Potentially save up to 30% on debts of $10,000 or more.
Pacific Debt Inc. (PDI) may be able to help if you’re facing bankruptcy due to a large amount of debt. You can sign up for a free consultation, and it doesn’t charge any upfront fees. But pushy staff and relatively low savings may make you want to look elsewhere.
Reside in a state where PDI’s services are available
Have at least $10,000 of debt to enroll
Pacific Debt Inc. details
Free consultation. Speak to a rep online or by phone.
Costs. 15%–25% of total debt enrolled. Fees vary by state of residence..
Types of debt accepted. Unsecured debt — excluding payday loans, legal judgments, consumer finance loans and medical debts not in collections.
Services offered. Debt settlement.
Minimum debt considered. Typically $10,000.
Typical turnaround. 24–48 months — sometimes longer.
Accreditations. American Fair Credit Council, International Association of Professional Debt Arbitrators, Consumer Affairs, Better Business Bureau.
Ratings. A+ BBB rating, 9.3 on Trustpilot.
Negotiations type. Direct negotiations.
Service limitations. Not licensed in Colorado, Connecticut, Delaware, Georgia, Hawaii, Illinois, Kansas, Kentucky, Louisiana, Maine, Mississippi, Nevada, New Hampshire, New Jersey, North Dakota, Ohio, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Washington, West Virginia, Wisconsin or Wyoming.
Free resources or tools. Debt management blog.
Customer service. Phone and email.
How much does it cost?
Pacific Debt Inc. typically charges a fee of 15% to 25% of your enrolled debt at the time of settlement — not at the time you sign up — which is standard.
You’ll pay nothing up front. Instead, the fee is factored into your monthly payments, so it’s not something you need to prepare to pay all at once.
How does this look in real life? Say you signed up for a three-year program to settle $15,000 in credit card debt at an APR of 14%. By the time your debt is ready to be settled, it could have increased to $22,773.99 depending on when your debts are settled — it typically doesn’t all happen at once. In this scenario, a typical client would pay between $3,416 and $5,693.50 in fees.
How much could I save with Pacific Debt Inc.?
Its most recent settlements range from 20% to 50%, though it has settled as much as 70% in the past. The average is roughly 50% before fees — so between 15% and 35% after.
What are the benefits and drawbacks of Pacific Debt Inc. debt relief?
No upfront fees. PDI doesn’t charge fees until after it delivers on its services.
Free consultation. Speak to a specialist to find out if your debt qualifies for PDI’s services or for direction toward other options.
Track your progress online. Easily access your settlement account to keep track of how much you’re saving.
Low savings. You could end up saving only 15% of your debts — which might not be worth it to you.
Pushy staff. More than a handful of customers complain that staff tried to rush them into decisions they didn’t fully understand.
Not available in all states. PDI’s services are available in 25 states only. It says that’s due to state regulation, but most debt relief companies service more than half the country.
Debt relief companies typically charge a percentage of a customer’s debt or a monthly program fee for their services. And they aren’t always transparent about these costs or drawbacks that can negatively affect your credit score. You might pay other fees for third-party settlement services or setting up new accounts, which can leave you in a worse situation than when you signed up.
Consider alternatives before signing up with a debt relief company:
Payment extensions. Companies you owe may be willing to extend your payment due date or put you on a longer payment plan if you ask.
Nonprofit credit counseling. Look for free debt-management help from nonprofit organizations like the National Foundation for Credit Counseling.
Debt settlement. If you can manage to pay a portion of the bill, offer the collection agency a one-time payment as a settlement. Collection agencies are often willing to accept a lower payment on your debt to close the account.
What exactly is Pacific Debt Inc.?
Pacific Debt Inc. is a pioneering debt settlement company. It was founded in 2002, after a spike in credit card debt across the US spawned the need for solutions to debt outside of consolidation or bankruptcy.
PDI works like most other debt relief companies: It negotiates with your creditors to reduce what you owe in exchange for paying it off with one payment. Its industry accreditations and customer reviews are promising, as is its track record.
What does the Internet say about Pacific Debt Inc.?
