Accredited Debt Relief Reviews: Worth It or Waste of Money?

Accredited Debt Relief helps you negotiate with creditors for less money. But their debt settlement programs come with serious drawbacks.

You might not benefit if you have decent credit. Or if you owe less than $10,000 in unsecured debt. Or if you can’t afford their fees.

The good news? You can do most of what they offer yourself. Our partner Cambridge Credit Counseling provides guidance without the high price tag.

Accredited Debt Relief is legitimate. They offer debt resolution, consolidation loans, and credit counseling. But as a for-profit company, they face challenges.

Some creditors refuse to work with them. And they only operate in certain states. These limitations block many consumers from accessing their services.

Customer Reviews Tell a Mixed Story

Some customers praise Accredited Debt Relief. They appreciate quick responses and friendly service. The debt specialists seem knowledgeable and helpful.

But negative reviews reveal serious problems. Consumer Financial Protection Bureau complaint 3547272 tells a troubling story.

One consumer claims the company made their debt worse. High fees depleted their savings account. No money remained to pay creditors.

These complaints happen frequently. Many consumers enter debt settlement without understanding the risks.

What You Must Know Before Hiring Accredited Debt Relief

Negotiating lower prices isn’t complicated. Debt settlement companies make it seem harder than it is.

You tell creditors what you can afford. They tell you what you owe. You work toward a compromise.

You don’t need professional training. You need three things: understanding your finances, basic negotiation skills, and determination.

So why do consumers hire debt settlement specialists? Advertising works.

Debt relief companies position themselves as your only option. Desperate consumers, drowning in bills, believe them.

The Services Cost Too Much

Accredited Debt Relief charges 15-25% of your enrolled debt. With a $10,000 minimum, you’ll pay $1,500 to $2,500 minimum.

No wonder creditors hesitate to work with them. Think about their perspective.

Why would you claim you can’t pay while spending thousands on settlement services? The math doesn’t add up.

Even successful negotiations cost more than settling yourself. And you might owe taxes on forgiven amounts.

Your Credit Score Takes a Major Hit

Debt settlement destroys credit scores. Accredited Debt Relief asks you to stop paying creditors. Instead, you save money in a dedicated account.

The strategy makes sense initially. Build a lump sum, then make an offer.

But every missed payment damages your credit report. Payment history significantly impacts your credit score.

By the time you resolve all accounts, your score plummets. Creditors report “settled” instead of “paid.” That hurts too.

Rebuilding your credit can take years. You’ll face higher interest rates on future loans.

What Happens When Creditors Say No?

Imagine this scenario. You follow Accredited Debt Relief’s plan faithfully. You make monthly savings deposits. Three accounts get settled successfully.

Then the remaining creditors refuse your offers. Where does that leave you?

You’re worse off than before. Your balances grew with late fees and penalties. Your credit score is shredded.

Creditors might sue you. You’ll need to renegotiate payment plans alone. The CFPB warns about additional risks with debt settlement companies.

Debt feels overwhelming. But don’t make your situation worse with expensive settlement services. Our partner Cambridge Credit Counseling offers affordable alternatives that protect your interests.

Better Alternatives to Accredited Debt Relief

You have options beyond expensive debt settlement companies. Consider these alternatives first.

Negotiate Directly With Creditors

Call your creditors before accounts go to collections. Many offer hardship programs with reduced payments.

You avoid settlement company fees. You maintain control over negotiations. Your credit takes less damage.

Consider Credit Counseling

Credit counseling agencies create debt management plans. They negotiate lower interest rates with creditors.

You make one monthly payment. The agency distributes funds to creditors. Fees are typically much lower than settlement companies.

Our partner Cambridge Credit Counseling specializes in affordable debt management plans.

Explore Debt Consolidation

Debt consolidation loans combine multiple debts into one payment. You might qualify for lower interest rates.

Your credit score affects loan terms. Shop around for the best rates. Avoid taking on new debt while consolidating.

When Debt Settlement Makes Sense

Debt settlement isn’t always wrong. Some situations warrant this approach.

You might consider settlement if you face imminent legal action. Or if your debt already went to collections.

Settlement works best when you have lump sum cash available. Creditors prefer one-time payments over installment plans.

But try negotiating yourself first. You’ll save thousands in fees. Use those savings to pay down more debt.

How to Negotiate Debt Settlement Yourself

Ready to negotiate without expensive help? Follow these steps.

Step 1: Assess Your Financial Situation

Calculate your total debt. List all creditors and amounts owed. Determine how much you can afford monthly.

