Debt Settlement Fees by State

What debt settlement costs depends on where you live. See the fee rules for your state below — then get a free, no-obligation look at what one lower monthly payment could do for you.

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Debt amount Debt Amount$0-$5,000$5,000-$10,000$10,000-$15,000$15,000-$20,000$20,000 & Up

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Debt settlement fees are regulated on two levels: a federal floor of consumer protection that applies everywhere, and additional state-specific rules that vary. We built this page so you can see exactly what a legitimate provider is allowed to charge in your state before you ever sign an agreement. We protect our consumers by following the law in every state we serve — we never collect a fee before your debt is settled. This page is a plain-language starting point, not legal advice; statutes change and specifics vary by program.

The Federal Rule That Protects Everyone: No Upfront Fees

The Federal Trade Commission’s Telemarketing Sales Rule (16 CFR § 310.4(a)(5)) contains a complete advance-fee ban for debt relief services. In plain terms, a debt settlement company cannot legally take a fee from you until it has:

• Renegotiated, settled, reduced, or otherwise changed the terms of at least one of your debts;
• Reached a written settlement agreement that you have agreed to; and
• You have made at least one payment toward that settlement.

The Rule also requires providers to clearly disclose how long results will take, the total cost, and the risks before you enroll. If any company asks for money before it has settled a single debt, that is a red flag and, in the telemarketing context, illegal. Source: FTC.gov and 16 CFR Part 310.

How Debt Settlement Fees Are Calculated

When a fee is charged after a settlement, providers generally use one of two models. Many states that regulate the industry cap one or both of them:

• Percentage of enrolled debt — a percentage of the total balance you enrolled in the program. Common industry practice is 15%–25%; some states cap this figure.
• Percentage of savings — a percentage of the difference between what you owed and what you actually paid to settle. The percentage varies by provider and, in some states, by statute.

Either way, the federal advance-fee ban still applies: the fee is only earned and collected after a debt is settled and you have approved it.

How to Read This Guide

Only a handful of states set a specific statutory percentage cap on debt settlement fees. In the rest, the federal advance-fee ban applies and the fee percentage itself is a matter of contract and industry practice (commonly 15%–25%), not a fixed state number. We show each state honestly rather than invent a cap that does not exist in law.

• Statutory cap (green) — the state sets a specific maximum fee by statute (percentage of debt or of savings) on top of the federal advance-fee ban. The card shows the exact cap and cites the statute.
• Federal advance-fee ban + state licensing (blue) — no state statute fixes the percentage; the federal no-upfront-fee rule applies along with state licensing and consumer-protection law. Typical industry fees run 15%–25%.

States that set specific statutory fee limits: Illinois ($50 enrollment + 15% of savings), Minnesota (15% of debt or 30% of savings), Missouri (fee must track settlement savings, with no upfront fee), and the Uniform Debt-Management Services Act states — Colorado, Delaware, Nevada, Rhode Island, Tennessee, and Utah — which cap the setup fee at the lesser of $400 or 4% of enrolled debt plus a small monthly service fee. In all other states, the federal advance-fee ban and state licensing govern, and the fee percentage is set by contract within industry norms.

Debt Settlement Fee Guidelines in All 50 States

How We Protect Our Consumers

Our promise is simple: we follow the law in every state. We do not charge any fee until your debt is settled and you approve the outcome. We explain the full cost and timeline up front, we never make guarantees the law prohibits, and we keep your funds in a dedicated account that stays yours. If a program is not the right fit or is not available in your state, we tell you.

If payday loans are your main burden, our payday loan consolidation program may help regardless of your state’s rules, because we work directly with your lenders. Compare your options, see how it works, or check the lenders we work with.