How Does Freedom Debt Relief's Fee Structure Work?

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Freedom Debt Relief charges you three distinct fees: a settlement fee, a program fee, and a monthly fee. The settlement fee is a percentage of the total debt that actually settles (the 'settled debt'). The program fee is a flat amount charged once you enroll and sign the agreement. The monthly fee is a recurring charge that starts after enrollment and continues until the program ends or the debt is settled.

Example (illustrative only): Suppose you owe $10,000 and the company negotiates a settlement for $6,000. If the settlement fee is 15 % of the settled debt, you would owe $900 for that fee. If the program fee is $250, you add that to the total cost. Assuming a monthly fee of $75 and the program lasts six months, the monthly fees total $450.

Your overall out‑of‑pocket cost would be $1,600 ($900 + $250 + $450), plus any remaining balance on the settled debt. Remember, the percentages, flat amounts, and monthly charge can vary by state, lender, and your specific agreement, so review your contract carefully.

• Safety note: verify all fees in the written agreement before signing.

You only pay Freedom Debt Relief's fees after a creditor agrees to settle a portion of your debt, and the amount is taken from the settlement savings account you've been building.

1. Stop regular creditor payments - As soon as you enroll, you're instructed to halt payments to the listed creditors. Continuing to pay defeats the leverage needed for settlement negotiations.
2. Fund the dedicated settlement account - You begin depositing a set amount each month (usually a percentage of your disposable income) into a separate account that Freedom uses to demonstrate 'ability to pay' during negotiations.
3. Negotiation phase - Freedom contacts creditors while your account balance grows. No fees are charged during this time; the only cost to you is the money you're setting aside.
4. Settlement achieved - When a creditor accepts a reduced payoff, Freedom calculates the settlement fee as a percentage of the agreed‑upon amount (see the 'how your settlement fee is calculated' section).
5. Fee is withdrawn - The fee is taken directly from the settlement savings account before the remaining funds are sent to the creditor. If the settlement is partial or the creditor never agrees, the fee is not charged and any unused balance is returned to you (see 'how refunds and partial settlements work').
6. Continue contributions until settlement - You keep adding to the account until each debt is settled or the program ends, at which point any leftover funds are refunded.

• Only pay fees after a successful settlement; never continue regular payments to creditors while the program is active.

Your settlement fee is a percentage of the actual amount Freedom successfully negotiates with your creditor, not the original balance you owe. In practice, the company first estimates a target settlement range (often expressed as a % of the balance); once a creditor agrees, the fee is calculated on that final settled figure and is typically spread across the months you continue making payments.

Because the exact settled amount can vary - depending on the creditor's willingness, your payment history, and any state‑level caps - you should expect the fee to adjust accordingly.

The fee is billed only after a settlement is reached and is taken from the payments you already make toward the debt. If a creditor never agrees, no settlement fee is charged. However, if the agreement changes mid‑program - such as a partial settlement or a revised payment plan - the fee will be recalculated based on the new settled total. Always review the settlement agreement details and verify the percentage applied before authorizing final payments.

Lender interest is a charge the creditor adds to the principal balance of your debt, calculated as a percentage (the APR) that accrues over time and compounds if not paid each billing cycle. This interest is built into the loan agreement you signed with the original creditor and continues until the debt is fully repaid or settled.

Freedom Debt Relief's fees are a separate, one‑time payment you make to the settlement company for negotiating a reduced payoff amount with your creditors. The fee is based on a percentage of the total settlement amount you actually pay, not on the original balance or any interest that would have accrued. It does not compound, and you only owe it if a settlement is reached.

• Make sure you review the settlement agreement and confirm the exact fee calculation before signing, because fees vary by case and state regulations may affect the terms.

Only the debts you enroll in Freedom Debt Relief can shift the overall amount you'll pay, and not all debts are treated the same. Included debts - most credit‑card balances, personal loans, and certain medical bills - are subject to the program's settlement fee, which is calculated on the amount actually settled; the larger the settlement, the higher the fee.

Excluded debts - such as federal student loans, tax debts, and child‑support obligations - never generate a settlement fee, so they don't change your total cost. Finally, debts that settle for less than the full balance (for example, a credit‑card reduced to a negotiated lump sum) will lower the fee because it's based on the reduced amount, while debts that remain unsolved continue accruing interest and may increase the total cost if you stay in the program.

