Since it’s the nation’s largest negotiator of debt, there’s a good chance you’ve heard of Freedom Debt Relief – even if you aren’t in overwhelming debt. If you are, you likely can do a lot worse than FDR. Here is why.
Just what is Freedom Debt Relief? Well, the company was started by Andrew Housser and Brad Stroh, who were recent Stanford business school grads in 2002 when they noticed a lack of consumer-friendly options for people having problems with debt.
The duo then founded the company with the aim of providing financial solutions, services, and education that help individuals lower debt loads, build wealth, and gain financial freedom.
From those humble beginnings, the FDR now has more than 2,000 trained professionals and resolves debt issues for more than 600,000 clients. It has settled more than $10 billion in debt – an average of 50,000 accounts monthly. FDR uses its experience and influence to lean on creditors for bigger savings for you.
The FDR Program
It works by negotiating with your creditors to significantly reduce your debt. This is called debt relief or debt settlement – a common business practice for resolving unsecured debts, which are those that don’t require collateral.
The financial strategy basically allows you to pay a one-time sum that’s less than the amount you owe to resolve, or “settle,” your debt.
Some of the benefits of debt relief are that good credit is not required, there’s only one monthly payment, there are no upfront settlement fees, savings can exceed what minimum payments can accomplish, and you can pay off debts faster than you could by making minimum payments.
There are disadvantages to any debt relief program, which is not for everyone. Those include debt collection calls, possible lawsuits, and a hefty hit to your credit score. But then, your credit probably isn’t in great shape, to begin with. Is Freedom Debt Relief a good company?
How Does the FDR Program Work?
How it works is, you meet with an FDR consultant to discuss your debt goals. He or she will review your debts, explain various debt options available to you, and help you determine whether the program is right for you. If it is, the consultant will work with you to put together a program. Eligible unsecured debts include credit cards, personal loans, medical, private student loans, and some types of business debt.
After you enroll, you take the cash you would have paid to creditors and instead save it in an FDIC-insured account that you control. This money will be used later to pay your creditors and program fees, which usually range from 15% to 25%. There is no charge to enroll in the FDR program.
When all enrolled debts go through this process, you finish the program, and … are debt-free. Typically, you can complete a debt relief program in 24 to 48 months. While Freedom Debt Relief can customize your relief program length based on your goals and budget, some companies only offer set program lengths from which to choose.
So, what is Freedom Debt Relief? Now you know. The company was involved, by the way, in establishing 2010 Federal Trade Commission rules that ban abusive debt settlement practices. It is also a founding member of the American Fair Credit Council, which works to promote best practices in the credit advocacy industry.
If you go the debt relief route and choose FDR, you can rest assured you are in good hands.