Debt settlement companies can negotiate your debt with lenders to reduce the total amount you owe so you can regain control over your finances. Americans carry an average balance of $6,501 on their credit cards as of 2023. Gen X carried the most balance of any generation at $9,123 for the same time period.

The best settlement companies have transparent pricing, a good track record of helping customers, and experience negotiating fair settlements. We’ve done the work of finding the best debt settlement companies that meet these criteria. Read on for our top recommendations.   

5 Best Debt Settlement Companies

We analyzed 15 top-rated debt settlement companies in the U.S. to pick our top five recommendations. We ranked these companies based on these criteria:

  • Free consultation
  • Customer reviews
  • Geographic availability
  • Digital experience
  • Proven track record
  • Fees
  • Minimum debt requirement
TurboDebtNational Debt ReliefAccredited Debt ReliefNew Era Debt SolutionsFreedom Debt Relief
Minimum Debt$10,000$10,000$10,000$10,000$7,500
Fees15%-25%15%-25%25%15%-23%15%-25%
Free ConsultationYesYesYesYesYes
  • Minimum Debt: $10,000
  • Fees: 15% to 25%
  • Free Consultation: Yes

TurboDebt is a top-rated debt settlement company based in Florida that offers strategic planning, consulting, and advising services to help you find the right debt relief program for your financial situation.

TurboDebt can negotiate with your lenders and help you negotiate settlements for any type of unsecured debt, including personal loans, credit card debt, business debt, and medical bills. If you stay with the program until completion, you may be able to save a considerable amount of money.

For example, in 2023, Katy residents enrolled in debt relief programs saved an average of 55% of their debt before fees.

TurboDebt has 5/5 stars on Trustpilot from 11,172 reviews as of July 3, 2024. It also has a 4.8 rating from 3,847 Google reviews. If you’re struggling to keep up with debt payments, TurboDebt is one of the most highly-rated companies in the U.S. for debt settlement.

Pros

  • Free consultation
  • You may be able to save as much as 50% of your debt before fees
  • You may be able to pay off debt in 24 to 48 months
  • Easy and convenient signup process

Cons

  • Doesn’t offer programs to help with tax debt or secured debt
  • Debt settlement may lower your credit score
  • Minimum Debt: $7,500
  • Fees: 15% to 25%
  • Free Consultation: Yes

National Debt Relief is based in New York City and has been serving clients since 2009. While the company only offers debt settlement, it can refer you to partners for other services like debt consolidation and credit counseling.

National Debt Relief can help you settle most types of unsecured debts, as well as some student loans.

Pros

  • May be able to help settle some types of student loans
  • Offers referrals for other debt-relief options
  • Offers free consultation

Cons

  • Doesn’t offer services in all states
  • No live chat option
  • Minimum Debt: $10,000
  • Fees: 25% of settled debt
  • Free Consultation: Yes

Accredited Debt Relief ranks high for customer service. Customers can get in touch with the company through fax, mail, email, phone, and live chat. The debt settlement company also has good reviews on Trustpilot.

However, Accredited Debt Relief currently only offers services in 30 states and the District of Columbia, so it's not as widely available as some of the other options on our list.

Pros

  • Wide choice of customer support options
  • Good customer reviews

Cons

  • Not available in all states
  • Not all debts are eligible for settlement
  • Minimum Debt: $10,000
  • Fees: 15% to 23%
  • Free Consultation: Yes

New Era Debt Solutions is a California-based debt settlement company founded in 1999. While you’ll need to have at least $10,000 in eligible unsecured debt to enroll in its program, the company does have high customer ratings.

New Era claims to help customers save 57% of their debts on average. However, its services are not available in all states.

Pros

  • Claims to help reduce debts by 57%
  • High customer ratings
  • Has a track record of helping clients since 1999

Cons

  • Not available in all states
  • Fees are charged based on enrolled debt, not settled debt
  • Minimum Debt: $7,500
  • Fees: 15% to 25%
  • Free Consultation: Yes

Freedom Debt Relief helps people with a wide range of unsecured debts, including private student loans and payday loans. The company also offers a program guarantee through which it may potentially limit its fees in some cases.

With over 20 years of experience, Freedom Debt Relief claims to have helped borrowers save $18 billion in debt over the years. It also has mostly positive reviews on Trustpilot.