• Included debts: Credit‑card balances, personal loans, some medical bills - fee applies to the settled amount.
• Excluded debts: Federal student loans, tax liens, child‑support, most government‑backed debts - no fee, no impact on total cost.
• Partial settlements: When a creditor agrees to a lower payoff, the fee is calculated on that lower figure, reducing your overall cost.
• Unsettled debts: If a debt never reaches settlement, interest keeps accruing and can raise the total amount you owe while you remain in the program.

Always verify which accounts qualify by checking your enrollment agreement and confirming each creditor's participation before enrolling.

If a debt never settles, Freedom Debt Relief does not charge you a settlement fee for that account, and any fees you've already paid may be refundable according to their refund policy.

When a debt reaches the end of the program without a successful settlement, the following can occur:

• No settlement fee applied - Because the fee is tied to a successful negotiation, a non‑settled debt does not generate that charge.
• Potential refund of prepaid fees - Freedom Debt Relief may return fees you paid up front for the un‑settled account, subject to the terms outlined in the 'refunds and partial settlements' section.
• Debt returns to its original status - You remain responsible for the full balance, interest, and any penalties the creditor continues to assess.
• Impact on your credit - The creditor may report the account as unpaid or in collection, which can affect your credit score until you address the balance another way.
• Option to pursue other resolutions - You can negotiate directly with the creditor, consider a different debt‑relief service, or explore bankruptcy if the debt is unmanageable.

Understanding these outcomes helps you gauge the risk of a failed settlement and decide whether to continue with the program or explore alternative strategies.

If you're unsure about the refund eligibility or next steps, contact Freedom Debt Relief's support team and review your agreement carefully. Always verify any fee or refund details in writing before making further payments.

If a debt is only partially settled or the settlement falls through, Freedom may return a portion of the fees you've already paid, but only for the amount of debt that actually resolves and according to the specific terms of your enrollment agreement. In practice, a refund is triggered when the negotiated settlement amount is less than the fee base used to calculate your original fee, or when a debt is dismissed entirely after you've paid fees; the returned amount is proportional to the undisputed portion of the settlement.

Partial settlements work similarly: the fee you owe is recalculated based on the final settlement figure, so any excess fee paid upfront is adjusted down. This adjustment appears as a credit or direct refund, depending on how you originally paid. Always review your contract's refund clause and confirm the settlement status with your case manager before assuming a refund, and keep records of all communications and payment receipts.

If you owe $5,000, $15,000 or $30,000, here's how Freedom Debt Relief's contingency fee typically plays out - assuming a 15 % fee of the amount actually settled and that the program reaches a successful settlement.

1. $5,000 original debt - Suppose the lender agrees to settle for $3,500. The fee would be 15 % of $3,500, or $525. You would pay the $525 only after the $3,500 is disbursed to the creditor.
2. $15,000 original debt - If the settlement offer lands at $9,000, the fee would be 15 % of $9,000, which equals $1,350. Again, the $1,350 is collected after the $9,000 payment is made to the creditor.
3. $30,000 original debt - A typical negotiated reduction might bring the balance down to $18,000. The fee would be 15 % of $18,000, or $2,700, payable only after the settlement funds are transferred.

All numbers are illustrative; actual settled amounts and fees vary by creditor, state regulations and the specific negotiation outcome.

Before you commit, verify the proposed settlement amount in writing and confirm that the fee percentage matches the agreement you receive.

Only pay the fee once the settlement money has been confirmed as received by your creditor.

If the fee schedule lines up with the way you'll actually pay, you'll notice these tell‑tale signs.

• Fees only kick in after a debt is settled - you won't be asked to remit any payment until Freedom has successfully negotiated a reduction and the creditor has accepted it.
• The settlement fee is expressed as a clear percentage of the reduced balance - you can calculate the exact amount you'll owe once the settlement figure is known, rather than being hit with a flat charge up front.
• Your monthly cash‑flow can cover the fee - the fee is usually collected as a single payment shortly after settlement; if that amount fits comfortably within the budget you've set for your post‑settlement payments, the structure is likely manageable.
• No hidden recurring charges - the fee schedule lists a one‑time settlement charge and no ongoing service fees, so the total cost stays predictable.
• Refunds or partial settlements are handled transparently - if a debt never settles, you're not charged; if a settlement is lower than expected, any prepaid portion is returned, keeping the overall expense aligned with actual results.

Remember to verify the exact fee percentage and timing in your agreement before enrolling.