If you're struggling to pay off debt, you can lower your payments through either debt consolidation or by enlisting the help of a debt relief or debt settlement company.
Unlike debt consolidation, which merges multiple balances into one loan (ideally with a lower interest rate), debt relief companies help clients pay off their debt by negotiating a reduced balance. During the negotiation, clients stop making payments and save for debt payoff in a savings account. When an agreement with creditors has been reached, the debt is settled with the funds from that account.
Debt settlement isn't guaranteed and comes with some risks, including a lower credit score, extra fees, additional taxes and even lawsuits.
Below, CNBC Selectpicks the top debt relief companies based on fees, customer satisfaction ratings, company history and availability. (Read more about ourmethodologybelow.)
Best debt relief companies
- Best for customer satisfaction: Americor
- Best for debt support: Accredited Debt Relief
- Best for affordability: New Era Debt Solutions
- Best for large debts: National Debt Relief
- Best for credit card debt: Freedom Debt Relief
- Best longstanding company: Pacific Debt Relief
- Best for tax debt: CuraDebt
Best for customer satisfaction
Americor Debt Relief
Cost
14% to 25% of enrolled debt
Highlights
Americor offers debt relief options for those with more than $7,500 of unsecured debt. It's been in business for over 15 years and also offers debt consolidation options. It's been accredited by the American Association for Debt Resolution and the BBB.
App available
No
Pros
- Relatively low minimum debt required to enroll in the program
Cons
- Not available in all US states.
Who's this for? Americor is a strong option for those looking for a company with a good record of customer satisfaction since the company has over 1,400 customer reviews averaging 4.66 stars on BBB's website.
Standout benefits: Americor has lower fees than some of the competition, charging between 14% and 25% of enrolled debt.
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Best for debt support
Accredited Debt Relief
Cost
25% of enrolled debt
Highlights
Accredited Debt Relief has been in the business since 2011 and offers debt relief options to those with at least $10,000 of debt, including credit card debt, personal loan debt, and medical debt.
App available
Yes
Pros
- Clients can participate in free financial therapy while enrolled in the program
- Accredited by the American Association for Debt Resolution and Better Business Bureau
Cons
- Not available in all U.S. states
Who's this for? Accredited Debt Relief is a good choice for those who need additional support with their debt — the company includes financial therapy services for those who enroll in the program.
Standout benefits: Accredited has an A+ rating from the BBB, and has worked with over 300,000 clients.
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Best for affordability
New Era Debt Solutions
Cost
14% to 23% of enrolled original debt
Highlights
New Era Debt Solutions has slightly lower fees than some of the other debt relief services we rated. It's been in business for 23 years, and is rated 4.93 out of 5 for customer satisfaction through the Better Business Bureau.
App available
No
Pros
- Accessible for Spanish speakers
Cons
- Not available in all states
Who's this for?New Era Debt Solutions has a strong track record, with high rankings for customer satisfaction, with an A+ rating from the Better Business Bureau.
Standout benefits:It offers some of the lowest fees of the companies we considered, averaging14% to 23% of your total enrolled debts.
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Best for large debts
National Debt Relief
Cost
15% to 25% of enrolled debt
Highlights
National Debt Relief has been in business since 2009, and has helped hundreds of thousands of people get out of debt. While National Debt Relief won't be a fit for people who owe less than $10,000, it can be a good option for those with large debts.
App available
No
Pros
- A+ Better Business Bureau rating
Cons
- A minimum of $10,000 of unsecured debt is required to enroll
- Not available in all states
Who's this for?National Debt Relief works with customers with $10,000 or more in unsecured debt, making it a good choice for people with large debts.
Standout benefits:This company charges a fairly typical fee for its service among the companies we compared. Clients can easily track their monitor their progress through a dashboard on the company's website.
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Best for credit card debt
Freedom Debt Relief
Cost
15% to 25% of enrolled debt
Highlights
Freedom Debt Relief has been helping people get out of debt since 2002, and has resolved $15 billion of debt. Specializing in credit card debt, Freedom Debt Relief can help clients get started without fees up front and offers free credit card debt relief consultations.
App available
No
Pros
- A+ Better Business Bureau rating
Cons
- Not available in all states
Who's this for?Freedom Debt Relief can help clients get out of credit card debt, though it also deals with other types of unsecured debt like medical bills.
Standout benefits:Freedom Debt Relief's program guarantee will refund fees if your settlement is greater than the amount originally owed when you enrolled in the program.
