I Am Scared, Sad, and Confused About Staying in the Debt Settlement Program With Freedom Financial. – Sandra

“Dear Steve,

I emailed you yesterday and was not very clear about my situation. I would like to start by saying I am scared,confused and feel like I made the wrong decision when I chose to go the debt settlemnt route-especially now with everything I am reading.

At the end of December I contacted Freedom Financial to learn more about debt settlement b/c I was terrified of the word bankruptcy. I always equated it to the worst case scenario and how it would ruin my credit forever.

My husband suggested the bankrupcy route and I felt that was not the right choise. Needless to say I am not a financial expert he is but we won’t go there) I was the one who had started a children’s franchise and had to close it b/c it basically drained all our money-which we got from home equity lines of credit as well as cc’s to be exact over 65,000 in debt.

I was able to get a job that started in Jan. and felt that I could pay back the debt but needed some help. I heard Freedom Finanical on the radio and a time that I was feeling very deperate and did not think there were any other options. I did show the agreement to my husband and he spoke to the rep and settled on paying $900/mo which would be paid in 36 mo-the debt was lowered to $36,000 and we were told our credit would be bad until the cc started gettng paid. We were ok with this.

Since this has happend a couple of new developments were that the FFM wrote us about1 cc that did not accept the plan-Advanta Corp-which was the business card. I continued getting calls from them and have been avoiding contacting them until recently.

They have agreed to reduce my debt from $7,100 to $3,567 to be paid off in 5 mo. They are the only card that continues to contact me but I am nervouse about all the other things happening with debt settlement companies and I have been trying to contact FFM for 1 week and have not been able to talk to anybody on the phone.

What do you suggest I do? I do not want to pull out and lose the $4,500 that I have already paid them which they confirmed would go to enrollment fees and they would not start paying off the cc until the fall. Also re the Advanta is there anyway I can not pay this business cc and is this on my credit report?


Dear Sandra,

First, let me assure you that I am here to help. We’ll get to the bottom of this together.

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I can hear the panic in your words. You seem to be all over the place all at one time. Let’s get focused on these issues and tackle them in order.

It is reported that Freedom Financial is one of the largest debt settlement companies around. With all the recent lawsuits and subpoenas against debt settlement companies there is going to be a whole lot of activity by states against these companies. Don’t be surprised to see a number of them forced out of business.

I don’t remember reading anything about Freedom Financial being sued by a state but from what you describe it sounds like the typical debt settlement business model, and they probably will be. I did do a quick web search and found this mention of Freedom Financial. Even more disturbing comments can be found here.

I did look at the site of Freedom Financial, and I was surprised to read their FAQ page. It openly addresses many of the issues that other debt settlement companies hide. So I’ll have to give them a thumb up for that.

One of my strong objections to debt settlement companies is that they front load the program with fees. Months of payments only go towards paying fees for services not delivered yet and that seems wrong to me. At the very least, if someone wants to terminate from the program the customer should be entitled to a total refund of fees on deposit but not earned yet. I have no idea what the Freedom Financial contract says about this. I’ve never seen one but some previous clients say it is not refundable.

What concerns me most about your experience with Freedom Financial is that you say your calls are going unreturned. When it comes to money issues, returning calls or even leaving a called back message is critical so the customer does not feel abandoned and start freaking out. I think you know what I mean.

I am a huge fan of lump-sum debt settlements when the person has the cash in hand to make a coordinated offer and pay all the settlements in full right then. I am not a fan of debt settlements where deposits are made monthly. The problem is that this fragmented approach tackles one creditor slowly, at a time, and even if you knock off some debts, but one of the final creditors refuses to deal, you are screwed.

I don’t know if bankruptcy is right for you but what I do know for an absolute fact is that not investigating bankruptcy for fear of how you might feel by going bankrupt, is a mistake.

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I think what you should do right now is to contact a local bankruptcy attorney, go in for a free bankruptcy consultation, and listen to what the bankruptcy lawyer has to say. You don’t have to make any decisions at that meeting.

