Did American Debt Relief recently reach out to you about their “federally regulated debt relief program” that could reduce your debts by up to 50%? We’ve attached a similar mailer below for reference.
If so, I’m sure this sounds too good to be true. However, to get to the bottom of this, we researched the company and their business practices to see if what they claim is actually legitimate. If you would like to learn more about this, continue reading below.
My name is Ben, and I have spent the last five years helping people understand the differences in options to help them eliminate debt cheaper, easier, and faster. I have also uncovered debt consolidation scams. I was also one of the first to write an article covering the unfortunate Litigation Practice Group bankruptcy and have spoken with countless people negatively affected by it.
“Your Debt Relief Pal” was created to help protect you from any debt company that may have deceptive marketing and provide you with realistic estimates of your options for debt freedom.
What is American Debt Relief?
American Debt Relief History
From what we discovered online, American Debt Relief is a company that has been around since 7/11/2012. Their flagship product seems to be a debt relief/debt settlement program in which the company will “negotiate with your creditors to reduce your debt to a fraction of what you owe. With just one low monthly program commitment, you can simplify your life and get your finances back on track.”
After further digging, we found that the company operates at least two websites: https://www.americandebtrelief.com/ and https://myadrplan.com/. The former seems to be the company’s main website which includes several pages as well as a client login portal. This website was registered on 06/07/2001, meaning the domain has been around for much longer than the company itself. The other website, however, seems to be a simpler website whose main purpose is to be used as a landing page for individuals receiving the aforementioned mailer. This seems to be backed up by the website’s newer registration date of 06/20/2023.
In the fine print at the bottom of the https://www.americandebtrelief.com/ website, we notice that the company states: “Where applicable, American Debt Relief will refer you to a highly qualified service provider who can provide debt relief services you need”. This is somewhat contrary to what was advertised on the mailer, as they make it seem that American Debt Relief will be the one performing the debt relief program. Therefore, this new information might lead us to believe that American Debt Relief also acts as a marketing agent to other debt relief companies if they cannot serve certain customers.
We also gain insight into the fee structure in the same part of the website. Here, they write, ” Clients who can remain with the program and resolve all their debt realize approximate savings of 55% before fees, or 30% including our fees, in 24 to 48 months”. Using this sentence, we can see that American Debt Relief charges ~25% of their client’s total debt as a fee. This means clients can typically expect to save ~30% of their total debt. This is somewhat misleading as their mailer does not mention fees and simply states that individuals might be able to expect half of their credit card balance to be forgiven.
Important Distinction: What is a debt relief/consolidation program?
After giving you some insight into American Debt Relief’s background, we’d now like to explain exactly what a debt relief or debt consolidation program is (both terms are synonymous).
Essentially, a debt relief program is one where you allow your unsecured debts, such as credit card debt, to fall behind. Doing this allows you to build up leverage against your creditors since it leads them to believe you will default on your debts. After doing so, the debt consolidation company will reach out to your individual creditors on your behalf to help you settle the debt, typically at ~50% of their total value. During this process, the debt relief company will also take a fee of around 15-25% of your debt’s total value. In the end, if everything is successful, you’ll hopefully be able to save anywhere from 25-35% of your total debt’s value.
However, if you use this method, it is crucial to understand what hidden fees, monthly payments, closing costs, etc., are included in your program. That’s why it’s so important to choose a trustworthy, transparent company throughout the process. It’s also important to know how Debt Relief Companies work in order to understand what you could be signing up for.
Check Your Rate and Compare Options!
You may be looking for a debt consolidation loan, but do you qualify? Is your credit score good enough? Is your debt-to-income ratio or credit utilization good enough?
I helped build this free consolidation loan and other options calculator to help you compare your rates across multiple debt consolidation lenders and your options to other options if you cannot qualify for a loan. It’s specific to your financial information, so if you have $10,000 in debt, it will estimate your situation.
You can then check your rate, which will NOT affect your credit score.
American Debt Relief Reviews
Now that you’ve gained some insight into the company, its products, and business practices, we’d like to highlight reviews that we’ve found across the web. Hopefully, seeing other people’s input will allow you to make a better-informed decision yourself.
Investopedia
The first review we stumbled upon was actually an entire article written by Investopedia, a financial literacy website. Here, they go into detail about the company’s pros and cons, what a typical client onboarding might look like, and their ultimate verdict.
In short, the review states that “American Debt Relief is worth considering if you’re struggling under the weight of credit card debt and other unsecured debts. After all, this company offers a free debt assessment that can help you decide if debt settlement is for you, and you won’t be asked to pay any upfront fees for their services.” However, they also point out that their fee is on the higher end of the spectrum and that this fee is also not visibly posted for viewers to see.
We highly recommend that you take the time to read this article, as it will offer a more comprehensive understanding of what you might be getting into. At the end of the day, having more viewpoints will always allow you to make a more informed decision based on your situation.
BBB
Next, we checked the ratings from the Better Business Bureau. Here, we can see that the company is not BBB accredited and has a 2.25/5 rating after 20 reviews. Furthermore, the company has received 19 complaints that were closed in the last 3 years and 11 complaints in the last 12 months.
To delve a little deeper into these reviews, we’ve highlighted a few below that we feel are representative of peoples’ sentiments on American Debt Relief.
One individual mentions that American Debt Relief helped them cut their monthly payments in half, ultimately allowing them to save money and get out of debt after a few years.
However, another individual brings up that the company handled their contract “unprofessionally and unethically”, resulting in a lawsuit being filed against them. If true, this is quite an unfortunate reality. It should be noted that debt relief programs can bring this risk if not handled properly. Part of the requirement for debt relief is that the individual must fall behind on their debts in order to create leverage against the creditors. During this time, litigious creditors might sue the debtor if their debt relief company does not take the necessary steps to ensure this does not happen.
This once again highlights the importance of choosing the right company that will make sure a negative event like this does not happen if you enter a debt relief program with them.
Lastly, we check American Debt Relief’s Google Business page for reviews. Here, we found that the company has a 4.2/5 rating with a total of 464 reviews. Below are a few that we have highlighted.
Just as we mentioned earlier in this article, the website’s poor design misled the top reviewer into believing that there was no fee at all. Furthermore, the individual states that “nowhere in the contract is there a reference to the fee structure”, despite being told otherwise by a representative. This once again underscores the importance of understanding these different programs and making sure you know the associated costs and fees.
Despite this negative review, the majority of the reviews for American Debt Relief are in fact positive like the second one we attached. Many people mention that the company was able to help them reduce their credit card debt and stop collection agencies from calling their phone.
Closing Thoughts
From the research that we conducted, we can reasonably conclude that American Debt Relief offers debt relief programs to help individuals settle their unsecured debts and lower their total payment amounts.
However, we must also bring up that the company does have some negative reviews and it seems like their fee structure is not as transparent as we’d like it to be. It also seems like the company may try to pitch you to another company if you’re not able to work with them for whatever reason.
Due to these factors, we highly suggest that you continue to research this company on your own as well as look at other options. By doing so, you’ll hopefully be able to form a well-rounded opinion and stay aware from any shady or untrustworthy businesses.
Leave a Reply