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Best longstanding company
Pacific Debt Relief
Cost
15% to 25% of enrolled debt
Highlights
Pacific Debt Relief is highly rated for customer service, earning a 4.93 out of 5 according to the Better Business Bureau. Since 2002, the company has settled over $300,000,000 worth of debt.
App available
No
Pros
- Highly rated for customer satisfaction
- Accessible for Spanish speakers
Cons
- Only operates in 37 states.
- High $10,000 minimum of unsecured debt for debt relief.
Who's this for?Pacific Debt Relief has one of the highest customer satisfaction ratings through the BBB among the companies we considered, scoring 4.93 out of 5. However, it generally requires $10,000 or more in unsecured debt to qualify for the program.
Standout benefits:Pacific Debt Relief is BBB accredited.
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Best for tax debt
Curadebt
Cost
Not disclosed
Highlights
While some debt relief companies won't work with tax debt, Curadebt will. Their tax debt services are available in all states except Pennsylvania, and has a 4.81 out of 5-star rating for customer satisfaction with the Better Business Bureau.
App available
No
Pros
- In business since 2000
- Works with state and federal tax professionals
Cons
- Not Better Business Bureau accredited
- Fees for tax debt relief are not disclosed online
Who's this for?CuraDebt is one of the few debt relief options that deal with IRS debt and back taxes, making it a top choice for those in this situation.
Standout benefits: It offers services for state and federal tax debts and has CPAs and tax attorneys at hand to assist customers.
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More on our best debt relief companies
Americor
With 15 years of debt relief experience, Americor has built a good track record for customer service and resolving debt.
Minimum amount of debt required to enroll
$7,500
Fees for services (percentage of enrolled, unsecured debts)
14% to 25%
BBB rating
A+
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Accredited Debt Relief
Accredited Debt Relief works with clients in 38 states, and has been in business for 13 years.
Minimum amount of debt required to enroll
$10,000
Fees for services (percentage of enrolled, unsecured debts)
25% of enrolled debt
BBB rating
A+
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New Era Debt Solutions
New Era Debt Solutions has a long history since the company has been in the debt relief space for more than 20 years. It also has strong reviews from the BBB and is accredited.
Minimum amount of debt required to enroll
Not disclosed
Fees for services (percentage of enrolled, unsecured debts)
14% to 23%
BBB rating
A+
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National Debt Relief
National Debt Relief has been working in the debt relief business since 2009 and has a large number of positive reviews with the BBB.
Minimum amount of debt required to enroll
$10,000
Fees for services (percentage of enrolled, unsecured debts)
15% to 25%
BBB rating
A+
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Freedom Debt Relief
Freedom Debt Relief has been in business for more than 20 years. The company has worked with over one million customers and resolved $18 billion in unsecured debt since 2002.
Minimum amount of debt required to enroll
Not disclosed
Fees for services (percentage of enrolled, unsecured debts)
15% to 25%
BBB rating
A+
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Pacific Debt Relief
Pacific Debt Relief has been helping people negotiate their debt since 2002 and has been accredited by the BBB.
Minimum amount of debt required to enroll
$10,000
Fees for services (percentage of enrolled, unsecured debts)
15% to 25%
BBB rating
A+
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Curadebt
CuraDebt has been serving customers who need help with tax debts for over 21 years and is available in 47 U.S. states.
Minimum amount of debt required to enroll
Not disclosed
Fees for services (percentage of enrolled, unsecured debts)
14% to 23%
BBB rating
A+
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Compare offers to find the best debt relief options
How to choose a debt relief company
Before choosing a debt relief company, you'll want to make sure that you've tried all other options. You might want to consider a non-profit credit counseling service as an alternative, which can help you make a plan to get out of debt.
The Consumer Financial Protection Bureau (CFPB) also recommends contacting your state Attorney General or any local consumer protection agencies to make sure there aren't any consumer complaints on file about the company. The office can also tell you whether the company you're considering is licensed in your state if it's required.
You'll want to beware of companies that:
- Charge fees before settling debt
- Makes guarantees on debt settlement
- Tells you to stop communicating with creditors
To find a good debt relief company, you'll want to consider the fees involved and make sure that they cover the type of debt you're working with. Then, consider reviews and current customer satisfaction.
Debt relief vs. debt consolidation
Debt relief relies on negotiating down the amount of debt you owe and is generally done by companies that charge a fee for their services. Debt relief companies generally encourage clients to stop paying bills on their debts that are enrolled in the program and instead save for settlements in a savings account.
