Best debt relief companies of January 2025

A closer look at our top debt relief companies 

If you're struggling to manage overwhelming debt, seeking help from a debt relief company can be a crucial first step toward regaining control of your finances. The best debt relief companies can help negotiate settlements on your behalf and offer various tools such as credit counseling, debt consolidation and management plans. These services aim to help you avoid bankruptcy, get on top of your debt and rebuild your financial health.

Our team of experts has evaluated the top debt relief companies for 2024 based on factors such as fees, minimum debt requirements, customer support and overall reputation. Below, you'll find detailed information on each company's standout features and how they can help you manage your financial situation.

What is debt relief?

Debt relief refers to strategies designed to help individuals reduce or eliminate unmanageable debt. This assistance can come in various forms, such as debt settlement, consolidation or management plans, and typically involves working with a debt relief company or nonprofit organization to negotiate better terms with creditors. 

The primary goal of debt relief is to make the repayment process more manageable, potentially lowering interest rates, reducing monthly payments or even settling for less than the amount owed. It is most commonly used by people with substantial unsecured debts — such as credit card balances or medical bills — who struggle to make consistent payments.

Debt relief provides a way to avoid bankruptcy, which can have severe long-term consequences on your credit report. However, it is important to note that seeking debt relief may also have short-term impacts on your credit score and financial stability, depending on the route you take. 

Understanding the different forms of debt relief and how they work is critical to deciding which approach best suits your financial situation.

How do debt relief programs work?

Debt relief companies act as intermediaries between you and your creditors. Their primary function is to negotiate with creditors on your behalf to reduce the total amount of debt or adjust the repayment terms to make payments more affordable.

When you sign up for a debt relief program, the company often requires you to stop making direct payments to creditors and instead make monthly deposits into a separate account. This account accumulates funds that will later be used to settle the debt. The goal is to leverage these savings to offer creditors a lump sum payment for a reduced balance. 

Most debt relief companies charge fees, usually between 15 and 25 percent of the total enrolled debt, only after a settlement is reached. You may also pay a one-time setup fee and a monthly maintenance fee for the managed account.

Here's a closer look at your different options with these services.

Pros and cons of debt relief 

Seeking debt relief through a third-party company can be a great option if you’re deep in debt. Weigh the pros and cons of debt relief before making a decision.

When is debt relief a good idea?

The decision to apply for debt relief has serious potential benefits and consequences, especially if you're seeking debt settlement. Knowing what to do before you apply and what to expect once you do can help you choose the right type of relief for your situation and avoid pitfalls along the way. 

Don’t apply until you’ve asked yourself whether it’s the best solution for your circumstances. In most cases, debt settlement only makes sense if:

• You’re already behind on payments or are struggling to pay each month.
• You have thousands of dollars in unsecured debt, such as credit cards, medical bills or personal loans.
• Your credit score is too low to qualify for a debt consolidation loan.
• Your debt payments eat away half or more of your monthly earnings.
• You won’t be able to repay your debt in less than five years.
• Your only other option is bankruptcy.

How to apply for debt relief

Understanding the application steps can help improve your odds of getting the type of relief you need.

1. Determine which debts to include: You don’t have to add all of your credit accounts to a debt relief plan. Remember that you won’t be able to use accounts that become part of a debt settlement or management plan. Keeping some credit cards available for emergencies may be wise.
2. Get payoff estimates from each creditor: Although debt relief companies generally negotiate credit balances in debt relief programs, you should know what you owe. The most accurate balances should be reflected on your monthly statement. 
3. Decide which type of debt relief is best for you: Select the realistic option for your income and budget. Debt settlement is typically best if you’re behind on payments and can’t bring them current. Debt management plans may give you more affordable payment options if you've managed to make your payments on time.
4. Learn the eligibility requirements for each program: Many debt relief companies require you to have at least $7,500 of unsecured debt to qualify. Others may require proof that you’re behind on payments before considering you for relief. 
5. Know what documents you’ll need: You should have copies of current statements for all debts you plan to pay off. You may also need proof of income, such as pay stubs or W-2s. 
6. Fill out an application: Applying for debt relief may be a more involved process than getting a loan. The debt relief company may need you to help get contact information for each creditor or provide updated pay stubs and personal documents as needed. 

How to compare debt settlement companies 

Before choosing a debt relief company, you should ask five questions to ensure you’re dealing with a legitimate company that can help you achieve your desired results.

How can you tell if a debt relief company is legitimate?

Research and learn about debt relief programs before you select one. As you review debt relief options, you should consider:

Bold claims

Be wary of companies that make sweeping promises to resolve your debt without fully understanding your financial situation. According to the Federal Trade Commission (FTC), a legitimate debt relief company will evaluate your financial situation before making any claims about its ability to settle your debt. 

Promising results without considering whether creditors will agree to negotiate is a significant red flag. No company can guarantee specific outcomes, as creditors must first agree to the terms of any settlement or relief plan.

Upfront fees

The FTC explicitly warns against companies that charge upfront fees, because this is illegal under U.S. law. A legitimate debt relief company will not require any payment before it has successfully negotiated a settlement or relief plan with your creditors. If a company demands fees before starting work on your case — excluding setup fees — this is a strong indication that the company may not be reputable. 

Reputation and accreditation

Another key step in evaluating the legitimacy of a debt relief company is to check its reputation with consumer protection agencies. Contact your state’s attorney general office or your local consumer protection agency to see if there are any complaints against the company. The FTC also maintains a list of companies that have been banned from operating in the debt relief industry.

Additionally, reputable companies are usually accredited by organizations such as the American Fair Credit Council (AFCC) or the International Association of Professional Debt Arbitrators (IAPDA). Checking for these certifications can provide some assurance that the company adheres to industry standards and ethical practices.

Alternatives to debt relief

Consider the following alternatives to debt relief if working with a company isn't the best option for your finances. 

Frequently asked questions

How we choose our best debt relief companies