Debt settlement cost worksheet: fees and amount saved

This worksheet does arithmetic on numbers you enter. It shows the fee your contract terms produce, the amount saved, and your net savings after fees. The fee comes from one of two per-debt formulas in the FTC's Telemarketing Sales Rule: a share of the total fee in proportion to the debt, or one percentage of the amount saved.^[1] The rule defines the amount saved as your balance at enrollment minus what you paid. A result here is not a finding that a fee is lawful or reasonable. The rule fixes how a fee is allocated across debts, not how large the total fee may be. A creditor may cancel a different amount. That amount, reported on any Form 1099-C, is measured when the debt is canceled. The IRS says canceled debt is generally taxable in the year of cancellation unless an exception or exclusion applies.^[2] The worksheet does not estimate tax or credit damage. The sources we read give no figures for either, so a number from this page would be invented. This is general information, not legal, tax or financial advice, and it names no company.

The worksheet

Nothing you type leaves your browser. Use the numbers from your own contract and statements. Example figures in the formulas below are made up to show the arithmetic.

Part 1: your program, in dollars Balance at enrollment of the debts that settled ($) Amount you paid, in total, to settle those debts ($) How is your fee stated in the contract? Percentage of the amount saved (%) Any other fees or charges you will pay, in dollars (optional)

Part 2: check one debt against the per-debt formulas Balance of that one debt at enrollment ($) Amount paid to settle that one debt ($) Total balance enrolled at enrollment ($, for the proportional formula) Total fee stated in the contract ($, for the proportional formula) Percentage of the amount saved (%, for the percentage formula)

Results appear here. Fill in Part 1, Part 2, or both, then press Calculate.

The formulas, in plain words

Percentage of savings: the amount saved on a debt is the amount owed when it was enrolled minus the amount actually paid to satisfy it; the fee is a percentage of that, and the percentage cannot change from one debt to another.^[1] Made-up example: a $10,000 debt settled for $6,000 saves $4,000; at 20 percent the fee is $800.
Proportional share: the fee for one debt bears the same proportional relationship to the total fee as that debt bears to the total debt, both measured when the debt was enrolled.^[1] Made-up example: with a $4,000 total fee on $20,000 enrolled, the formula gives a $2,000 fee for a $10,000 debt.
Net savings: amount saved minus fees. This is our arithmetic, not a figure from any source.
Amount saved: the enrollment balance minus the amount paid, before fees. This is the rule's measure, not necessarily the amount a creditor cancels or reports on a Form 1099-C, and whether any canceled amount is taxable for you depends on your facts.^[2]
Flat option: the dollar-amount choice in the worksheet is not one of the rule's formulas; it just uses the figure you enter.

When a fee may be requested at all

The rule bars requesting or receiving any fee for a debt relief service until at least one debt has been renegotiated, settled, reduced, or altered under an agreement you executed, and you have made at least one payment under it.^[1] Funds can be held in an account for fees and creditor payments only if five conditions in the rule are met, including that you may withdraw without penalty and get your funds, other than properly earned fees, within seven business days of asking.^[1] See how to verify a debt settlement company and fee structures. The rule's definition of a debt relief service (16 CFR § 310.2) covers programs to alter the terms of debts owed to unsecured creditors or debt collectors, and the rule applies to telemarketing, defined as a plan using telephones with more than one interstate call;^[3] whether it covers a given provider depends on those definitions and the facts, which this page does not decide.

What this worksheet leaves out

Tax: the IRS says canceled debt is generally taxable, with listed exceptions and exclusions, including debt canceled to the extent you were insolvent and debt canceled in a bankruptcy case, and that a creditor may send Form 1099-C.^[2] We do not compute tax because rates and your circumstances vary; see canceled debt and taxes and ask a tax professional.
Credit damage: not calculated; no figure in our sources. For what we cover on it, see what to expect from debt settlement.
Debts that do not settle, balances that grow, lawsuits, and other fees: not modeled, apart from the optional other-fees box.

How to verify this yourself

Read 16 CFR § 310.4(a)(5)(i)(C) for the formulas and IRS Tax Topic no. 431 for the tax rule, and compare them with the numbers in your own contract. The references below link both.

What this page does not cover

It is not advice on whether to enroll in debt settlement, and it does not say whether any provider's fees comply with the rule. For debt relief more broadly see credit repair vs. debt settlement vs. consolidation. The Register reports dated checks on specific companies against our Standard; it is not a recommendation.

When we will update this page

We revisit it if 16 CFR § 310.4 or IRS Topic 431 changes. Sources last read 2 October 2026.

What you can do next

Find a company — see which specific US companies we checked and what we could verify.
How we check — the rules and sources behind each result.
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