Debt consolidation, however, is generally done on your own. This process relies on a personal loan to pay off debt, then leaves the personal loan as your main debt to pay down. It can help you keep track of your debts better by rolling them into one debt, and in some cases, it can lower the interest rate you'll pay for some high-interest debts.
Here are CNBC Select's best debt consolidation loans to consider:
- Best for student loan consolidation: SoFi
- Best for fair/average credit: Upstart
- Best for consolidating debt while improving financial literacy: Upgrade
- Best for staying motivated: Happy Money
- Best for good to excellent credit: LightStream
- Best for joint applicants: Prosper
FAQs
What is debt relief?
Debt relief, also called debt settlement, refers to a variety of programs and services that can help people reduce their debt. Debt relief companies negotiate with creditors to lower the amount you owe on your unsecured debts, which includes things like personal loans, credit cards and medical debt. They generally don't work with secured loans, or loans backed with collateral, like mortgages and auto loans.
What does a debt relief company do?
After negotiating, the debt relief company pays for an agreed amount that will settle your debt with money put aside in a savings account. Generally, these programs encourage people who have enrolled to stop paying on credit cards and other bills.
By negotiating how much debt is owed, these debt settlement companies claim that clients could pay less overall and get out of debt faster.
However, the Consumer Financial Protection Bureau, a government agency for consumer protection, states that debt settlement could leave people deeper in debt than they were when they started. Since clients are encouraged to stop paying their debts and instead fund a savings account, potential risks include creditors filing lawsuits for nonpayment, and a buildup of late fees and interest that could be greater than the original debt enrolled.
How long does debt relief take?
The entire debt relief process can takearound three to four years.
How much does debt relief cost?
Debt relief generally costs between 15% and 25% of the total amount of unsecured debt (or debt that's not backed by an asset) that you enroll in the program.
Does debt relief destroy credit?
Debt relief or settlement causes an estimated 100-point credit score decrease, according to the National Foundation for Credit Counselling.
What are the cons of using debt relief programs?
There are several cons you should be aware of when using a debt relief program.
- Your credit score could decrease. The estimated decrease is around 100 points, according to the National Foundation for Credit Counselling.
- It can be expensive. Many of the companies we considered charge fees between 15% and 25% of the unsecured debt enrolled in the program.
- It could raise your tax bill. Debt relief works by getting creditors to take less than what you owe on your debts. The amount that's forgiven generally becomes taxable income that you're responsible for paying taxes on.
Can I do debt relief myself?
Debt relief relies on settling debts with creditors for less than the original amount. You could do this yourself and save on the fees. With some time, persistence, and savings to pay for the debt once you've reached a settlement, it's possible to do this yourself.
There are also other options for your debts available. Things like debt consolidation are also an option, which can help you to roll all your debts into one debt, and potentially decrease the interest rate owed. With this option, you won't see the same fees charged by debt relief companies. Rather, you'll pay interest and any applicable fees on a personal loan or a debt consolidation loan.
Bottom line
Debt settlement is one option to help pay off your debt, but it could mean sacrificing your credit score, paying additional fees and owing more in taxes. If you've exhausted all other options and are still struggling, a debt relief company could reduce the amount you owe and help you pay off your debt.
Read more
The best personal loans to help you consolidate debt, for anyone with fair to excellent credit
This loan calculator shows how quickly you can get out of debt
This is the most efficient and cost-effective way to pay off credit card debt
Here's how much of your monthly income should go toward debt repayment
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every debt relief review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of debt relief products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best debt relief companies.
Our methodology
To find the best debt relief companies, CNBC Select analyzed more than a dozen U.S. debt relief companies.
When narrowing down and ranking the best debt relief companies, we focused on the following features:
- Fees. Most debt relief companies charge fees for their services. We focused on those with the lowest fees. Additionally, we focused on those who are transparent about those costs and display them on their websites.
- Better Business Bureau accreditation. To be BBB accredited, companies must meet standards for transparency, honest advertising, trustworthiness, responsiveness and privacy, among other things.
- Customer satisfaction ratings. The BBB measures customer satisfaction through ratings left on its website. We considered both the rating and the number of reviews received.
- History. We considered the number of years a debt relief company has been operating.
- States where service is available. We considered the number of states where the service is available, prioritizing those that were more widely available.
All of the companies on this list are accredited by the American Fair Credit Council (AFCC).
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
