit?

Debt relief will almost certainly hurt your credit. Payment history is the biggest factor the credit bureaus consider when determining your credit score. When you stop paying creditors, you will be dinged for late and missed payments.

Also, if your creditors close your accounts, it will negatively affect your credit utilization ratio, which is the second most important factor in determining your credit score. Closed accounts marked as “settled” means the creditor had to alter the conditions of the initial agreement.

Debt settlement can also take months if not years. The entire time the company negotiates with your creditors, you will still incur late fees and likely receive harassing phone calls.

Finally, there is no guarantee a given creditor will accept a debt relief company’s settlement offer, which could lead to a debt collection lawsuit.

Differences between debt settlement and debt consolidation

Debt consolidation refers to the process of applying for a personal loan or balance transfer credit card with better rates and more favorable terms than your current debt structure. Your debts are then transferred to the new account and you make one monthly payment.

Debt consolidation simplifies your personal finances and will generally improve your credit in the long run if you keep current on payments and don’t incur more debt. With debt consolidation, you still pay the entire amount you owe, ideally in a shorter time with less interest.

If you’d like to learn more about consolidation, check out Money’s debt consolidation guide.

Pros and cons of debt settlement

PROS

• Pay less: If the debt settlement company is successful, they could negotiate an amount significantly less than you owe, even with their fees.

• Pay faster: With debt settlement, you can eliminate your debt more quickly than continuing to pay monthly minimums.

• Avoid bankruptcy: Bankruptcy arguably has more far reaching effects than debt settlement.

• Avoid lawsuits: If the creditor agrees to the terms the account will be settled, and they will cease legal action.

CONS

• Credit score will drop: Late payments, missed payments and closed accounts marked “settled” can all significantly damage your credit and will last for years.

• Creditors may not negotiate: There is no guarantee your creditors will accept the debt relief company’s settlement, leaving you with more debt considering late fees and penalties, not to mention the potential of a lawsuit.

• Must keep up on payments: You must be able to make monthly payments to the debt settlement company to stay in the program. If you can’t, you will have to withdraw, leaving you in a worse place than you started.

• Scams: The debt settlement industry is rife with bad actors. Beware of guarantees of success and anyone who asks for money up front.

Is debt relief right for you?

Because of its impact on your credit score and associated risks, employing a debt relief company is not for everyone. Getting a debt consolidation loan, a balance transfer credit card or working with a credit counselor or other debt management program is preferable.

However, if you are overwhelmed by debt, can’t keep up with payments and cannot secure a loan or credit card with a more favorable rate due to an already low credit score, debt settlement may be a viable option for you.

Below, we’ll discuss some of the alternatives to debt relief programs.

Alternative options to debt relief programs

There are several other options you should consider before employing the services of a debt relief or debt settlement service. Some of these will be less risky and less likely to negatively impact your credit score. In fact, many of them can have a positive effect in the long run.

These options include credit counseling, debt management, debt consolidation loans, negotiating with lenders yourself and bankruptcy.

• Credit counseling - Credit counseling is usually provided by non-profit credit organizations that employ certified counselors in budgeting and debt management. Credit counselors can also help advise you on the best ways to improve your credit score, repair bad credit and deal with your overall debt problems. When finding a credit counseling service, a good place to start is the National Foundation for Credit Counseling.

• Debt management - A credit counseling agency may help you set up a debt management plan. This plan could involve the counselor negotiating directly with creditors on your behalf to lower interest rates, waive fees and minimize payments.

• Debt consolidation loans - A debt consolidation loan is a personal loan that combines and consolidates other high interest debts into one monthly payment. Ideally, the loan rate will be lower than your current debts allowing you to pay less in the long run.For more information, check out our top picks for the best debt consolidation loans.

• Negotiate with creditors - It is possible to negotiate with each of your individual creditors yourself. Essentially, you are doing the same thing as the debt settlement agency, only without the experience and negotiating muscle. It also requires determination, follow up and a lot of hard work on your part.