Then go home and let the information percolate inside your head for a few days. Think about what you learned, listen to your gut, and then make a decision about if you think bankruptcy is right for you.

The bankruptcy attorney might be able to make an argument for the return of money paid for debt relief services within 90 days prior to you filing. Be sure to ask the attorney if this might be possible.

I think you are a good person, trapped in a bad situation, and surrounded by a tornado of guilt, regret, uncertainty, and remorse. You want to do the right thing but you just can’t see clearly what that is. Go meet with the bankruptcy attorney and then

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Do you have a question you'd like to ask me for free? Go ahead and click here.

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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15 thoughts on “I Am Scared, Sad, and Confused About Staying in the Debt Settlement Program With Freedom Financial. – Sandra”

  1. You are welcome Steve. Per our client agreement guidelines we do not normally issue any refunds when clients choose to terminate, however any funds that have been saved and left over in her special purpose account ( a 3rd party bank account that was set up for her for the program) will be sent back to her shortly after her termination request. If we did not meet the terms of our agreement in any way our client satisfaction team can be contacted and she can request a refund, but it sure looks like we did everything we could in this situation… it’s just tough to be in debt these days. Fortunately, we’re happy to report that we were able to successfully resolve $25million in debts for our clients just last month, so many of our clients have gotten great results. Thanks for accommodating our response and helping our client out. Cheers.

  2. Steve, I would like to point out a few things about two sources that you have used here (I will not name them as you know which ones they are). Both of those forums have confirmed that the allegations posted on the respective forums were baseless and were perpetrated with malicious intent. You cannot blindly believe each and every forum that puts up information. There is too much information online and you have to look at the genuineness of the site that it is on.

    • If you can direct me to an independent site that has a thread of positive comments on it I’d be happy to quote that as well.

      Thanks for brining the confirmation statement to my attention, can you point me to that link so I can see it?


  3. Hello Sandra,

    My name is Steve K. and I work for Freedom Financial Network’s debt settlement company, Freedom Debt Relief, at the corporate office in San Mateo, CA. We have been in business for 7 years now, have helped close to 60,000 clients. We do not charge clients up-front fees; they are charged over the course of 18-22 months. Sandra, feel free to contact me at 800-544-7211, ext 16269 and I will make sure you are taken care of.

    • Hi Steve,

      Thank you for responding to the post and offering your direct contact information. I applaud your efforts to reach out in a proactive way to help your clients overcome their issues.

      Question, if Sandra does decide to withdraw from the program today, what money that she has paid to date would be refundable to her?


    • Hello Steve,

      I am confused. You mention you do not charge your fees upfront, but they are charged over 18 to 22 months.

      The fact that you charge your fee over the first 18 to 22 months is what is meant by upfront fees. Since your fees are frontloaded (meaning they are not paid after the settlements are acheived) your clients have to save up the money to pay your fees before they will have enough money for most of their settements. (hence your fees are paid upfront) Therefore, your company gets paid regardless of client success. That is why settlement companies have come under fire from the FTC and many State AG offices.

      If you charge all of your fees upfront and 18 months later your client loses their job and is forced to file BK, then you get to keep all of your fees, even though you may not have achieved any settlements for the client. You also state below in response to the refund question by Steve Rhode, you are not in the practice of issuing refunds. Does this sound fair and equitable?

      If you put a client on a 3 or 4 year program, but charge all of your fees in 18 months, then where do you get the money to support that client over the last 18 to 30 months in the program? Seems to me that they would just be a liability at that point since you already made all of your money. After they pay all of their fees, what leverage does your client have if they feel you are not doing a good job? At that point aren’t they just stuck with whatever you give them?

      So the only winner in that scenario is the settlement company. So to correct your comment, freedom debt releif does charge front loaded fees, over the first 18 to 22 months in a program and regardless of client circumstances, you are not in the habit of issuing any refunds after those fees are paid.

      What I don’t understand is that if you routinely get great settlements for your clients, wouldn’t it be in everyones best interest if you didn’t charge all of your fees upfront? What is wrong with charging a fee to your client after you get an actual settlement funded?

