Pacific Debt Relief Review

Our take on Pacific Debt Relief

Pacific Debt Relief attempts to settle your debts with creditors for less than what you owe and claims that clients' debt is typically reduced by around 50%, minus fees, when they complete the program. But the program has high fees, could damage your credit score, and offers no guarantees of success. Think of Pacific Debt Relief (PDR) as a last resort only after considering alternatives like a debt management plan with a credit counselor or a debt consolidation loan.

How Pacific Debt Relief works

Pacific Debt Relief’s program generally takes 24 to 48 months. Clients who complete the program can reduce their enrolled debt, typically by about 50%. After fees, clients generally end up paying between 65% and 85% of the amount they originally owed.

Here’s how it works:

1. Free consultation

The Pacific Debt Relief process starts with a free consultation.

You’ll talk with an agent about your financial situation and existing debts, and they’ll tell you if they think the program is right for you. This consultation includes a detailed budget and estimate, so you know how much the program might ultimately cost you.

If the agent doesn’t think the debt settlement program is a good fit, they may recommend other options, such as a debt consolidation loan.

2. Enroll and stop paying creditors

If you enroll in the program, you’ll open an FDIC-insured, special purpose account. Instead of continuing to make your minimum monthly payments toward your debts, you’ll fund this account each month. The amount you deposit will be based on the budget created in your initial consultation, taking into account the size of your debt, your monthly income, and your other expenses.

Funding this account instead of paying your debts serves two purposes:

• Creditors may be more likely to negotiate for a lower settlement amount when your accounts are delinquent.
• You’ll use the money accrued in the account to pay the debt balances if Pacific Debt Relief successfully negotiates them. (Account funds are also used to cover PDR’s fees.)

3. Wait for settlement offers

Pacific Debt Relief will negotiate with creditors and debt collectors on your behalf in order to reach a settlement amount that is less than what you owe.

If Pacific Debt Relief has successfully negotiated a debt settlement, your debt specialist will present the terms to you. It’s up to you to approve or reject it. Note that it can take many months or years to receive an offer, during which time you’ll continue to pay into the special purpose account. Since you won’t be paying creditors during this time, you may be subject to collection calls and other tactics to encourage payment.  

4. Settle

If you agree to a settlement, you’ll use the funds from your account to pay off the settled amount and Pacific Debt Relief’s fees. Fees vary by state and total debt enrolled, but you’ll generally pay Pacific Debt Relief between 15% and 25% of the enrolled debt. You’ll only pay once you agree to a settlement.

For instance, if you enrolled $15,000 in debts and Pacific Debt Relief negotiated the entirety of it down to $7,500:

• You would pay the creditor $7,500 from the account to settle the debt.
• You would pay Pacific Debt Relief between $2,250 and $3,750, or 15% to 25% of the $15,000 in enrolled debt.

5. Repeat until completion

Pacific Debt Relief can negotiate multiple debts if you enroll more than one. You may continue to review settlement offers if Pacific secures them. The program ends once you’ve paid your last settled debt.

Note that there’s no guarantee that creditors will agree to settle. If Pacific Debt Relief is unsuccessful in negotiating any of the debts, you’ll have to find another option to repay what you owe.

Who is Pacific Debt Relief best for?

• People who can’t afford minimum payments: Debt relief should be a last resort after a debt management plan, debt consolidation loan, and balance transfer credit card. But if a financial hardship has left you unable to afford your monthly minimum payments on all your debts, Pacific Debt Relief may be a viable option.
• People with large amounts of unsecured debt: Pacific Debt Relief requires a minimum of $10,000 in unsecured debt to enroll. If you have a significant amount of unsecured debt, such as credit cards, medical bills, and some student loans, Pacific Debt Relief could help reduce what you owe.

Who is Pacific Debt Relief not best for?

Pacific Debt Relief isn’t right for everyone. Consider an alternative if:

• You have less than $10,000 in unsecured debts
• Your debts are secured, such as a mortgage or car loan
• You need help with IRS tax debt or debts resulting from lawsuits
• You live in Oregon (Pacific Debt Relief operates in all other states, plus Washington, D.C.)
• You want to try a solution that would cause less damage to your credit score

How to qualify for Pacific Debt Relief

Not everyone is eligible for Pacific Debt Relief’s program. Here are some basic eligibility criteria:

• Live in the right place: Pacific Debt Relief currently operates in Washington, D.C., and all states but Oregon. Some other states’ regulations may prohibit PDR from offering its services directly; in those cases, Pacific Debt Relief can refer you to a debt relief provider or legal firm.
• Have enough debt: To qualify for Pacific Debt Relief, you must enroll at least $10,000 in unsecured debt.
• Have the right kind of debt: Pacific Debt Relief can help with unsecured debts, including credit cards, medical bills, personal loans, payday loans, collections and repossessions, business debts, and even some student loans. Other types of debt, such as home loans, auto loans, tax debt, and debt from lawsuits, are ineligible.

Fees

Like other debt settlement companies, Pacific Debt Relief doesn’t charge fees upfront. You pay only if the company successfully negotiates your debt down and you approve the settlement.

