Freedom Debt Relief and National Debt Relief are two of the largest debt settlement companies in the United States. They run nearly identical business models, advertise heavily, and appear at the top of every search for “debt help.” If you’re comparing them, you’re probably already in a tough financial spot and trying to figure out whether either one is actually worth the cost.
This is a direct, honest comparison. We’ll look at fees, results, complaints, and how each stacks up against alternatives. The goal is to help you make an informed decision, not to sell you on either company.
How Both Companies Work
Freedom and National use the same core model. You enroll unsecured debts (credit cards, personal loans, medical bills). You stop paying those creditors and instead deposit money into a dedicated savings account. The company charges fees. Once enough money accumulates, they negotiate with each creditor to settle the debt for less than the full balance. The whole process takes two to four years.
The critical thing to understand before calling either company: your credit score will take significant damage during this process. You must go delinquent to create the leverage they need to negotiate. If you’re currently current on your payments, enrolling in a debt settlement program means intentionally damaging your credit. That’s not a side effect; it’s how the model works.
Freedom Debt Relief: Key Facts
Founded and Accreditation
Founded in 2002. Member of the American Fair Credit Council (AFCC). Operates in most U.S. states. Has settled over $18 billion in debt according to company claims.
Fees
Freedom charges 15% to 25% of enrolled debt. The exact percentage depends on your state and enrolled balance. Fees are charged per settlement, only after a debt is resolved. No upfront fees (as required by FTC rules).
Minimum Debt
$7,500 minimum enrolled debt. Accepts credit cards, medical bills, personal loans, and some private student loans. Does not handle mortgages, auto loans, or federal student loans.
BBB and CFPB Complaints
Freedom has an A+ BBB rating but thousands of CFPB complaints on record. Most complaints cite fees being higher than expected, delays in settlement, and accounts being sued by creditors during the process. These complaints are common across the industry, not unique to Freedom.
National Debt Relief: Key Facts
Founded and Accreditation
Founded in 2009. Also AFCC-accredited. Operates in 41 states. Claims to have resolved over $1 billion in debt.
Fees
National also charges 15% to 25% of enrolled debt, with the same per-settlement, no-upfront-fees structure. Some reviewers report the higher end of that range (20% to 25%) being more common than with Freedom.
Minimum Debt
$7,500 minimum. Similar debt type eligibility as Freedom: credit cards, medical bills, personal loans. Same exclusions for secured debt and federal student loans.
BBB and CFPB Complaints
National holds an A+ BBB rating as well. CFPB complaint volume is lower than Freedom’s, though National is younger and smaller. Complaints follow similar themes: unexpected fees, creditor lawsuits, slower-than-expected resolution.
Head-to-Head: Freedom vs National
| Factor | Freedom Debt Relief | National Debt Relief |
|---|---|---|
| Founded | 2002 | 2009 |
| Fees | 15%-25% of enrolled debt | 15%-25% of enrolled debt |
| Minimum debt | $7,500 | $7,500 |
| AFCC-accredited | Yes | Yes |
| States served | Most states | 41 states |
| CFPB complaints | Higher volume | Lower volume |
| Track record | Longer (20+ years) | Shorter (15 years) |
The honest answer: Neither company is meaningfully better than the other for most people. They charge the same fees, use the same process, and produce similar results. The main differentiator is availability by state and the specific creditors they have relationships with in your area. If both are available to you, get quotes from both and compare the specific fee percentage they quote for your debt load.
The Real Question: Is Debt Settlement the Right Move at All?
Before deciding between these two companies, ask whether debt settlement is the right tool for your situation. It’s appropriate when:
- You’re already behind on payments or facing lawsuits
- Your income is too low or inconsistent to qualify for a nonprofit DMP
- You have a lump sum available (or can build one) but not enough to pay the full balance
- Bankruptcy would be more damaging to your long-term goals
It’s probably not right if:
- You’re currently current on your payments and want to stay that way
- Your income is stable and you could manage a DMP
- You’re worried about being sued (some creditors sue before settling)
- Tax liability on forgiven debt would create a significant problem
Our guide to debt consolidation vs debt settlement goes deeper on this distinction and helps you understand which approach fits your specific numbers. It’s worth reading before you call either company.
What Freedom and National Won’t Tell You
Both companies advertise that clients “settle for 50% of what they owe.” What they don’t advertise:
- That 50% figure is before their fees. Net savings are often 25% to 35%, not 50%.
- Not every creditor will settle. Some will sue you instead.
- During the 2-4 year process, interest and penalties continue to accrue on accounts you’re not paying.
- Forgiven amounts over $600 are typically reported to the IRS as income. You may owe taxes on forgiven debt unless you qualify for the insolvency exclusion.
- Your credit score will drop significantly and stay lower for years, even after debts are settled.
This isn’t a reason to avoid settlement if it’s the right path for you; it’s information they’re not incentivized to lead with.
The Nonprofit Alternative You Should Try First
Before enrolling with any for-profit settlement company, call an NFCC-accredited nonprofit credit counseling agency. A debt management plan through a nonprofit will:
- Not require you to go delinquent
- Cost $25 to $50 per month (versus 15-25% of your balance)
- Negotiate reduced interest rates, not reduced balances (which means less tax risk)
- Pay off your debt in full, usually in 3-5 years
Find a verified nonprofit counselor at nfcc.org. The CFPB’s debt collection resource center also has information on your rights throughout this process.
You should also review what it means to only pay minimums every month to understand how your balances will grow if you don’t take action soon.
The Verdict
Freedom Debt Relief and National Debt Relief are both legitimate, accredited companies. Neither is a scam. Between the two, Freedom has a longer track record but more complaints; National has a slightly cleaner complaint record but less history. For most people, the difference is marginal.
Our recommendation: Before choosing between them, exhaust your nonprofit options first. If you’ve already done that and determined that settlement is the right path, get quotes from both Freedom and National and compare the specific fee percentage and timeline they offer for your debt. Choose based on which quote is actually better, not which company has more TV ads.
Whatever you choose, go in with eyes open: know the credit impact, the tax implications, and the total cost including fees before you sign a contract.