Be realistic. Don’t commit to payments you can’t sustain. Build a small emergency fund first.

Step 2: Prioritize Your Debts

Focus on debts with legal consequences first. Secured debts like mortgages and car loans take priority.

Then address debts in collections. Finally, tackle remaining unsecured debts. Prioritization helps you avoid lawsuits.

Step 3: Contact Your Creditors

Call creditors during business hours. Ask to speak with someone about hardship options. Explain your situation honestly.

Don’t overshare personal details. Stick to facts about your financial hardship. Request specific payment reductions.

Step 4: Make Your Offer

Start low but reasonable. Offer 30-50% for accounts in collections. Original creditors typically expect 50-75% of the balance.

Emphasize your willingness to pay immediately. Lump sum settlements get better results. Propose a realistic payment plan if needed.

Step 5: Get Everything in Writing

Never pay without written confirmation. Request a settlement letter before sending money. The letter should specify the settlement amount and terms.

Keep copies of all correspondence. Save payment receipts. These documents protect you from future disputes.

Understanding Different Debt Types

Not all debts settle the same way. Know what you’re dealing with.

Credit Card Debt

Credit card companies often accept settlements. They’d rather receive partial payment than nothing. Start negotiations at 40-50% of the balance.

Medical Bills

Hospitals and medical providers frequently negotiate. Many offer payment plans or reduced fees. Ask about financial assistance programs.

Personal Loans

Personal loan settlements vary by lender. Original lenders resist settlements more than collection agencies. Be prepared for tougher negotiations.

Student Loans

Federal student loans rarely settle. They offer income-driven repayment plans instead. Private student loans might negotiate in extreme hardship cases.

Red Flags to Avoid

Watch for warning signs when considering any debt relief service.

Avoid companies requiring upfront fees. Legitimate services charge after settling debts. Upfront fees often indicate scams.

Run from guarantees of specific results. No company can promise creditors will accept offers. Realistic expectations matter.

Skip services pressuring immediate decisions. You need time to research options. Pressure tactics suggest questionable practices.

Ignore advice to stop communicating with creditors. You should maintain contact throughout the process. Cutting off communication makes situations worse.

Protecting Your Rights During Debt Collection

Federal law protects you from abusive collection practices. Know your rights under the Fair Debt Collection Practices Act.

Collectors cannot harass or threaten you. They can’t call before 8 AM or after 9 PM. They must stop calling your workplace if you request it.

You can request debt validation. Collectors must prove you owe the debt. Send validation requests within 30 days of first contact.

Document all interactions with collectors. Note dates, times, and conversation details. Records help if you need to file complaints.

The Role of Credit Counseling

Credit counseling provides education and support. Counselors help you understand your options. They don’t pressure you into specific programs.

Nonprofit agencies offer free or low-cost counseling. For-profit companies charge higher fees. Nonprofit status doesn’t guarantee quality, but it’s a good sign.

Our partner Cambridge Credit Counseling offers personalized debt management plans. They negotiate with creditors on your behalf. Their services cost less than traditional settlement companies.

Counselors review your complete financial picture. They identify problems you might miss. You’ll receive a realistic action plan.

Creating a Sustainable Budget

Debt resolution requires a solid budget. Track income and expenses carefully. Identify areas to reduce spending.

Use the 50/30/20 rule as a guideline. Allocate 50% to needs, 30% to wants, 20% to savings and debt.

Adjust percentages based on your situation. While in debt, shift more toward repayment. Sacrifice wants temporarily to achieve financial freedom.

Build a small emergency fund. Even $500 prevents new debt when unexpected expenses arise. Gradually increase savings as you pay down debt.

Rebuilding Credit After Settlement

Settled accounts damage credit scores. But you can rebuild with consistent effort.

Pay all current accounts on time. Payment history is the biggest credit factor. Never miss future due dates.

Keep credit card balances low. Use less than 30% of available credit. Lower utilization improves scores faster.

Don’t close old credit cards. Length of credit history matters. Keep accounts open even if unused.

Monitor your credit reports regularly. Check for errors and dispute inaccuracies. Free reports are available annually from each bureau.

Tax Implications of Settled Debt

Forgiven debt often counts as taxable income. The IRS requires creditors to report forgiven amounts over $600.

You’ll receive Form 1099-C for cancelled debt. Report this income on your tax return. Failure to report triggers IRS penalties.

Some exceptions exist. Insolvency at settlement time may exempt you. Bankruptcy discharged debts aren’t taxable.

Consult a tax professional before settling. Understand potential tax bills upfront. Budget for taxes when calculating settlement offers.