What Debts Are Not Accepted By Freedom Debt Relief

Freedom Debt Relief generally won't take secured debts, student loans, certain tax obligations, business liabilities, and many older utility collections.

These types are usually excluded because they're either protected by law, tied to collateral, or fall outside the settlement program's scope.

• Secured debts such as mortgages or car loans (the loan is tied to the property or vehicle).
• Student loans - especially federal loans, which are non‑negotiable under most settlement plans.
• Back taxes - IRS or state tax balances are typically not eligible.
• Business debts incurred by a company rather than a personal obligation.
• utility bills that are past the statutory collection window or have been sent to a third‑party collector (often considered 'old' debt).

If your debt falls into one of these categories, you'll need to explore alternative solutions like refinancing, direct negotiation, or a separate repayment plan. Always verify the specific terms with your lender or a qualified advisor before proceeding.

Secured debts - like mortgages or car loans - are usually excluded early because the lender holds collateral that can be repossessed if you stop paying, so a settlement would jeopardize that security.

Freedom Debt Relief's program focuses on unsecured debt, which lacks such backing and can be negotiated without threatening an asset.

Since the collateral gives the creditor a strong legal claim, the settlement team often can't achieve a favorable reduction, and the risk of losing the property outweighs the potential benefit. Before you apply, verify whether each account is secured or unsecured in your statements, and check any lender agreements for clauses that might prohibit settlement.

Car loans are secured by the vehicle you purchase, so the lender can repossess the car if you miss payments; because the loan is tied to a physical asset, Freedom Debt Relief typically won't include it in a settlement program.

Mortgages work the same way but are secured by real‑estate, giving the lender the right to foreclose on the property for non‑payment; this higher‑value collateral also makes mortgages ineligible for most debt‑relief settlements.

Check your loan agreement or speak with a qualified advisor to confirm whether your specific loan qualifies for any alternative relief options.

Student loans are generally not eligible for Freedom Debt Relief's settlement program, especially federal loans, because they are protected by separate federal repayment options. Private student loans may sometimes be considered, but the program usually excludes them as well, so you should assume they stay off the table unless you receive a specific exemption from the company.

For example, a borrower with $20,000 in federal Direct Loans will find that Freedom Debt Relief cannot negotiate a reduced payoff; instead, they must explore Income‑Driven Repayment, Public Service Loan Forgiveness, or other federal programs. A borrower with a private loan from a bank might be told the same, unless the lender explicitly agrees to settlement - a rare circumstance. If you're unsure whether your student loan qualifies, contact your loan servicer first, review any settlement offer in writing, and verify that the terms comply with federal regulations before proceeding.

If you owe tax debt, back taxes, or government debt, Freedom Debt Relief often won't take those balances into its settlement program.

These types of obligations are treated separately from most consumer debts because they're backed by legal authority and can trigger liens, wage garnishments, or tax‑refund offsets. While each case is reviewed individually, the following patterns are common:

• Tax debt (current or past‑due) - Federal or state income taxes are usually excluded. The IRS and many state agencies have their own hardship programs, and debt‑settlement firms typically lack the legal framework to negotiate these balances.
• Back taxes - Unpaid taxes that have accrued penalties and interest often remain outside the program. Some lenders may consider them if the amount is small and there's a formal payment‑plan in place, but most will reject them.
• Government debt - This includes unpaid student‑loan balances held by the Department of Education, child‑support arrears, and other federal obligations. Because these debts are not 'consumer' debts, they rarely qualify for settlement.

If you have any of these debts, verify the specific eligibility rules in your Freedom Debt Relief agreement and consider contacting the appropriate agency (IRS, state tax authority, or federal loan servicer) for alternative relief options.

*Note: Always review your contract and consult a qualified advisor before proceeding with any debt‑relief strategy.*

Business debt that's tied to a company - not a personal loan - usually can't be handled by Freedom Debt Relief because the program only works on unsecured consumer obligations. If the debt is recorded in the business's name, is secured by business assets, or is a corporate loan, it will typically be excluded.

1. Check the debtor's name - If the account lists a business entity (LLC, corporation, partnership) as the primary borrower, Freedom's settlement service does not apply.
2. Identify any collateral - Business loans often require equipment, inventory, or property as security. Secured debts are ruled out because settlement can't legally release the lien on those assets.
3. Distinguish personal guarantees - Some owners personally guarantee a business loan. Even though the personal guarantee creates a personal liability, Freedom will treat it as a personal unsecured debt only if the lender agrees to settle the personal portion separately. Verify this with the creditor before proceeding.
4. Review loan type - Lines of credit, commercial mortgages, and vendor financing are usually classified as business debt and fall outside the program's scope.
5. Confirm eligibility with Freedom - Before you submit an application, ask Freedom to review the specific account. Provide the loan documents so they can tell you whether the debt qualifies or must be handled through another avenue, such as a business restructuring or negotiation directly with the lender.

Always verify the exact nature of the debt and any personal guarantee before assuming it can be settled through a consumer‑focused program.

If the debt you're eyeing for settlement shows any of these red flags, it probably isn't a good candidate.

• A judgment or pending lawsuit exists - Creditors often become more open to a lump‑sum payoff once they have a court order, because they prefer to close the account without spending more on garnishment or collection costs.
• The balance is very low compared to the original amount - When the remaining debt is a small fraction of what you originally owed, lenders may simply write it off or demand full payment, making a negotiated reduction unlikely.
• The creditor has already hard‑collected or threatened aggressive actions - If you've received repeated calls, wage‑garnishment notices, or asset‑seizure threats, the creditor may view settlement as a way to avoid the expense of enforcement, but the same pressure can also signal that they are unlikely to accept a reduced offer if they think they can collect the full amount through legal means.

Always verify the current status of your account and any applicable state laws before proceeding with settlement negotiations.

If a particular debt is deemed ineligible, Freedom Debt Relief will simply leave that account out of the settlement program while continuing to work on the qualifying debts.

The practical steps are:

• You'll receive a notice identifying the excluded debt and the reason (e.g., secured loan, tax lien, or government debt).
• The settlement negotiations for the remaining debts proceed as usual; the excluded account is not included in any offers or payment plans.
• You remain responsible for the excluded debt, so you should decide whether to keep paying it, refinance it, or explore other relief options such as a separate repayment plan or a hardship program directly with the creditor.

Because the program treats each account independently, having one excluded debt does not automatically jeopardize the settlement of the others.

Just make sure you stay current on the excluded debt to avoid additional collections activity while your other accounts move toward resolution.

Always double‑check the creditor's terms and any state‑specific rules before taking action on the excluded account.

Collections on old utility bills sit in a gray area for Freedom Debt Relief - sometimes they're eligible, sometimes they're not. The program generally looks at how old the debt is, whether it's been transferred to a collection agency, and if the utility company still holds any legal claim. If the bill is several years past due and the utility has sold the account, Freedom may consider it, but if the original creditor still owns it or the debt is disputed, it's often excluded.

Because the criteria vary by state and by the specific collection agency, you'll need to verify the status of each utility debt before applying. Ask the collector for a written verification of the balance, the original account number, and confirmation that they have the legal right to collect. This documentation helps Freedom assess whether the debt fits their settlement model and prevents you from getting stuck with a debt that can't be negotiated.

If a utility collection is ruled out, Freedom will simply leave it out of the settlement plan, and you'll remain responsible for paying it directly or exploring other options like a payment arrangement with the utility. Always double‑check the collector's paperwork and, if unsure, consider consulting a consumer‑rights adviser before proceeding.