What Is Pacific Debt Relief
- Pacific Debt Relief (formerly known as Pacific Debt, Inc.) is a U.S.-based debt settlement / debt relief company that helps people reduce unsecured debts such as credit cards, medical bills, personal loans, etc.
- They are accredited by things like the Better Business Bureau (BBB) and other industry-groups.
- Since its foundation (circa 2002), the company claims to have settled over US $500 million in consumer debt. For more information please visit pacific debt relief
How Their Debt Relief / Settlement Program Works
Here are the main steps in their process, what they do, what you do, and how it affects you:
| Step | What Happens |
|---|---|
| 1. Free initial consultation | You speak with a “certified debt specialist” to review your financial situation, how much debt you have, what kind, etc., and see if you qualify. |
| 2. Enrollment into the program | If you qualify (e.g. meet their minimum unsecured debt threshold, live in a serviceable state), you enroll. |
| 3. Monthly deposits / saving up | You make a regular monthly payment, usually to a special purpose account (or something equivalent), which accumulates funds to use when a creditor agrees to settle. |
| 4. Negotiation with creditors | Pacific Debt Relief negotiates with your creditors or collections agencies to try to settle your debts, meaning you pay less than what you originally owed. The creditor accepts a reduced sum (lump sum or negotiated payment). |
| 5. Settlements achieved, debts paid | As settlements are agreed upon and funds are available in your savings/escrow account, they are used to pay off those settled debts. The process continues until all enrolled debts are settled. |
Key Terms, Costs, Conditions & Timeframe
- Unsecured debt only: This includes credit cards, personal loans, medical bills, collections, etc. They do not handle secured debt (such as mortgages, auto loans), most governmental debt, or IRS debt or debts from judgments in most cases.
- Minimum debt requirement: Must have a certain amount of unsecured debt to enroll—usually $10,000 or more.
- Fees: They do not charge upfront fees. Their fee is built into the program (percentage of the debt enrolled). Often in the range of 15%-25% of the settled amount or enrolled debt, depending on state and specific case.
- Timeframe: Typically 24-48 months to complete the program if things go as planned. However, actual duration depends on how quickly negotiations succeed, how many creditors, how much saving is needed, etc.
- Impact on credit: There are negative effects on credit scores, because often payments to certain creditors will be missed (or stopped) to allow leverage for negotiation. Also, accounts may go into delinquency.
- No guarantee: Settlements depend on creditor agreement. Results may vary. Not all debts may be settled, and outcomes differ based on creditor willingness, the amount, the budget, etc.
Pros & Cons
To help you decide, here are some of the advantages and risks:
Pros:
- Can reduce what you owe significantly (potentially up to ~50% less) versus paying full amounts.
- Can help you become debt-free faster than making minimum payments over many years.
- One consolidated monthly payment rather than handling many delinquent accounts might reduce stress and negotiations with creditors. For more information please visit check n go
Cons / Risks:
- Credit score impact: Delinquency and missed payments will show up, which can hurt your credit rating.
- Possible legal action: Creditors may still take legal action, especially during the period when debts are unpaid or in default. Settlement companies can’t always stop lawsuits or judgments.
- Tax implications: Forgiven debt may be considered taxable income under U.S. tax laws in some cases. You should check with a tax professional.
- Might not succeed with all creditors. Some creditors may refuse to settle or demand more. Also, not all enrolled debts might be accepted by Pacific Debt Relief or may have conditions.
Is It Legit?
Pacific Debt Relief appears to be a legitimate operation. Factors in its favor include:
- Long operating history (since ~2002) with rebranding.
- Accreditations with BBB, International Association of Professional Debt Arbitrators, consumer reviews are generally positive.
- The disclosures of risks and fees are reasonably transparent.
Things You Should Ask / Check
If you’re considering using Pacific Debt Relief (or similar companies), here are questions to clarify:
- Exactly how my credit will be affected — what negative marks will appear, how many missed payments, etc.
- Which debts are eligible and which are not.
- Fee structure — what percentage, how it is charged, when do fees start accruing, if fees are included in monthly payments or separate.
- Timing: how long settlements usually take in your case, how many months before any negotiation begins.
- What happens if a creditor won’t negotiate.
- Alternatives: debt consolidation, credit counseling, bankruptcy — pros & cons compared to settlement.
