5 Best Debt Settlement Programs [2024]

If you’re struggling to keep up with debt payments, you may be able to lower your outstanding balance and get out of debt faster if you enroll in a debt settlement program. Deb settlement companies offer these programs that can negotiate settlements with your lenders.

However, not all debt settlement programs are equal. We’ve analyzed the top ones and selected our top recommendations, so you don’t have to do the research.

5 Best Debt Settlement Programs

We compared the top 15 debt settlement programs in the U.S. to pick our top five recommendations based on factors such as:

• Minimum debt to enroll
• Fees
• Geographic availability
• Customer reviews
• Time for completion
• Potential savings

1. TurboDebt

• Minimum Debt: $10,000
• Fees: 15% to 25%
• Time to Settle: 24 to 48 months

TurboDebt has one of the best debt settlement programs in the U.S., as evidenced by its excellent customer reviews on Trustpilot (5 stars from 11,172 reviews) and Google (4.8 stars from 3,847 reviews).

Whether you have credit card debt, business debt, medical bills, payday loans, or personal loans, TurboDebt can help you settle your unsecured debt for less than you owe. The company has a good track record of helping clients save money. For example, Cincinnati residents enrolled in the company’s debt settlement program in 2023 saved an average of 56% before fees.

Pros

• Easy signup process
• Transparent about fees and services
• Ability to pay off debt in just 24-48 months
• Savings of an average of 50% of your unsecured debt before fees
• Free consultations

Cons

• $10,000 minimum debt required to enroll
• Your credit scores may dip if you settle your debts
• You must take the time–and have the discipline–to save up funds in your lump-sum settlement savings account while you cease making payments on your unsecured credit accounts

2. Century Support Services

• Minimum Debt: $10,000
• Fees: 25% of enrolled debt
• Time to Settle: 18 to 48 months

Century Support Services is an American Fair Credit Council (AFCC) accredited debt relief company that was founded in 2003. Once you enroll in the company’s debt settlement program, you’ll have access to an online management portal to keep track of your progress.

Fees vary depending upon which state you live in but are typically 25% of the enrolled debt. If you’re looking for a quick settlement, Century Support Services may be a good option since you may be able to settle your debts in as little as 18 months.

Pros

• Debts may be settled in as little as 18 months
• Easy-to-use online management portal
• AFCC accredited

Cons

• State-specific fee information is difficult to find online
• Customer support is only available on weekdays

3. Pacific Debt Relief

• Minimum Debt: $10,000
• Fees: 15% to 25%
• Time to Settle: 24 to 48 months

Pacific Debt Relief is an AFCC-accredited company that’s been in business since 2002. Other than most unsecured debts, the company may also be able to help you settle some student loans and business debts.

Pacific Debt Relief's website offers many educational resources that may be helpful for borrowers.

Pros

• AFCC accredited
• Many positive customer reviews
• May be able to help with business debts and student loans

Cons

• No live chat
• Not available in all states
• Minimum $10,000 debt required to enroll

4. JG Wentworth Debt Relief

• Minimum Debt: $15,000
• Fees: 18% to 25%
• Time to Settle: 24 to 48 months

JG Wentworth is a financial services company that also offers debt settlement programs with performance-based fees ranging from 18% to 25% of enrolled debts.

Most enrolled clients complete the program within 28 months, but what sets this company apart from others is the option to purchase “legal insurance” for an additional fee. This means that if you face legal action from a lender during the settlement process, an experienced debt settlement lawyer will represent you.

Pros

• Online portal for account management
• Legal insurance is available for a small fee

Cons

• High minimum debt requirement
• There may be additional provider fees
• Customer support is not available on Sundays

5. National Debt Relief

• Minimum Debt: $7,500
• Fees: 15% to 25%
• Time to Settle: 24 to 48 months

National Debt Relief was founded in 2009 and has since received excellent customer reviews on Trustpilot and the Better Business Bureau (BBB) due to its helpful customer service.

Compared to many other options, National Debt Relief has a lower minimum debt threshold of $7,500 to enroll in its debt settlement programs.  The company’s fees and time for program completion are in line with industry standards.

Pros

• Excellent customer reviews
• Up to 30% in savings after fees
• Ability to become debt-free within 48 months

Cons

• Online chat option not available
• Customer support is only available on weekdays

How Do Debt Settlement Programs Work?

If you have a lot of outstanding debt or maxed out credit cards and you can’t pay them off in full, enrolling in a debt settlement program may be a viable option. 

