American Debt Relief uses a process known as debt settlement to help consumers erase debt after paying a fraction of what they owe. After talking with a debt consultant during a free debt assessment, customers are asked to begin saving a set amount of money in a dedicated savings account each month. Once the required savings threshold is reached, American Debt Relief will use the funds to help settle debts for less than the amount currently owed.
Interestingly, this company also claims to help settle debts through what they call a "bulk negotiation program." This program is based on their relationships with major creditor networks, and it allows them to submit your accounts for settlement through various partnerships.
Either way, American Debt Relief does not charge any fees upfront, and you'll only pay a percentage-based fee as each of your debts is settled. In the end, they claim their process can help you get out of debt in 25 to 48 months, versus the decades you might otherwise spend paying off high-interest credit card debt.
Debt settlement only works if you stop making payments on credit cards and other bills. This means you'll begin racking up more interest and fees on your debts as you work through your program, and all while late payments cause damage to your credit score.
Pros Explained
- Client dashboard lets you oversee your program and track your progress in real time: Not all debt relief companies offer a client dashboard, yet American Debt Relief does. This dashboard helps you gain a visual perspective of your program and track your debt settlement progress as it happens.
- Has received nearly flawless user reviews: American Debt Relief has high user reviews on third party sites.
- Get started with a free debt consultation: A free debt assessment can help you determine if debt settlement is right for you, as well as how your specific program might work.
- No upfront fees required—only pay a performance-based fee as each debt is settled: While American Debt Relief doesn't disclose their fee percentage, they only charge fees based on performance, and only as each debt is settled.
Cons Explained
- Does not disclose their fee amount upfront: Many debt settlement companies have clear listings of fees on their website, yet American Debt Relief does not advertise this information online.
- Only available in 44 States: American Debt Relief is not available in all states.
Types of Debt Addressed
American Debt Relief talks mostly about credit card debt on their website, yet debt settlement can work for any type of unsecured debt. This includes any type of loan or line of credit that is not secured by collateral. The main types of unsecured debt American Debt Relief addresses are explained below:
Credit Card Debt
Credit card debt can be especially problematic due to the high interest rates credit cards charge. After you stop making payments and enroll in a debt settlement plan with American Debt Relief, you'll have the chance to build a dedicated savings account you can use to settle credit card debt for a percentage of what you owe.
Medical Bills
You may also use this company to help settle medical debt, whether that includes hospital bills, doctor bills, or past due amounts from other medical providers. American Debt Relief can help you settle these debts for less, and over a faster timeline.
Personal Loans
Unsecured personal loans can also qualify for debt settlement. This includes personal loans from banks, credit unions, or online lenders, as well as payday loans.
Don't forget that debt settlement does not work for secured debts like a mortgage on your home or an auto loan. If you're having trouble making payments on secured debts, debt settlement is not the answer.
Client Onboarding
American Debt Relief does not list a minimum amount of debt you need to become a client. However, they do state you must have a "bona fide financial hardship," and that you'll have to prove you are behind on your bills and unable to keep up.
If you decide to pursue a debt settlement program with American Debt Relief, you'll begin the process with a free debt assessment. During this phone call, a Debt Resolution Specialist will talk over your situation with you and explain your next best steps. You can decide if debt settlement is for you during this call; there's no obligation.
From there, clients are set up with a specific monthly savings goal, as well as a debt settlement plan that can help them pay off debt in 25 to 48 months.
Don't forget you can bundle more than one type of unsecured debt into a debt settlement plan. For example, you can use debt settlement to pay off credit card bills, past due medical bills, payday loan debt, and more.
Customer Service
Since American Debt Relief has a staff of Debt Resolution Specialists who are trained in debt settlement and debt collection rules and regulations, customers can count on getting professional help. Not only will you receive a tailored debt settlement plan from the company, but you can ask questions and get answers from a professional.
