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Depending on your financial situation, Freedom Debt Relief could help alleviate your debt burden while avoiding bankruptcy. Learn more about this California-based company to find how out they work and if you qualify.
Debt Relief Process
Before you enroll with Freedom Debt Relief, you’ll participate in a free debt evaluation. During this phone call, you and a Certified Debt Consultant review your debt situation and discuss potential solutions to make sure their program is the best option for you. Once you enroll with Freedom Debt Relief, you’ll jointly design a payment program.
The goal is to save you money over time compared to making minimum payments on your balances by eliminating debt in a much shorter time frame. You’ll contribute funds to a monthly deposit program, but only an amount you’re comfortable with. This replaces your monthly payments to creditors.
The account is in your control but separate from your other accounts so that the money is reserved solely for your debt relief program. It’s FDIC-insured and you can track your progress 24/7 with your online Client Dashboard.
In the meantime, Freedom Debt Relief’s team begins to craft a negotiation strategy, including how to leverage deals with multiple creditors. Once your account has reached its target amount, the negotiations team gets to work in reaching settlements. No settlement is executed without your direct approval.
Once finalized, each debt is reported to the credit bureaus as settled in full, settled, paid, paid by settlement, or settled for less than the full amount. Each of these has a different impact on your credit score so pay attention to these phrases throughout the negotiation process.
Freedom Debt Relief holds each creditor accountable to ensure that they accurately report your settlement to the credit bureaus. If you stick to the plan, you can have your unsecured debts settled in as little as two to four years.
Freedom Debt Relief doesn’t typically focus on small debts. Clients usually have debts ranging in the five or six digit range and are having difficulty meeting their minimum payments each month. Only unsecured debts are eligible for debt settlement with Freedom, such as credit cards and personal loans.
You should be willing and able to make small deposits each month and commit yourself to taking anywhere between two and four years to complete the program. You can certainly attempt debt settlement on your own, but Freedom clients prefer using a professional company with years of experience to work on their behalf.
The application process starts with the free debt consultation. To schedule one, you can visit their webite and fill out the form.
At that point, you’ll find out if Freedom Debt Relief’s services are appropriate for your financial situation. If they are, you can agree upon a monthly deposit amount and get enrolled in the program.
Once the Process Starts
When working with Freedom Debt Relief, you enroll all of your credit cards that have a balance of $500 or more. This helps in the negotiation process because creditors see that you’re trying to settle all of your accounts, not just theirs.
Freedom Debt Relief then recommends that you stop paying on the enrolled accounts and instead contribute to your settlement fund. While this is a common part of the debt settlement process, it does come with some risks. You’ll likely start to receive calls from collection agencies to try and tempt you to start making payments again.
Another consequence is that each of your late payments and delinquent accounts will be reported to the credit bureaus and listed on your credit report. Depending on your current credit history, this could substantially lower your credit score and make future access to credit more difficult. Still, you already may be having these issues because of your high burden of debt.
During the settlement process, you’ll also likely accrue interest and late fees on your unpaid accounts. However, Freedom Debt Relief works to negotiate dramatic savings so that you ideally still save money after the settlement.
Once your account has reached an appropriate amount, Freedom actively begins the negotiation process. They use your account as proof of funds for making a lump sum payment — often an attractive offer in the eyes of a creditor.
For many clients, the first settlement is achieved within two and four months of negotiations, but it’s also possible for it to take six months or more to start seeing results. When you receive a settlement, the discharged amount counts as taxable income for the year, so talk to a tax expert to fully understand the implications.
Freedom Debt Relief is a founding member of the American Fair Credit Council, working hard to promote transparency and industry regulations. Their track record speaks for itself, and creditors are familiar with this industry giant; in fact, Freedom regularly resolves about 25,000 accounts each month.
Additionally, you don’t have to pay fees until you see results. While you’re by no means required to use a consolidation loan, Freedom Debt Relief does allow for them and partners with a lender if you choose that route. Most people, however, rely on their own monthly contributions for the debt settlement fund.
Because your creditors can still try to collect on your debt while enrolled in the program, there’s a possibility they could file a lawsuit against you. In the unlikely event this happens to you, Freedom Debt Relief offers access to a third party law firm to help negotiate a settlement. You may not save as much, but it’s nice to know all of the potential solutions you have to any possible legal issue.
What to Do After Debt Settlement
When you’ve completed the Freedom Debt Relief program, you’ll ideally walk away with most, if not all, of your unsecured debt completely taken care of. Even if you have some remaining balances, you should feel a much lighter load on your shoulders.
Consider this an opportunity to approach your future finances with a clean slate. To really start fresh, you’ll have a bit of work to do, but it’s entirely achievable by following these steps.
#1: Start to Repair Your Credit
Working with a reputable debt settlement company like Freedom Debt Relief helps to take care of your debt, but they don’t claim to fix your credit. In reality, your debt and credit are related, but not interchangeable; fixing one doesn’t automatically fix the other.
Since you’ve attended to your debt problem, it’s now time to set your sights on your credit. Start off by ordering all three copies of your credit report. You may see a lot of late payments listed. Make sure each one is accurate and confirm that your settlements are listed correctly.
If not, you can file a dispute directly with the credit bureau. While still in the debt settlement process, be sure to keep accurate and detailed records so you can reference these if needed.
#2: Create a Financial Plan
You might have gotten in over your head with debt for any number of reasons. You may have suffered from an injury, faced long-term unemployment, or simply may have lived outside your means. Since debt settlement takes a couple of years to complete, use that time and beyond to think about how to fix your income and spending.
Perhaps you could apply for disability if you’re still injured, or brush up on a new skill set to make your resume stand out. If you have trouble sticking to a budget, talk to a personal finance expert to learn more effective strategies.
It’s important to think of long-term solutions beyond the debt settlement period so that you don’t get yourself back in the same situation.
#3: Make Good Habits a Routine
While you likely won’t be making payments on credit cards during your settlement program with Freedom Debt Relief, you can still keep other accounts in good standing. Help prevent more damage to your credit score by paying your other bills on time each month, like your mortgage, cell phone, and utilities.
If you kept a low balance credit card open, be sure to pay it off as soon as possible and avoid making new charges. Start these habits early so that by the time you’ve completed your debt settlement program, you can continue modeling good financial behavior.
Again, consistency is key and just a few simple changes, along with the right debt settlement program, can set you up for a much brighter financial future.