Are There Legit Debt Relief Programs?

If you’ve just heard about debt relief programs, you may wonder if they really work. Settling your debt for less than you owe might sound too good to be true.

Just like with many types of businesses, there are legit debt relief programs—and there are those who take advantage of people. A good debt relief company could be a huge help in getting rid of debt. 

Here are the red flags to look out for, plus how to find a legit company with the expertise you need.

Debt Relief Red Flags

Here are the biggest warning signs of debt relief scams.

Upfront debt settlement fees

Upfront debt settlement fees are illegal. The Federal Trade Commission (FTC) banned collecting advance settlement fees for debt relief services in 2010. 

Legit debt relief programs charge debt settlement fees only after:

1. They've negotiated a settlement with your creditor.

2. Youv'e approved the settlement offer.

3. At least one payment has been made to your creditor.

A debt relief company might suggest or require that you set aside money in a dedicated debt settlement account that you own and control. This is legal—the money is used to fund debt settlements with your creditors. 

Guaranteed results

Avoid debt relief companies that guarantee they’ll resolve your debt. A debt relief company can negotiate with creditors and debt collectors, but it can’t guarantee your creditors will accept a settlement agreement.

Creditors and debt collectors are often willing to work out a deal because they get back at least some of the money this way. They can avoid a costly legal battle or the risk that the debtor will file bankruptcy. But every situation is different, and debt relief programs that claim they can guarantee results are lying.

No testimonials

A legit debt relief program will have positive stories from people it has helped. Look for a testimonials page on the company’s website to see what past clients say about it. For example,  Freedom Debt Relief’s testimonials have stories from real clients. You can also look for reviews on sites like Trustpilot and the Better Business Bureau.

If a debt relief company doesn’t have any testimonials, you can’t be sure it has any satisfied clients. And if most comments online say a company is a scam, it could be a case of where there’s smoke, there’s fire.

Claims to have access to government debt relief programs

Government debt relief programs do exist, but only for federal student loan debt and tax debt. The government doesn’t help with non-government debt such as credit cards and personal loans.

Watch out for shady debt relief companies that talk about supposed government programs to resolve debt. This is a common scam used to convince people to pay expensive upfront fees.

Tells you to stop talking to debt collectors

Some debt relief companies tell you to cut contact with debt collectors, or even offer to stop the collection calls for you. Although this may seem great if you’re tired of dealing with debt collection calls, it could make the situation worse.

If you keep the lines of communication open, debt collectors might be willing to work with you on a debt settlement. But if you cut contact, they may be more likely to sue you over the debt.

How to Find a Legit Debt Relief Program

To find a legit debt relief program, look for one that checks all the following boxes:

• No upfront debt settlement fees: This is a fast way to weed out debt relief scams. Upfront debt settlement fees are illegal. If a company charges them, immediately rule it out.

• In business for a long time: Look for a company that has been around at least five to 10 years, and ideally, for decades. A long track record of success shows that a debt relief company is legitimate. It also shows that the company’s team has the expertise and experience to negotiate with creditors.

• Excellent reputation: Check the company’s testimonials and opinions on third-party review sites. You can also review lists of the best debt relief companies to see which are the most highly rated.

• Member of debt relief organizations: Organizations for debt relief companies and debt consultants include the Association for Consumer Debt Relief (ACDR) and the International Association of Professional Debt Arbitrators (IAPDA). Membership in one or more of these organizations is another sign of a professional debt relief company.

Legitimate debt relief companies make you feel comfortable every step of the way. They have Certified Debt Consultants who can talk to you about your debt, goals, and income. Based on that information, they can come up with a debt relief plan that fits your situation. There shouldn’t be high-pressure sales tactics at any point.

If you need debt assistance, Freedom Debt Relief has helped over a million clients settle over $20 billion in debt. Learn how Freedom Debt Relief works to get more info on the process, and call us at 800-910-0065 to talk to a Certified Debt Consultant today.