Best debt relief companies

Compare top debt relief companies

Apprisen, a nonprofit credit counseling agency founded in 1955, offers debt relief in all 50 states and is a National Foundation for Credit Counseling (NFCC) member. Based on an online search, there’s no evidence of recent legal action against the company.

The type of debt relief offered by Apprisen is a DMP. With this, you’ll repay everything you owe to your creditors on your unsecured debt (e.g., credit cards, personal loans) in 36 to 60 months. You may be able to use the program with as little as $100 to $250 in eligible debt.

Even though you’ll repay the entire principal amount you owe, your credit counselor will work on your behalf to negotiate lower rates or fees. You’ll pay a one-time enrollment fee of up to $45 and a monthly fee of no more than $45 while enrolled in the DMP.

Clearpoint Credit Counseling was founded in 1964 and is a division of another credit counseling agency, Money Management International. Clearpoint offers debt relief services in all 50 states, is a nonprofit entity and is a member of the NFCC. A search didn’t reveal evidence of recent legal actions taken against the company.

The type of debt relief offered by Clearpoint is a DMP that enables you to fully repay all your enrolled unsecured debt balances in three to five years. While the exact fee you’ll pay varies by state, you may pay $0 to $50 per month for the duration of the program, as well as a one-time enrollment fee of up to $75. However, the company does offer fee waivers for financial hardship.

You may not need to meet debt minimums to participate in Clearpoint’s debt management program, but this isn’t clear. Its parent company, Money Management International, has no debt minimums, so the same is likely true for Clearpoint. You’ll need to confirm this with your credit counselor.

Credit.org, a nonprofit credit counseling agency founded in 1974, offers debt relief options to people in all 50 states and is a member of the NFCC. Searching for recent legal actions against the company uncovered no issues.

Since Credit.org is a credit counselor, the type of debt relief it offers is a DMP, which allows you to fully repay your unsecured debt relatively quickly. This usually takes three to five years with most credit counseling agencies, although the specific timeframe it will take you with Credit.org is not defined.

You can enroll many unsecured debts into its DMP, including credit cards, collections and medical bills. Some companies require minimum debt to sign up for a DMP, but Credit.org doesn’t specify this.

The amount you’ll pay for the DMP varies by state. Even so, you’ll need to pay a relatively small one-time enrollment fee and a monthly fee. While the specific amount charged by Credit.org isn’t defined, maximums are set by state law and the expected range for these fees is $0 to $75.

Debt Management Credit Counseling Corp. (DMCC), a nonprofit debt relief company, was founded in 1999, is a member of the Financial Counseling Association of America (FCAA) and employs credit counselors who are certified by the National Association of Certified Credit Counselors (NACCC). A review didn’t reveal any recent legal actions against the company.

As a nonprofit credit counselor, the primary type of debt relief offered by DMCC is a DMP. With a DMP, you’ll fully repay your enrolled unsecured debts (e.g., credit cards, personal loans) in no more than 60 months.

You’ll pay a small monthly fee and a one-time enrollment fee for the service (the amount wasn’t disclosed, but it’s limited by state law and typically doesn’t exceed $75 for each type of fee). You must enroll at least $5,000 in eligible unsecured debt to use the DMP.

Additionally, DMCC offers a payday loan assistance program that may be able to help you fully repay your payday loans in six to 12 months at a 0% interest rate and with no fees. Since payday loans can carry high costs, this program has the potential to yield significant savings.

Founded in 1961, GreenPath Financial Wellness is a nonprofit credit counseling agency that offers debt relief in all 50 states and is a member of the NFCC. An online search for recent legal actions against the company uncovered no issues.

The type of debt relief offered by GreenPath is a DMP that enables you to fully repay all your enrolled unsecured debt in three to five years.

You can expect to pay a one-time enrollment fee of $0 to $50 and an ongoing monthly fee of $0 to $75 for the duration of the program. It’s unclear if you need a minimum level of debt to enroll, as this wasn’t disclosed.