Pros

  • Transparent about fees
  • Helps with private student loans
  • Good customer satisfaction ratings

Cons

  • Not available in all states
  • Charges fees based on enrolled debt

How Do Top-Rated Debt Settlement Companies Work?

Here’s what you can expect when you work with a top-raated settlement company:

  • Once you enroll in a debt settlement program, you’ll need to stop making debt payments and start putting aside money in a separate savings account.
  • You’ll need to continue saving money until you’ve saved enough for a settlement, which may take 24 to 48 months.
  • Your debt settlement company will negotiate with your lenders to reduce what you owe.
  • If your lenders accept the settlement offer, you’ll need to make the lump sum payment to settle your account.
  • Your account will be closed once the settlement is completed.  

Pros and Cons of Debt Settlement Companies

Consider these debt settlement pros and cons to decide if it’s the right solution for you.

Pros

  • You may be able to save a considerable amount of money.
  • Once you settle your debts, you’ll stop receiving calls from debt collectors.
  • You may be able to get out of debt faster compared to other options like debt consolidation or debt management plans.
  • You may be able to avoid bankruptcy.

Cons

  • Not all lenders may be willing to accept settlement offers or negotiate with debt settlement companies.
  • You’ll see a reduction in your credit score once you stop making payments on your debts.
  • Debt settlement will remain on our credit report for up to seven years.
  • You may have to pay taxes on the forgiven debt.

How To Choose the Best Debt Settlement Company

There are a number of factors you should focus on to find the best debt settlement company:

  • Check to ensure that the company can settle your type of debt. Most companies will only be able to help with unsecured debts.
  • Check if you qualify to enroll in the program based on the amount of debt you have. Most debt settlement companies have a minimum debt threshold to enroll in their programs.
  • Compare the costs of different companies to find one that has the most affordable fees.
  • Make sure the company doesn’t charge any upfront fees before the debt settlement process starts.
  • Make sure the company is transparent about its fees and how its program works.
  • Check the company’s reviews on Google, Trustpilot, Better Business Bureau (BBB) or other review sites.
  • Make sure there are no complaints against the company with the Better Business Bureau, state attorney general, or the Consumer Financial Protection Bureau (CFPB).

Who Qualifies for Debt Settlement?

While each company has slightly different eligibility criteria for debt settlement, you’ll usually be able to qualify if you meet these requirements:

  • You must meet the minimum debt threshold for the company’s settlement program.
  • You must have the ability to put aside money each month to save for the settlement.
  • You must be willing to stop making payments or must have already missed several payments on your debts.
  • You must want to avoid filing for bankruptcy.

How To Apply for Debt Settlement

If you think debt settlement is the right option for you, follow these steps to apply for the program:

  • Make a list of top-rated debt settlement companies that settle your type of debt.
  • Make sure you meet the minimum debt criteria.
  • Compare the settlement fees charged by different companies to find one that’s the most affordable.
  • Contact the company for a free consultation to discuss your financial situation.
  • Provide more details about your debts, lenders, interest rates, loan amounts owed, and any other information the company asks for.
  • Sign a debt settlement contract to allow the company to negotiate with lenders on your behalf.

Alternatives to Debt Settlement Companies

There are a number of other debt relief services available if debt settlement isn’t right for you. Consider these alternatives:

  • Debt Management Plans: Nonprofit credit counseling agencies can enroll you in a debt management plan (DMP) to help you pay off your debts in three to five years. You’ll make a single payment each month to the agency, which will be distributed to your creditors.
  • Debt Consolidation: You can use a debt consolidation loan or balance transfer credit card to combine multiple debts. Ideally, the new loan will have a lower interest rate compared to what you’re currently paying.
  • Direct Negotiation: Another option is to negotiate a settlement with your lenders yourself. Your lender may agree to a new repayment plan or agree to a settlement if you can demonstrate financial hardship.
  • Bankruptcy: As a last resort, you may want to file for Chapter 7 or Chapter 13 bankruptcy. We recommend consulting a bankruptcy lawyer to determine if this is the right option for you.

Are Debt Settlement Companies the Right Choice?

A debt settlement company may be able to help you become debt-free faster and save a considerable amount of money. However, it may not be the right option for everyone.

Debt settlement may be right for you if:

  • You’ve maxed out your credit cards.
  • You’re dealing with debt collections.
  • You’re struggling to make minimum payments each month.
  • You have several missed payments and late fees.
  • You have bad credit.
  • You can’t afford to pay off your debts in full.