You’re in significant debt and have decided it’s finally time to pay off your balances. But you don’t know where to begin. You feel overwhelmed and are starting to think you might need the help of a professional.
There are companies out there that can help you negotiate your debt, and these are called debt relief or debt settlement companies. For a fee, debt relief companies will attempt to negotiate your debts with your creditors on your behalf.
One of these debt relief companies is Pacific Debt.
Headquartered in San Diego, Pacific Debt offers debt settlement for people with over $10,000 in unsecured debt. Below, we’ve explored the ins and outs of Pacific Debt so you can decide whether or not it’s the right debt relief firm for you. Pacific Debt is accredited by the Better Business Bureau (BBB) and is an accredited member of the American Fair Credit Counsel (AFCC).
Below, you’ll find more details regarding Pacific Debt’s services, fees and requirements.
Services offered |
Debt settlement/negotiation |
Minimum debt required |
|
Credit check |
Yes (Soft Pull) |
Debt settlement timeline |
12 – 48 months |
Consultation fees |
None |
Cancellation fees |
Contact Pacific Debt with any questions. |
Service fees |
15.00% – 25.00% of total debt enrolled |
Types of debt accepted |
Unsecured debt, which includes:
Note that private student loan debt is excluded. |
Accreditations |
|
Ratings |
|
Service limitations |
|
Free tools and resources |
|
Customer service |
|
To work with Pacific Debt, you must meet the following requirements:
If you’re considering working with a debt relief company, it’s important to weigh the potential risks and benefits. By having your debts negotiated, your credit score will likely take a hit. But if you can stay with the debt relief program, you will not need to file for bankruptcy and will be well on your way to becoming debt free in just a few years.
Before deciding whether or not you’d like to work with Pacific Debt, take a look at these potential benefits and risks.
Benefits |
Risks |
---|---|
Your debt could be reduced by as much as 50%. |
Your credit score will likely take a significant hit. |
You’ll work with the same account manager over the course of the program. |
Life after debt settlement could be difficult because your credit score will be much lower. |
There are no upfront fees. You don’t pay anything until your debt has been negotiated. |
Participating in a debt relief program means you must stop making minimum payments on your accounts, which could lead to phone calls from debt collectors and ensuing stress. |
You could be debt free in less than five years. |
This program isn’t worthwhile if you are primarily looking to negotiate private student loan debt. |
The fees for Pacific Debt are based on the total debt enrolled in the program. Fees range between 15.00% – 25.00% depending on the state you live in. No fees are collected upfront. All fees are paid when you make your monthly debt settlement payment.
Fees are collected once a debt has been successfully negotiated, the consumer has agreed to the negotiation and the first payment has been made.
Compared to other debt relief firms, Pacific Debt’s fees skew low. In fact, Pacific Debt is ranked the top company based on lowest fees from U.S. News & World Report.
On average, the program takes between two and four years, though it could be as quick as one year. Pacific Debt states that clients who stay on track with the program and make all of their monthly deposits pay approximately 50% of their enrolled balance before fees, or 65-85%, including fees. However, this range (before fees) can be anywhere from 20-55%.
Although no savings are guaranteed as not all creditors will settle, Pacific Debt has negotiated with myriad major banking institutions. Below are a few examples from Pacific Debt regarding how much they were able to negotiate certain clients’ debts down.
Creditor |
Settlement |
Original Balance |
Percentage |
---|---|---|---|
PNC Bank |
$1,425 |
$7,000 |
20% |
Citibank |
$7,175.50 |
$25,757.78 |
40% |
Capital One |
$8,377.85 |
$16,755.69 |
50% |
Generally speaking, customers have positive reviews about Pacific Debt and its services. The company has an A+ rating with the BBB. In addition, the company’s reviews on other websites are high, with the majority of reviewers happy with the services they received. On ConsumerAffairs.com, the company has a 4.5/5 rating based on over 500 reviews. In addition, they have a 9.4/10 rating on ConsumersAdvocate.org.
There are 37 positive reviews on the BBB, many of which praise the company’s trustworthiness, responsiveness, excellent communication and professionalism.
There are three complaints for Pacific Debt with the BBB, one about a consumer who stated no progress had been made after nine months in the program and another who believed there was confusion surrounding the fee structure for the program.
Overall, Pacific Debt appears to be very safe to use for those looking to settle their debt.
Debt settlement isn’t for everyone. Perhaps you are interested in maintaining your credit score and don’t want to see it suffer. Or maybe your total debt is just a few thousands dollars, and something you could realistically pay off in a couple of years. Or maybe your debt is so significant that you don’t anticipate being able to pay it off even if it’s negotiated to a lower amount.
Whatever the case may be, there are other ways to pay down debt than working with a debt relief company. Below, we’ve explored some of the most common methods for paying down debt.
Debt consolidation involves combining all of your debts and paying them off in one monthly payment using a personal loan. Debt consolidation is particularly common for people with significant credit card debt, though it can be used for all forms of unsecured debt.
It works like this: You take out a personal loan, also referred to as a debt consolidation loan. You then make monthly payments on the loan that are dispersed to your various creditors. If you need help figuring out whether a personal loan for debt consolidation is the right path for you, consider using LendingTree’s personal loan tool. You may be matched up to five differnet lenders after you fill out a short online form.
Pros
Cons
Minimum Credit Score
months
LendingTree is our parent company. LendingTree is unique in that you may be able to compare up to five personal loan offers within minutes. Everything is done online and you may be pre-qualified by lenders without impacting your credit score. LendingTree is not a lender.
A debt management plan involves working with a nonprofit credit counselor to organize and pay off your debt while also learning about good money habits. It works like this: You simply make a payment to the credit counseling agency each month who will then disperse your payment to your various creditors.
This method can often be a good decision for those whose credit score is too low to qualify for a personal loan with a good interest rate.
Pros
Cons
Find a nonprofit credit counselor near you using this online database from the National Foundation for Credit Counseling.
Many consumers are unaware that they can negotiate debts on their own. By negotiating their debts, consumers can often obtain a discount or a flexible payment plan.
Debts can be negotiated once they are delinquent, though you will likely have the most luck if those debts are already with a collections agency. You can attempt to negotiate with a debt collector by starting with a low amount you could realistically pay off. From there, negotiation will likely go back and forth in a process that could take months, if not years.
Pros
Cons
Bankruptcy should not to be taken lightly. It is only a wise decision for those in significant debt they don’t anticipate being able to escape from using any of the above strategies. There are two forms of bankruptcy: Chapter 7, in which all of your debts are forgiven and you begin from scratch, and Chapter 13, where you stick to a repayment plan.
If you have significant delinquent debt you cannot pay off and don’t envision ever being able to pay off, you might want to consider bankruptcy. You might also want to consider filing for bankruptcy if you are at risk of losing your home (this only works if you file Chapter 13), want to guard your retirement savings or have experienced a significant life event like a major illness or job loss.
Pros
Cons
Disclaimer
5.99% To 35.99% APR
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Advertiser Disclosure
6.99% To 14.99% APR
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Advertiser Disclosure
6.99% To 24.99% APR
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Advertiser Disclosure
3.34% To 16.99% APR
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By clicking “See Offers” you’ll be directed to our parent company, LendingTree. You may or may not be matched with the specific lender you clicked on, but up to five different lenders based on your creditworthiness.
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Source: https://www.magnifymoney.com/blog/pay-down-my-debt/pacific-debt-review/