National Debt Relief was founded in 2009, is a for-profit debt relief company and is a member of the American Fair Credit Council (AFCC), a well-known industry organization serving the debt relief community. A search for recent legal actions against National Debt Relief uncovered no issues.

Unlike the other companies on our list, the type of debt relief offered by National Debt Relief is a debt settlement program. You can enroll many types of unsecured debt in this plan, like credit cards, personal loans, lines of credit, collections, medical bills, repossessions, private student loans and even business loans.

You’ll need at least $10,000 in these debts to use the plan. You can expect it to take 24 to 48 months to get out of debt.

Once you sign up, National Debt Relief will work with your creditors to try to settle your debt for less than you owe. If the company successfully negotiates a settlement on your behalf and you agree to it, you’ll owe National Debt Relief a settlement fee ranging from 15% to 25% of your original enrolled debt balance. This fee range and structure are typical for this type of debt relief.

What is a debt relief company?

A debt relief company is designed to help consumers resolve their debt. That could be in the form of a DMP to help you pay off the full amount or by asking your lender to settle your debt for less than you owe. As a last resort, they might suggest you file for bankruptcy.

Debt relief companies can typically help with unsecured debt like:

• Credit cards
• Personal loans
• Private student loans
• Deficiency balances on prior repossessions (e.g., the remaining balance on an auto loan after the car was sold at auction)
• Medical bills
• Other past due bills turned over to a collection agency

You usually won’t be able to get help from a debt relief company for issues with secured debt (e.g., mortgages, auto loans) and federal student loans. These creditors are often unwilling to work with debt relief companies, so you’re better off working directly with your creditors on these loans.

» MORE: How to negotiate credit card debt

How to choose a debt relief company

If you decide to work with a debt relief company, you’ll get a free consultation where an advisor will review your finances and suggest a plan to help you get out of debt.

You shouldn’t be asked to pay fees until you receive a service. If you’re asked to pay upfront fees, do not do business with the company and consider reporting them to the Fair Trade Commission (FTC) or Consumer Financial Protection Bureau (CFPB)

A few other things to consider if you’re looking into debt relief are:

• Fee structure: With a DMP, you’ll pay an enrollment fee, followed by a monthly fee (maximum $75 each). With a debt settlement plan, you’ll typically pay a fee once an agreement is reached with your lender (e.g., 15% to 25% of the original debt).
• Payment amounts: You’ll pay off everything you owe under a DMP, but your lender might agree to a reduced interest rate or lower monthly payment. A debt settlement plan aims to pay your creditors less than you owe (e.g., 10% to 50% of your original balance).
• Program length: Once a settlement is reached, you’ll often have three to five years to pay off the agreed-upon balance. You’ll typically make monthly payments to the debt relief company, which will distribute the funds to your creditor.
• Credit score impact: Since you’re paying off everything with a DMP, your credit score will often improve over time. With debt settlement, the forgiven debt (the amount your creditor wrote off) is viewed negatively in your credit report, indicating you didn’t repay your loan as agreed.
• What happens if you don’t pay: If you don’t make the agreed-upon payments, the creditor may void the agreement. If you don’t think you can follow through with the plan, you’ll be better off financially if you don’t sign up.
• What it takes to reach an agreement: With debt settlement, there’s no guarantee the company will successfully negotiate an agreement with your creditors. If they don’t, you must be prepared to seek alternative debt relief.
• Tax implications: You may have to pay income taxes on forgiven debt. Consulting with a tax expert before proceeding with the plan is a good idea.

Alternatives to debt relief

If you need help repaying your debt, there are other options you can consider besides debt relief. In most cases, these alternatives will lead to credit score improvements. Plus, the costs are typically much less.

Credit counseling

Many reputable nonprofit credit counseling agencies will review your finances, provide financial advice and offer financial education for free. The best credit counselors will teach you how to manage your finances independently. They may also offer a DMP if it can help you avoid bankruptcy, repay your debt more quickly or lower your borrowing costs.