At this point, you may be asking, what is a debt settlement program, and how does it work? Here’s a step-by-step guide to help you understand:

• You’ll first need to contact a debt settlement company and ask if they offer a free consultation.
• You’ll provide more information about your debts, how much you owe on each account, monthly payments, and the interest rates on each bill, loan, or line of credit.
• Once you’ve decided which debts to enroll in the program, you’ll sign a debt settlement contract.
• You’ll have to stop making payments on your accounts for better negotiation leverage.
• If you decide to work with one, you’ll start putting aside money each month to save for the lump sum settlement in a separate savings account that is typically overseen or administered by the debt settlement company.
• The debt settlement company will begin negotiating with your lenders, on your behalf, to reach a settlement amount for your account(s) that is acceptable to you.  Typically, this amount can be as low as 50%-60% of your current debt amount.
• Once you reach a settlement and have saved up enough, you’ll make the lump sum payment to settle and close your accounts.

Pros and Cons of Debt Settlement Programs

Consider these debt settlement pros and cons before you sign an agreement to make an informed decision.

Pros of Debt Settlement Programs

• You may be able to significantly reduce the total amount you owe.
• You may be able to settle your debts sooner because there will be a lower amount to pay.
• You’ll be able to determine if this is the right solution for you since most companies offer free consultations.
• Debt settlement may help you avoid bankruptcy.
• You won’t receive any collection calls once your account is settled and closed.

Cons of Debt Settlement Programs

• Not all lenders are willing to negotiate, nor are they required to accept settlement offers.
• Your credit score may decrease significantly while you are settling your account(s) because you will not be making payments to your creditors while you save up for your lump sum payment.
• Some debt settlement companies may have high fees, which can be quite expensive compared to the savings you may get through a settlement and will reduce the total net savings you will end up seeing by choosing this form of debt relief.
• This form of forgiven debt may be considered taxable as ordinary income, so you may have to pay income taxes on the forgiven amount to the IRS and your state’s Department of Revenue (if applicable in your state).

How To Choose a Debt Settlement Program

With so many companies offering debt settlement programs, it’s important to do your research before you choose one that fits your needs. Consider these important factors when you’re weighing your options:

• Avoid any program that offers guaranteed results since there are no guarantees for successful debt resolution.
• Avoid working with companies that charge an upfront fee before delivering debt relief services.
• Compare the fees charged by different companies and ask if they’re based on debts enrolled or debts settled since the difference between these two amounts can be substantial in some cases.
• Ask friends and family for recommendations on whether they’ve ever used the services of a debt settlement company themselves.
• Read the company's reviews carefully to see what other customers have to say about its services.
• Make sure there aren’t any complaints registered against the company with your state attorney general’s office, the Better Business Bureau (BBB), or the Consumer Financial Protection Bureau (CFPB).

How Much Do Debt Settlement Programs Cost?

There may be two ways in which companies may charge for their debt settlement programs:

• A percentage of the debts are enrolled in the debt relief program.
• A percentage of the amount you actually save through the settlement.

Typically, fees range from 15% to 25%. For example, if you enroll $20,000 in a debt settlement program, or if you save a total of $20,000 through the settlement, you may pay $4,000 in fees if they charge 20%.

In some cases, there may be additional costs for setting up a savings account or for maintaining it.

How To Enroll in a Debt Settlement Program

Enrolling in a debt settlement program is easy and can usually be done in person or online. Here’s how the process works:

• Research debt settlement programs and pick one that fits your needs based on the amount and type of debt you have.
• Make a list of all the debts you want to enroll with details like outstanding amount, interest rate, current status of the account, and monthly payment.
• Book a free consultation with the company’s debt consultant to discuss your needs.
• Sign an agreement and start putting aside money to save for the settlement.  

Alternatives to Debt Settlement Programs

Debt settlement can help you pay off debt when done with the help of an experienced advisor. However, if you feel it's not the right option for you, there are other debt-relief options:

• Debt Management Plans: Debt management plans (or DMPs) from nonprofit credit counseling agencies can help set up a new payment plan with reduced interest rates. You may need to pay a small monthly fee for this credit counseling service.
• Debt Consolidation Loan: You can streamline your monthly payments by combining multiple debts into a single new loan at a lower interest rate with debt consolidation. Balance transfer is another option if you have excellent credit (800+).
• Debt Payoff Strategies: If you don’t have a lot of debt (perhaps less than ~$5,000), consider debt payoff strategies like debt snowball or debt avalanche to prioritize debts and speed up repayment.
• Negotiate Directly With Your Creditors: While it may take time and a lot of effort, you can also negotiate a settlement with credit card companies and lenders on your own to avoid extra fees.
• Bankruptcy: Filing for bankruptcy has significant long-term consequences, but sometimes, it may be the only option available. We recommend speaking to a bankruptcy lawyer to determine if it’s the right choice for you and your financial situation.

Is a Debt Settlement Program Right For You?

Debt settlement programs may be the right option for you if you’re at risk of bankruptcy but don’t want to file for it. Usually, it’s a viable solution if any of these apply to your financial situation:

• You’ve maxed out your credit cards.
• You’re struggling to make debt payments each month.
• You’re behind on payments.
• You’re receiving a lot of calls from debt collectors.
• You’ve accumulated a lot of late fees and have bad credit.
• You won’t be able to repay your debt in full.