Pacific Debt Inc. garners mostly positive online reviews as of December 2018. It’s been accredited with the Better Business Bureau since 2010 and earns an A+ rating. It doesn’t have any complaints filed against it and averages 5 out of 5 stars based on nearly 40 customer reviews. It does similarly well on Trustpilot, earning an average score of 9.3 out of 10 based on feedback from over 500 customers.
Many customers describe PDI staff as “attentive” and “helpful,” though some felt that they were rushed into signing a contract they didn’t understand. Others had negative experiences with undertrained staff who relied on scripts, rather than personalized conversations, and weren’t quick to jump on mistakes.
Is it safe to use Pacific Debt Inc.?
In general, yes. Pacific Debt Inc. uses SSL security to encrypt sensitive information like your credit card or Social Security number. It stores your details on a secure server protected by a firewall. And while PDI might share nonsensitive information with affiliates, it offers you the choice to opt out.
It’s also legit: Pacific Debt Inc. is accredited with the American Fair Credit Council and the International Association of Professional Debt Arbitrators, both of which set and regulate industry standards. It’s also been accredited with the BBB since 2010 and with Consumer Affairs, meaning that it meets transparency standards and has pledged to rectify customer complaints.
How do I sign up?
You can get sign up for a free consultation with a Pacific Debt Inc. representative either online or by calling 800-909-9893. Follow these steps to apply online:
Go to the Pacific Debt Inc. website and click Free Consultation.
Select how much debt you have and click See Savings.
Select how many days you’re behind on your payments.
Select which state you live in.
Enter your contact information and click Submit.
You should receive a phone call from a PDI representative to discuss your situation and go over your options. If you qualify, a debt specialist emails you an enrollment packet. Complete your forms to enroll in PDI’s program.
I’ve signed up. What happens next?
After you enroll in Pacific Debt Inc.’s debt settlement program, you can expect to go through the following steps:
Get a welcome call from Pacific Debt Inc. A PDI client care member will call to make sure you understand how the program works and answer any questions you might have.
Speak with client care every few weeks. You’ll receive calls to check in on your progress and guide you through the initial process of setting up an FDIC-insured account, where you make monthly deposits that go toward paying for the settlement.
Stop making payments to creditors. Once you begin depositing money toward your debt settlement, stop making payments on your debt to your creditors.
Get assigned a personal account manager. After a few months of deposits into your account, PDI assigns you a personal account manager, who guides you through the rest of the process and negotiates on your behalf.
Authorize PDI to pay settlements. Each time your personal account manager settles a debt, PDI requires your authorization to access your funds to pay off your debts.
4 tips to make the most of Pacific Debt Inc.
Here are a few pointers to ensure your debt settlement program works to your benefit:
Don’t skip monthly deposits. The longer it takes you to set up for settlement, the more your interest increases — and the more you end up paying. Taking a long time to settle your debts also puts you at greater risk of being sued by your creditors.
Don’t take on more debt. If you’re in the position to settle your debts — a pretty dramatic step — you likely can’t afford to take on more.
Keep on top of your account. Contact customer service or your account manager if you notice anything off with your account — or even something that you just don’t understand. And make sure they’re aware of any changes to your financial situation, for better or for worse.
Pacific Debt Inc. is your standard debt relief company. But it might not save you as much money as the competition. And it has a smaller reach and more restrictions on the types of debt that qualify.
If you save more than $600 through debt settlement, the IRS considers those savings taxable income. You may not have to pay taxes, however, if you’re insolvent at the time of your debt settlement — meaning that your liabilities are worth more than your assets.
Talk with a tax professional to determine how debt relief will affect you specifically.
Yes, at least at first. But once you recover from the initial dip, it can actually help you improve your credit score in the long run. That’s because you won’t have as much unmanageable debt to pay off. Still, settled debt remains on your credit history and can potentially scare off future lenders.
No. With debt consolidation, you apply for a loan — often at a lower interest rate — that you use to pay off all of your debts. Debt consolidation loans make repayments easier and can help you save on interest, but the amount you owe doesn’t change.
With debt settlement, you or a company like Pacific Debt Inc. strikes a deal with your creditors to reduce the amount of debt you owe, which is then paid off with one payment.
Anna Serio is a trusted loans expert who's published more than 800 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like CNBC, Business Insider and The Simple Dollar feature her professional commentary, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.
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