By learning to manage your finances, you’ll be better equipped to make sound financial decisions for the rest of your life. Plus, credit counseling may lead to eventual improvements in your credit score, mainly if you always make your payments on time and pay off or reduce your revolving debt balances (e.g., your credit cards).

Credit counseling is often a good option even if you’re in severe financial trouble and can’t afford your payments. Many credit counseling agencies also offer bankruptcy counseling, which you’ll need to complete before you file for bankruptcy. Plus, some offer housing counseling to help you avoid foreclosure or advise you on housing options (e.g., renting versus buying).

Debt consolidation

Another alternative you might consider is getting a debt consolidation loan. This is a good option for individuals who want to lower their payments or interest rates and pay off their debt in a fixed amount of time. With a debt consolidation loan, you can refinance your unsecured debt into a single loan with a fixed monthly payment.

You’ll typically repay a debt consolidation loan in no more than three to seven years with a fixed interest rate. Your monthly payment and interest rate will never change, so your payments are predictable. Plus, interest rates on debt consolidation loans are typically much lower than on higher-rate credit card debt, which can lower your overall borrowing costs.

If you can’t afford to make the monthly payment on a debt consolidation loan, you may not qualify. Also, while even people with bad credit may be able to get a debt consolidation loan, the better your credit score, the better the interest rate you’ll receive.

Watch out for debt relief scams

While there are legitimate debt relief companies, debt relief scams are something all consumers looking to use the service should be aware of. Some common red flags of debt relief scams include:

You can report a debt relief scam to the Federal Trade Commission or Consumer Financial Protection Bureau.

• Charging upfront fees
• Guaranteeing your debt will be reduced and/or paid off
• Contacting you first
• Instructing you to stop communicating with your creditors

If you come across a debt relief program that seems like a scam, consider filing a report of potential fraud with the FTC or CFPB.

Additionally, Ratigan, the financial wellness expert, advises to make sure you always read the fine print before signing up for any services to understand exactly what you’re getting into and what the costs will be. “Don't fall for debt relief scams or high-pressure sales tactics. Take the time to research your options and make sure you're working with a reputable company,” he said. “And if you're not sure where to start, consider speaking with a financial advisor who can guide you through the process.”

» MORE: How do debt relief companies work?

Bottom line

While the phrase “debt relief” is often used to mean debt settlement — a type of debt relief offered by for-profit companies — another type of debt relief you can get that’s typically more affordable and less hurtful to your credit is a DMP from a nonprofit credit counselor.

The goal of debt settlement is to pay your creditors less than you owe, which is why it often hurts your credit for a long time. In contrast, with a DMP, you’ll repay your full principal balance, but typically at a lower interest rate or with reduced fees. This type of debt relief can lead to credit score improvements over time, so it’s preferable to debt settlement.

Since debt management is often better for your credit and may cost less than debt settlement, most of the companies included on our list are nonprofit credit counselors that offer DMPs. They are all well established with no recent legal actions against them, and they belong to reputable trade organizations.

Methodology

To make our top picks for best debt relief companies, we collect 24 individual data points from 36 well-known companies offering various types of debt relief services. We then compared them on features including:

• Types of debt serviced: We considered the types of debts a debt relief company would work with, and gave higher consideration to those who work with more than credit card debts (ex., medical debt, payday loan or personal loans).
• Rates and fees: We gave preference to companies with clear rates and easy-to-access information about fees, including money-back guarantees and cancellation policies.
• Availability: Companies that are available to customers in all 50 states were given more consideration for top picks, but we did not exclude those with limited availability (based on other criteria).
• Accreditations: Since industry accreditations are crucial to a company’s legitimacy, we only considered companies with at least one professional accreditation, and more weight was given to those companies with more than one.
• Debt minimums: More preference was given to companies who had lower debt minimum requirements ($5,000 and below), but we did not exclude companies requiring a higher minimum if they excelled in other areas.

Since customer feedback is a critical indicator when evaluating companies, this was an important consideration when selecting our top picks. However, for those companies on our list with no ratings on ConsumerAffairs, there were other variables that made them stand out as good options for debt relief, and we factored those into our decisions.