Generally, Pacific Debt Relief’s fees range from 15% to 25% of your enrolled debt, but the exact percentage depends on the total debt you enroll and where you live.

Remember this important distinction: The fee is a percentage of your enrolled debt, not your settled debt. For instance, if you enrolled $20,000 in debt and it was settled for $10,000, you would pay between 15% and 25% of the enrolled $20,000 (that’s $3,000 to $5,000), not the settled $10,000. However, if Pacific settles only a portion of your enrolled debt, your fee would be based on the amount of enrolled debt that was settled. 

Note: While Pacific Debt Relief says fees generally range from 15% to 25%, the fine print on its homepage acknowledges that, with a 50% reduction in your enrolled debt, you may still end up paying up to 85% of the total enrolled debt when you factor in fees. Call and speak to a debt specialist for exact pricing.

Other fees

Pacific Debt Relief’s website includes no pricing information on the setup and ongoing maintenance of the FDIC-insured, special purpose account. After contacting PDR, Credible learned the account has a one-time $10 setup fee and a $10 monthly maintenance fee.

Alternatives to Pacific Debt Relief

Before choosing debt settlement, which can significantly damage your credit score and offers no guarantee of success, consider the alternatives:

Debt management with a credit counselor

Working with a nonprofit credit counselor may be a better fit if you want help managing your debt without risking major damage to your credit score. A counselor can review your finances and set up a debt management plan (DMP). With a DMP, credit counselors work with your creditors to lower your monthly payment by negotiating for extended loan terms or lower rates. A DMP doesn’t reduce the amount you owe, but it creates a structured path to paying off your debts.

Debt consolidation loan

A debt consolidation loan could make sense if you can keep up with debt payments but want to simplify your finances or get a lower interest rate.

When you take out a debt consolidation loan, you use the funds to pay off existing debts; then, you make a single monthly loan payment, ideally with a lower rate and/or for a smaller amount. Some lenders can send the debt consolidation funds directly to your creditors, sometimes with a rate discount.

Debt consolidation is a common use for personal loans, but you may also be able to use home equity (if you’re a homeowner with sufficient equity) to consolidate your debts with a home equity loan or home equity line of credit (HELOC).

Balance transfer credit card

If you have good enough credit to qualify, a balance transfer credit card can provide a temporary break from interest charges. You’ll pay a fee to transfer debt (typically 3% to 5% of the amount transferred) from high-interest accounts to the new credit card.

Balance transfer cards typically offer a 0% introductory APR for a limited period (often 12 to 18 months), which gives you an extended period to pay down your debts before interest starts accruing again.

Be careful, though: Once the intro period ends, the card's standard APR goes into effect, which can lead to a rapidly growing balance if you haven’t paid much of it down.

Bankruptcy

If your situation is severe enough that you can’t afford the monthly deposits required for Pacific Debt Relief’s program, you may want to consider bankruptcy. Chapter 7 bankruptcy can discharge eligible unsecured debts in roughly three to four months; Chapter 13 bankruptcy structures the repayment of eligible debts through a court-approved plan lasting three to five years. Once the plan is complete, remaining eligible debts that were enrolled in the plan are discharged.

Think carefully before taking this route. Bankruptcy has a major, long-term impact on your credit: Chapter 7 and 13 bankruptcies can remain on your credit report for up to 10 and seven years, respectively. But filing provides legal protection from collection efforts and can enable you to better afford expenses that can’t be discharged.

Other debt relief companies

Pacific Debt Relief isn’t your only option. Compare it against a few other major debt relief companies, including:

Also, read Pacific Debt Relief reviews from customers on third-party sites, and compare those to competitor reviews. Customer service and trustworthy business practices are crucial in financial services.

Pacific Debt Relief company details and history

Headquartered in San Diego, Pacific Debt Relief was founded in 2002 as Pacific Debt Inc. It rebranded to Pacific Debt Relief in 2021. Pacific Debt Relief is accredited by the Better Business Bureau (with an A+ rating) and the Consumer Debt Relief Initiative (CDRI). The company has helped clients settle more than $500 million in debt.

Contact information

Pacific Debt Relief offers multiple ways to contact customer service, depending on whether you’re already a client or are hoping to learn more. There’s also a general contact form you can access online.

Currently enrolled clients

Pacific Debt Relief’s enrolled clients can contact a representative during normal business hours:

• Monday through Thursday, 5 a.m. to 5 p.m. PT
• Friday: 6 a.m. to 3 p.m. PT

There are a few ways to contact Pacific Debt Relief as a client:

• Phone: (877) 722-3328
• Fax: (619) 238-6709
• Email: [email protected]

Non-clients

If you’re considering Pacific Debt Relief and want to learn more, you can reach out during the following business hours:

• Monday to Thursday: 6 a.m. to 7 p.m. PT
• Friday: 6 a.m. to 4:30 p.m. PT
• Saturday: 7:30 a.m. to 4:30 p.m. PT

Pacific Debt Relief has separate communication options for non-clients:

• Phone: (888) 533-6231
• Fax: (619) 238-6709
• Email: [email protected]