PROS / This service is accredited with both the IAPDA and the AFCC.
CONS / This service has an average reduction of 29 percent, well below what other services offer.
VERDICT / With figures that are less impressive than those of the average debt settlement company, you can likely find a better choice that saves you more and costs you less.
Debtmerica specializes in debt settlement and offers its debt relief service as an alternative to credit counseling or debt consolidation. You must have at least $10,000 in qualified, unsecured debt, including unsecured loans, credit cards and medical bills. Once you enroll with this debt settlement company and begin your program, the service begins negotiation with your creditors.
The average period for a debt settlement program with Debtmerica is between 24 and 48 months. While the company negotiates with your creditors, you put funds away into an FDIC-insured trust fund each month. Debt settlement companies cannot legally charge advanced fees, but once a settlement is reached, the money in your trust fund goes to pay off your settled debt in one lump sum as well as to pay settlement fees to Debtmerica. While you're putting money into your fund, you are still responsible for your debt with your creditors. If you stop making payments to your creditors, you are responsible for late fees, disconnections, interest and accounts sent to collections. You can also expect calls from debt collectors. Some debt companies may claim to reduce calls from collectors; however, this is often not possible.
On average, this service settles around 50 percent of your total debt and charges between 20 and 24 percent of your enrolled debt. The reduction from which you benefit is around 29 percent. If, for example, you enrolled $10,000 in debt, you pay back around $7,000, which is not as high of savings as you may see with other services. It is important to keep in mind that your creditors are not obligated to participate in debt negotiation and can refuse to settle or grant credit debt relief.
While not all of the figures are as impressive, this service has an excellent score with business-rating services and is IAPDA and AFCC accredited, so the company's reputation is solid.
Debtmerica has a solid reputation and encouraging accreditations in the debt settlement world. However, with only a 29 percent debt reduction and the potential of paying 24 percent of your enrolled debt in fees, its figures are not as impressive as other services' figures are.