• Negotiate with debt collectors - If your debt has been sold, you may be able to negotiate with the debt collector. And since debt is usually acquired at a significantly reduced value than its original amount, you have the opportunity to engage with the collection agencies and find a middle ground between your initial debt and the price they paid for it.

• Bankruptcy - Filing for bankruptcy isn’t something to take lightly. You can use bankruptcy to help with your debt problems, but it will have a significant impact on your credit report.

How to choose a debt relief program

Selecting a debt relief company requires careful consideration. Thorough research is essential, as even legitimate companies need to be vetted.

Beware of potential scams: Be cautious if a provider guarantees debt reduction or asks for upfront feeds before providing services; these are red flags.

When choosing a debt relief company, consider these factors:

• Reputation and Accreditation. Legitimate debt relief or debt settlement companies will be recognized by the American Fair Credit Council (AFCC), so look for this accreditation on the company’s website or inquire with a representative. The AFCC is an organization that monitors and holds companies to the highest standards and also educates consumers on the subject of debt resolution.

• Customer Reviews. Review customer feedback on the BBB, Trustpilot and other trustworthy sites. Occasional bad reviews are typical, but consistent negative patterns signal concern. Assess how the company addresses complaints; active engagement and resolving issues indicate reliability.

• Fees. By law, debt relief companies cannot charge upfront fees. They can only charge you once creditors agree to the settlement. Avoid companies requesting money upfront. Verify fees and payment details before committing. Typically, debt settlement companies charge a percentage of the settled debt; confirm this with a representative in advance.

• Accessibility. How easy is the company to get a hold of? Given the impact a debt settlement program could have on your financial health, you should be able to contact the provider on the phone or through chat, email or text, and they should be responsive to your questions. It is also a bonus if they have an online dashboard where you can monitor your progress.

How to apply for a debt relief program

As debt relief comes in many different forms, applying for debt relief will depend on which option you decide to pursue. If you decide to get assistance from a debt relief company, your debt relief will depend on your eligibility for one of their programs. You can also try to get debt relief by consolidating your debts, speaking directly with your lender or declaring bankruptcy.

How We Chose the Best Debt Relief Companies

We analyzed the top debt relief companies available to support our recommendations. To decide which companies were best, we employed the following methodology:

• Costs: We chose debt relief companies that provide the best services for their given cost. Generally speaking, companies will charge 15-25% of the debt they settle for you. They cannot charge you anything up front by law, and only can begin charging once the creditor has accepted the settlement. We only considered programs that are transparent about their pricing structure and don’t trick you with hidden fees.

• Services and offerings: We favored companies that give you the most options when it comes to debt settlement. Most services will be able to work with credit card and unsecured personal loan debt, but it’s less common for them to offer help with medical bills, utility bills, rent and judgments.

• Third-party ratings: We looked at trusted third-party rating sites to determine how satisfied previous customers were with each service. We considered BBB accreditation and how likely the company was to respond to complaints in a productive way. We also considered the percentage of successfully closed complaints. Additionally, we took a look at other customer review websites specific to the debt relief industry in order to identify any pattern of similar complaints lodged against a given company.

• Customer support: We considered the accessibility and support each company extends to its customers. Debt settlement is a stressful process, and it’s made worse still if there is a lack of communication. That’s why we highlighted companies that were responsive to customers and offered multiple lines of communication including phone, email, text, and online form. Although no company offered live support 24/7, we favored those with longer hours of operation. Companies that offer the ability to track the debt settlement process via an online dashboard or mobile app fared well with us, too.

Summary of Money’s 5 Best Debt Relief Companies of April 2024

The companies listed below are organized alphabetically.

• Accredited Debt Relief - Best for Quick Results
• Community Tax - Best for Tax Debt
• Freedom Debt Relief - Best Free Consultation
• National Debt Relief - Best Reputation
• New Era Debt Solutions - Longest-Standing Debt Relief Company