The Association for Consumer Debt Relief (ACDR) represents responsible, accredited debt relief providers. We advance strong consumer protections, education, transparency, and access to quality debt relief services.

Debt relief is a federally regulated service that resolves unsecured debt on behalf of consumers for a fraction of what they owe. For many Americans facing financial hardship, it offers an effective, regulated alternative to bankruptcy. Independent research shows debt relief helps consumers who may not be well served by other options regain control of their finances and work toward long-term stability.

Unlike secured debt, which is backed by collateral like a car or a home, unsecured debt is not tied to an asset. The most common forms of unsecured debt include credit card accounts, personal loans, and medical debt. Student loan debt is also considered unsecured, but cannot be negotiated down in most instances.

Yes. Debt relief helps American consumers save nearly $2 billion every year.

• On average, ACDR members reduce a consumer’s debt on settled accounts by nearly 32% (including fees).

• Consumers save $2.64 for every $1.00 paid in fees.

• Through debt relief, a consumer holding a $30,000 account at 27% APR could settle their account for as little as $24,000 (including fees) over a four-year term.

The average program starts showing results in just four months.

No. A client who settles just one account realizes net savings. Importantly, savings are realized on a per-debt basis, so a client does not need to settle all enrolled debts before realizing savings. In addition, settling the first debt builds the savings reflex and accelerates the “snowball” effect, with each completed settlement making the next one easier to fund.

Yes. The FTC’s 2010 update to the Telemarketing Sales Rule (TSR) provides the foundation for consumer protection in the debt relief industry. Among other protections, the TSR ensures that:

1. Consumers do not pay upfront fees. Instead, fees must be tied to results. Debt relief providers receive a percentage of enrolled debt only after a settlement is reached, approved by the consumer, and the consumer makes a payment on the settlement. This ensures a success-based model where the consumer’s interests and the debt relief provider’s interests are fully aligned.

2. Consumers always control their money. The consumer’s dedicated account must be maintained by an independent institution. Consumers must be able to withdraw the funds at any time, for any use, without penalty.

3. Providers must disclose specific information, ensuring transparency through the process. This includes potential impact on credit scores or potential litigation, and prohibits debt relief companies from making guarantees or misrepresentations of results.

In addition to robust federal protections, many states have their own statues regulating debt relief. Finally, ACDR’s own accreditation holds members to rigorous standards that go beyond state and federal rules.

Debt relief is not a loan. It allows consumers to partner with an experienced consultant who negotiates directly with the consumers’ creditors to reduce the amount owed. Debt relief does not involve consolidating accounts or restructuring interest rates, though debt relief providers sometimes refer consumers to other programs—like debt consolidation—if and when it could be helpful for the client. 

No. Debt relief does not require a lawyer or judicial process and gives consumers a pathway to repaying their debts for less than the balance owed, rather than abandoning outstanding balances altogether. Debt relief also does not carry the high reputational risk of bankruptcy or years-long credit damage and adverse impact on access to financing and housing.

No. Debt consolidation is different from debt relief in several ways. First, most debt consolidations programs involve a personal loan, balance transfer or borrowing against a consumers’ home equity (HELOC). A debt relief settlement does not involve a loan or collateral. Second, rather than consolidating credit accounts, debt relief maximizes consumer savings by treating each account separately, working toward individual settlements across accounts.

The “debt management plans” offered by nonprofit credit counselors require consumers to pay fees without reducing the principal balance on debt. Nonprofit credit counselors are only permitted to restructure the debt and repayment terms (e.g., interest rates and timing). The result is that credit counseling often keeps consumers tethered to high interest debt for longer periods of time at higher overall costs. By contrast, debt relief providers negotiate down the principal debt and help consumers obtain more meaningful relief at lower cost.

A typical consumer has reliable income, but is facing severe debt, and often sees minimum payments consuming a large percentage of their income, with high interest making timely repayment extremely difficult. Often, these consumers have endured an unforeseen major life event, such as job loss, divorce or a medical issue. Many have been forced to increase credit card use to cover basic expenses. Debt relief is not the right option for every consumer, but it can be very helpful for many.

Yes. A consumer is free to leave the program at any time, without penalty and without any fees on any unsettled debt