Best Debt Relief Companies of 2026

Debt relief companies, also called debt settlement companies, negotiate with your creditors to settle unsecured debts such as credit cards for less than the full balance. While they negotiate, you stop paying the enrolled accounts and save into a dedicated account instead. It can cut what you owe, but it damages your credit, can lead to collection calls or lawsuits, and the company takes a fee on each debt it settles.

We compared eight well-known US settlement companies on how clearly they publish fees, program terms and eligibility, the consumer protections and disclosures they offer, client support and availability. Fees and terms change and vary by state, so always read the program agreement before you enroll. If you can still afford your payments, a nonprofit credit counseling plan or a consolidation loan may cost you less.

Buying guide: how to choose

How debt settlement works

1. You enroll unsecured debts, such as credit cards, medical bills and some personal loans.
2. You stop paying those creditors and make one monthly deposit into a dedicated account you control.
3. Once enough has built up, the company offers a creditor a lump sum or short payment plan for less than the balance.
4. If you approve a settlement and it is paid, the company earns its fee for that debt.

Most programs take several years. Read our guide to how debt settlement works and what it costs.

What debt relief costs

Settlement companies usually charge a percentage of the debt you enroll, and some charge a percentage of the amount saved. Several companies in our ranking publish their fee on their own sites; others only explain how fees work. Fees often vary by state.

Under the FTC Telemarketing Sales Rule, a company that sells settlement services by phone cannot collect a fee until it has settled a debt and you have made a payment under that settlement. A company that asks for money upfront is a red flag. Some programs also charge account fees for the dedicated savings account, so ask about those too.

The alternatives, explained fairly

• Nonprofit credit counseling and a debt management plan (DMP). A counselor may get your card interest rates lowered and roll payments into one, and you repay the full balance, usually over three to five years. Fees are typically modest and capped by state law, and it is easier on your credit than settlement.
• A debt consolidation loan. If your credit is still decent, a personal loan at a lower APR can replace several card balances. You still repay everything, but you avoid settlement fees and credit damage.
• Bankruptcy. Chapter 7 or Chapter 13 can stop lawsuits through the automatic stay and may discharge debt. It has a lasting credit impact, but for some people it is faster and cheaper than settlement. A bankruptcy attorney can tell you if you qualify.

Compare all three in our guide to debt relief vs consolidation vs credit counseling.

Credit and tax effects

Settlement programs usually damage your credit because enrolled accounts go unpaid for months. Late payments, charge-offs and settled accounts can stay on your credit report for up to seven years. Creditors can also add late fees and interest, send accounts to collections or sue.

Forgiven debt may count as taxable income. A creditor that cancels a large enough amount may send you a Form 1099-C, though you may be able to exclude it if you were insolvent. See our guide to how debt relief affects your credit and taxes.

Red flags

Walk away from any company that asks for fees before settling a debt, promises to stop all collection calls or lawsuits, claims guaranteed results, tells you to stop talking to your creditors, or will not give you the fee and program terms in writing. Check complaints with your state attorney general and the CFPB complaint database before you sign.