While American Debt Relief doesn't offer a mobile app or an online chat feature, they do have a client dashboard that helps them stand out. You can also contact the company over the phone most days of the week. Specifically, phone customer service is available Monday through Friday from 7 a.m. to 11 p.m. CST, then Saturday from 8:00 a.m. to 8:00 p.m. CST.
Company Reputation
Unfortunately, the debt relief industry is known for having a lot of shady players. For that reason, the Federal Trade Commission (FTC) has shared multiple warnings and debt relief and credit repair scams over the years.
There are many ways to research companies before you sign up for a debt settlement plan. You can check for open cases with the FTC for starters, but you can also search the Consumer Financial Protection Bureau (CFPB) database for complaints.
Note that American Debt Relief is certified with the International Association of Professional Debt Arbitrators (IAPDA) and accredited by the American Fair Credit Council (AFCC).
If you have a complaint about the services of a debt relief company, you can file a complaint with the FTC or call 877-FTC-HELP.
Average Relief Amount
Fine print on the American Debt Relief website says you may be able to save 55% when you settle your debts, although your net savings may be as low as 30% after you pay the company's required debt settlement fees.
Average Time for Relief
American Debt Relief claims their program will take you 25 to 36 months to complete, yet the fine print on their website explains it could take up to 48 months for all your debts to be settled. The length of your program will vary depending on your situation, including how much debt you have, how much you can save each month, and other factors.
Cost
American Debt Relief doesn't directly disclose their fees on their website like many of their competitors do. However, our research shows that their fees range from 15%-25%.
From the American Debt Relief website:
"Clients who are able to 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. All claims above are based on enrolled debts. Not all debts are eligible for enrollment."
Generally speaking, this puts their fee percentage at the high end of the industry average of 15% to 25%.
The Competition
| American Debt Relief | National Debt Relief | |
|---|---|---|
| Year Founded | 2012 | 2009 |
| Accreditation | Accredited by the American Fair Credit Council (AFCC) Accredited by the International Association of Professional Debt Arbitrators (IAPDA) | Accredited by the American Fair Credit Council (AFCC) Accredited by the International Association of Professional Debt Arbitrators (IAPDA) |
| Services Offered | Debt settlement | Debt settlement |
| Customer Service Touchpoints | Free consultation Phone customer service Online client portal | Free consultation Phone and email customer service Online client portal |
| Fee | No upfront fees Fees not disclosed (fine print implies 25%) | No upfront fees Pay 15% to 25% of your debt |
| Average Program Time | 24 to 48 months | 24 to 48 months |
If you're considering debt settlement, you probably already know that quite a few reputable companies offer services in this space. With that in mind, you'll want to take the time to compare at least three different companies based on their reputation, fees, process, and other important factors before you move forward.
You may want to consider National Debt Relief, which offers similar services as American Debt Relief. Both companies have also been around for a similar timeline and both offer a client portal that lets you keep track of your program online.
However, National Debt Relief stands out for a few reasons, including the fact they more openly disclose their fee range. American Debt Relief doesn't disclose their fees online, but the fine print on their website seems to imply you'll pay 25% of your settled debts, which is at the high end of this range.
Also note that National Debt Relief has good reviews with third-party sites. We feel that National Debt Relief is the clear winner in this case.
Verdict
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.
Just remember to research companies thoroughly and compare at least three different debt relief firms before you decide. After all, some debt relief companies may offer more services, more transparency, and a better user experience.
Methodology
Investopedia compared more than 15 top debt relief companies to find the best in terms of stability (5%), reputation and customer satisfaction (10%), customer experience (7%), services (30%), and cost and fees (48%). We considered whether companies had a membership with theAmerican Fair Credit Council, as well as how long they have been in business. We reviewed the types of services offered, like counseling, debt settlement, tax relief, and more. We also compared companies' money-back guarantees, upfront fees, fee percentage closed, and cancellation policies. For more about how we rate, review, and select the best debt relief companies,read our full methodology.