      If you did this, then the clients would achieve settlements faster, their creditors would get paid sooner (dramatically decreasing the likelyhood of a lawsuit) and you would get paid good money for performing a good service. So with all of the positives of this type of performance based fee structure, please tell me why most settlement programs, yours included, choses to instead charge all their fees upfront and based on debt amounts not performance?

      I think consumers would feel more comfortable if you actually had a financial interest in helping them succeed, not just in signing them up.
      .-= Damon Day´s last blog ..Debt Relief USA files Bankruptcy – Clients get Burned =-.

  4. Debt settlement is not right for everyone, but for an appropriate financial profile, it can be the least expensive and fastest alternative to bankruptcy with the shortest long-term effect on your own credit viability.
    All debt settlement companies that are members of The Association of Settlement Companies (TASC), which is the industry’s regulator—have negotiated and continue to negotiate with the major credit card companies and financial institutions. While your creditor may publicly deny working with third-party debt settlement companies, a TASC member is regulated and audited, and must provide an accurate assessment of its ability to negotiate with your specific creditors.

    • Seonah,

      That’s great.

      Do members of TASC also agree to not charge up-front fees for debt settlement services and if they do to offer a full refund policy if customers change their mind before settlement funds are saved, or do they agree to collect fees for service as a pro-rata percentage of the monthly payment collected from the consumer?


    • Hello Seonah,

      I must respectfully disagree that TASC is an industry regulator. I know they are a self proclaimed regulator. Your post is a bit misleading and could easily give consumers the impression that TASC is some sort of objective third party oversite board or even possibly a government regulatory body.

      However, TASC is basically an association of settlement companies that have broad, and rarely enforced guidelines. Settlement companies pay dues directly to TASC so there might be a little bias there. Most of the TASC board members are presidents or owners of settlement companies. Do you really think they are going to create guidelines that would effect their own companies bottom lines?

      Claiming that members of TASC are audited is a major stretch. In fact, many of the companies that are currently being investigated by state attorney generals for false and deceptive practices are in fact members of TASC, Including Freedom Debt Relief which is under investigation and has been issued a subpoena for their records by the AG’s office in NY.
      .-= Damon Day´s last blog ..TASC – Just Another Marketing Gimmick =-.

      • Damon’s typical rant against TASC is simply wrong. In his previous post he said “Claiming that members of TASC are audited is a major stretch…” is quite erroneous. How does Damon come to this conclusion? I know this is completely false because about two months ago I was in fact, secretly shopped by TASC’s 3rd party auditing company. I had no idea the person was anyone other than a typical client calling in asking how the program works. Only later when I received an email that TASC had sent my manager, did I learn I was secretly shopped. The mystery shopper had a list of questions that were based on many of the industrys’ critical issues such as “will I be sued” or “what happens to my credit”. After each question they list the answer that I actually provided. If I had answered any question without full disclosure, it would have been considered a violation and our company would be forced to correct the violation(s) before penalties would be enforced. I am more than happy to provide this secret shopper report to anyone like Damon who constantly challenges the validity of TASC.
        Solve Debts

        • Well Hello Brad from Solve Debts. Welcome to the party. I don’t know you personally and based on your comment, I will assume that you are a debt settlement sales person that is upset that I am educating consumers about the reality of your industry.

          I can understand that you are upset, and you would prefer to just keep the status quo, however, I feel I must tell you, that if there was ever a time not to stick up for TASC or USOBA it would be right now. In fact, if you really are a good guy and really do have a good program, the best advice I can give you is to get out of those organizations as quickly as possible. They are not doing you any favors.

          Maybe you missed the Senate hearing last night, but if you are concerned about your job, I recommend you skip the movie tonight and watch the hearing instead.

          Now since I don’t know you personally, I will give you the benefit of the doubt and just assume that you are a sales rep, doing your job and are drunk on the company cool aid. Perhaps you are actually convinced that what TASC does is real consumer advocacy.

          In light of that, I will go easy on you and simply respond to your comment. If you want to get into a public debate about what TASC really does and whether or not they actually help consumers, then we can have that debate.

