To cancel Freedom Debt Relief, call your assigned debt consultant at 800-910-0065 and tell them you want to end the agreement. The company’s stated policy is that you can cancel at any time with no early termination penalty, and whatever remains in your dedicated savings account is returned to you. The call itself is the easy part. What takes more care is protecting the money you’ve deposited, understanding which fees you still owe, and figuring out what to do about debts that were never settled.
Check Your Account Before You Call
Log into your Freedom Debt Relief dashboard or request a current statement first. You need three numbers in front of you: the balance sitting in your dedicated savings account, the list of debts that have already been settled, and any settlements currently under negotiation. That snapshot tells you what refund to expect, which fees are legitimately owed, and which creditors you’ll be dealing with directly after you leave.
Pay special attention to settlements that were reached but aren’t fully paid out yet. Walking away from the program doesn’t erase an agreement you already signed with a creditor. If payments on a settled debt are still in progress, you’ll need to keep making them yourself. Miss those, and the creditor can treat the settlement as broken and reinstate your original balance plus the interest that had been waived.
Make the Cancellation Stick
Call the consultant line and state clearly that you’re terminating the agreement. Then follow up the same day in writing. Email works if your agreement allows electronic communication; certified mail is safer if it doesn’t, because the delivery receipt is proof you can hold onto.
Your written notice should include your full name, account number, the date of your cancellation call, and a plain statement that you’re ending the agreement. Keep copies of everything: the letter, the mailing receipt, and any reply. Then ask Freedom Debt Relief for written confirmation that the account has been closed. If nothing arrives within a couple of weeks, send a second written request. That paper trail is your best defense if a dispute comes up later about whether or when you canceled.
Stop the Automatic Withdrawals From Your Bank
Your deposits into the dedicated account are usually set up as preauthorized electronic transfers from your checking account. Canceling with Freedom Debt Relief should stop these, but don’t assume it happens immediately. Call your bank separately and place a stop-payment order on the recurring transfer.
Federal law gives you the right to stop a preauthorized electronic transfer by notifying your bank at least three business days before the next scheduled payment. You can do this by phone or in writing. If you call, the bank may require written confirmation within 14 days, and your verbal stop-payment order lapses if you don’t send that follow-up.1eCFR. 12 CFR 1005.10 – Preauthorized Transfers Skipping this step is a common way to lose a few more deposits from your checking account while the cancellation is still processing.
Getting Your Dedicated Account Balance Back
The money in the dedicated savings account belongs to you. Freedom Debt Relief confirms that any remaining balance is returned when you cancel. The account is usually held at a third-party bank rather than at Freedom Debt Relief itself, so the refund is released by that bank.
The amount you get back won’t equal every dollar you deposited. Fees for debts that were already successfully settled will have been deducted, and any payments already sent to creditors on your behalf are gone. What’s left after those charges is yours. If the refund looks off, request a detailed accounting that shows every deposit, every fee charged, and every payment sent to a creditor.
Fees You May Still Owe
Freedom Debt Relief charges a settlement fee ranging from 15 to 25 percent of your total enrolled debt, with the exact percentage depending on your state. Federal law limits when that fee can be collected. Under the Telemarketing Sales Rule, no debt relief company can charge you a fee until it has actually settled or reduced at least one of your debts and you’ve made at least one payment under that settlement.2eCFR. 16 CFR Part 310 – Telemarketing Sales Rule You do not owe fees on debts that were never settled.
If Freedom Debt Relief settled three of your seven enrolled debts before you canceled, you owe fees only on those three. The fee on each settled debt must be proportional to the total program fee, based on the ratio of that individual debt to your total enrolled balance.2eCFR. 16 CFR Part 310 – Telemarketing Sales Rule A flat fee charged regardless of which debts settled, or any fee attached to a debt that was never resolved, is worth pushing back on.
What Happens to Debts That Were Not Settled
This is the hardest part of leaving mid-program. Any debts that weren’t settled before you canceled are still owed, and interest and late fees have been piling up the whole time you were enrolled. Debt settlement typically requires you to stop paying creditors directly while the company negotiates, so by cancellation those unsettled balances are usually larger than when you started.
Creditors aren’t required to wait patiently while a settlement company works. They can send accounts to collections, report missed payments to the credit bureaus, or file a lawsuit at any point during the program. Once you cancel, contacting each remaining creditor yourself is the next step: some may set up a payment plan, others may have already charged the debt off and sold it to a collection agency, and a few may be willing to negotiate a settlement directly with you.
The late payments and collection activity already on your credit reports will stay there for up to seven years from the date of the first missed payment. Canceling the program doesn’t reverse that history, so factor it into how you approach each remaining creditor.
Tax Consequences of Settlements Already Completed
If Freedom Debt Relief settled any of your debts for less than the full amount, the forgiven portion is generally taxable income. Creditors have to report canceled debts of $600 or more to the IRS on Form 1099-C, and you’ll receive a copy to include on your tax return for the year the debt was canceled.3Internal Revenue Service. About Form 1099-C, Cancellation of Debt
There’s a significant exception. If your total liabilities exceeded the fair market value of your total assets at the time the debt was forgiven, you were insolvent, and you can exclude the forgiven amount from income up to the extent of that insolvency.4Office of the Law Revision Counsel. 26 U.S. Code 108 – Income From Discharge of Indebtedness Many people in debt settlement programs qualify. The exclusion is claimed by filing IRS Form 982 with your return.5Internal Revenue Service. What if I Am Insolvent A tax professional can walk through the numbers with you if you’re not sure.
Canceling the program doesn’t erase this tax exposure. Any settlements completed before your cancellation date still generate taxable income in the year they were finalized.
If Freedom Debt Relief Pushes Back
An outright refusal to cancel would be unusual given the company’s stated policy. Disputes are more likely to be about how much you owe in fees for settlements already reached, or how long it takes to return your dedicated account funds. Put your position in writing and attach copies of your cancellation notice, delivery receipts, and account statements that back up your version of events.
Check your original contract for a dispute resolution clause. Many debt settlement agreements require mediation or arbitration before either side can file suit. Mediation uses a neutral third party to help you reach agreement; arbitration produces a binding decision. If neither process resolves things, or your contract doesn’t require them, a consumer protection attorney can review the situation. Many offer free initial consultations, and some take cases on contingency where there’s a clear Telemarketing Sales Rule or state consumer protection violation.
You can also file a complaint with the Consumer Financial Protection Bureau online at consumerfinance.gov/complaint or by phone at (855) 411-2372.6Consumer Financial Protection Bureau. Submit a Complaint Your state attorney general’s office may also accept complaints about debt relief companies and sometimes mediates between consumers and businesses.
Where to Turn Next
Leaving debt settlement doesn’t mean you’re out of options. A nonprofit credit counseling organization can look at your full financial picture and may set up a debt management plan with your creditors. Under that kind of plan, you make one monthly payment to the counseling organization, which distributes it to your creditors, typically at lower interest rates or over a longer term rather than at a reduced principal. Creditors on the plan generally agree to stop collection activity and waive late fees.7Consumer Financial Protection Bureau. What Is the Difference Between Credit Counseling and Debt Settlement Unlike settlement, credit counseling doesn’t ask you to stop paying creditors, and the arrangement usually doesn’t create taxable forgiven-debt income.