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FAQs

Is the FDR Relief Program legit? ›

Is Freedom Debt Relief legit and can you get away with paying only a percentage of your debts just like that? FDR is a real company and its debt settlement program can save you real money. The catch is your credit report will catch fire. At least that's what it'll look like from a lender's point of view.

It helps debtors manage their debt burden and negotiates with creditors on their behalf. Will likely hurt your credit score: Like with any debt settlement company, working with Freedom Debt Relief will typically make your credit score drop at first. Depending on your situation, it could be a significant tumble.

Debt settlement typically has a negative impact on your credit score. The exact impact depends on factors like the current condition of your credit, the reporting practices of your creditors, the size of the debts being settled, and whether your other debts are in good standing.

Debt relief scams are common

While there are many legitimate debt settlement companies, debt relief scams do exist. Common red flags include: Unsolicited contact: Reputable debt settlement companies don't cold-call potential clients. Upfront fees: A debt relief company should never ask for payment upfront.

for FDR's debt settlement program only if they are already delinquent or show imminent financial hardship, such that, absent assistance, have no ability to continue making their minimum monthly payments.

If you sign up for Freedom Debt Relief's program, its negotiators commit to settling your eligible unsecured debt for less than what you owe. Depositing funds. Each month, you put money into an FDIC-insured program account that you control. Negotiation.

And, it can make sense to close your credit card accounts when you're dealing with overwhelming debt, as there are many risks to keeping them open, including the temptation to keep using them. But in most cases, you are not technically required to close all your credit cards when settling debt.

Debt collectors, especially debt buyers, are usually more likely to settle debt for less. So it may be better for you to discuss settlement options with collections, but be aware that debt settlement will impact your credit score. Paying in full is usually the best option, but not everyone can afford to do that.

Debt settlement will remain on your credit report for seven years. This means that for those seven years, your settled accounts will affect your creditworthiness. Lenders usually look at your recent payment history.

While debt settlement may be worth a lower credit score for some, it may not be for everyone. You should avoid debt settlement if: You can afford your monthly payments. You haven't explored options like debt management and consolidation.

How long after debt settlement can I buy a house? ›

The timing varies depending on individual circ*mstances and the lender's policies. Generally, individuals may need to wait at least 2 years after completing debt settlement before applying for a mortgage. During this time, it's essential to focus on improving credit and demonstrating financial responsibility.

In general, most debt will fall off of your credit report after seven years, but some types of debt can stay for up to 10 years or even indefinitely. Certain types of debt or derogatory marks, such as tax liens and paid medical debt collections, will not typically show up on your credit report.

Key Takeaways. There aren't any free government debt relief programs for credit card or personal loan debt other than bankruptcy. Many types of government debt relief exist in the form of grants and low-interest loans for specific purposes.

Creditors are not legally required to settle for less than you owe. Stopping payments on your bills (as most debt relief companies suggest) will damage your credit score. Debt settlement companies can charge fees. If over $600 is settled, the IRS will view this debt as a taxable income.

Key Takeaways

There aren't any free government debt relief programs for credit card or personal loan debt other than bankruptcy. Many types of government debt relief exist in the form of grants and low-interest loans for specific purposes.

Relief. Relief was the immediate effort to help the one-third of the population that was hardest hit by the depression. Relief was also aimed at providing temporary help to suffering and unemployed Americans.

Debt consolidation can negatively impact your credit score. Any debt consolidation method you use will have the creditor or lender pulling your credit score, leading to a hard inquiry on your credit report. This inquiry will decrease your credit score by a few points. However, this credit score decline is temporary.

Working with any debt settlement company comes with risks: You'll be asked to stop paying your creditors, which could add penalties and interest and further hurt your credit score. It may also open you up to lawsuits. In addition, any forgiven debt will be subject to income tax.