          However, in the interests of saving your job, please talk to your boss, or the owner of solve debt before you come on a public forum and stick up for TASC or try to justify that what they do is in the consumers best interests. I can promise you that you will not like the outcome because it will be such an unfair debate. The facts are all on my side.

          Now to respond to your comment. Let me see if I understand. I am supposed to think that TASC is so great because they had someone call you and you didn’t lie? WOW!!! Well lets give this man a standing ovation. You didn’t lie! Well that is just awesome. Aren’t you supposed to tell the truth? You are claiming credit because you didn’t lie. Well doesn’t that just say it all. The best we can hope for is just someone that doesn’t lie. What an industry huh brad.

          So TASC doesn’t really make you do anything that would really help people other than just spot check to make sure you do not out right lie to people and commit fraud. Is that about right?

          Ok lets take this further. What if I sold stock and you were my client. I knew that there was a 75% to 90% chance that this stock was going to tank. However instead of telling you that, I just said, well, there is a chance the stock could go down.

          Ok, I didn’t lie, but I didn’t really tell the truth now did I?

          It was interesting, the Government Accountability Office (GAO) recently did an undercover study and found that there were quite a bit of TASC and usoba companies that lied to their investigators. When usoba was asked at the Senate hearing what enforcement action they planned to take against the companies that were lying to consumers, usoba just dodged the question. Interesting. I think I will side with the GAO study over some commissioned TASC study.

          Before you respond, you might want to actually watch the video of the Senate hearing:


          Now Brad, I will give you an Atta Boy for not lying to consumers, but be careful when you stick your neck out for organizations that are obviously not doing what they claim to be doing. People might start to get the wrong impression.
          .-= Damon Day´s last blog ..Mass Exodus in Debt Settlement Industry, Take Heed or BE TRAMPLED =-.

        • I’ll take some time soon to pick apart your outlandish email and point to many instances of factual error. But one thing is obvious, you clearly don’t do much “consulting” if you have time to write such a lengthy response to my post; much less all the other cat fights with new horizons (?) or whatever company that was that made you look pretty foolish

        • Hey Brad,

          I appreciate your concern for my time, however my business is educating and helping consumers. So actually taking the time to respond to comments like yours is a very efficient use of my time.

          If I spend 20 minutes explaining to you why TASC doesn’t help consumers in the way that it claims to help consumers, thousands of people can actually read that and learn about what TASC really does. So the next time they are on the phone with a sales person that says things such as we are TASC certified or TASC is the SEC of the settlement industry, or something foolish like that, the consumer will immediately know that sales person is full of BS.

          I can help many more people in a forum like this than I can individually on the phone. So I don’t mind taking the time to do it.

          Now, since you are a debt settlement sales person, I am not surprised that you would say I look foolish. What else are you supposed to say? I represent a very real threat to your commission checks by teaching consumers what you would prefer they didn’t know. So I can understand your animosity toward me and I don’t hold it against you.

          I will anxiously await your response to my outlandish “email” and look forward to learning where my factual errors are.
          .-= Damon Day´s last blog ..TASC Fails to Protect Consumers, Regulators Take Notice =-.

        • Hey Brad,
          The news just isn’t getting any better for TASC and USOBA members. It has been 4 months now and I am still waiting for you to let me know about all of the factual errors in my last post.

          You guys rethinking that TASC membership over at Solve Debts yet? It seems to be quite an anti consumer message you are funding over there.

  5. Sandra’s thoughts that bankruptcy is still the only solution scares me. I believe that if she can get OUT of the debt settlement she should.
    Now providing that she does not add a penny of charges to the cards she now has I think she could be out of debt in a little over 3 years. She is paying $900 a month to FF and believes she can pay off the $7100 in five months, this means that she has $1600 a month to pay off bills. $54,900/$1600 about 35 months.
    If Sandra picks up the phone to try to reduce her CC debt herself with the companies maybe she can pay it off faster.

    I will keep Sandra and her family in my prayers.


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