Americor vs. National Debt Relief

Fees: Americor's wider range vs. National's 25% cap

Americor charges 14% to 29% of the debt you enroll, and the rate varies by state. It charges no sign-up or cancellation fee and collects its fee only after you approve a settlement and at least one payment is made. You also pay monthly fees to the third-party dedicated account provider, and those are not refunded if you leave.

National Debt Relief charges up to 25% of enrolled debt, depending on your state and balance, and collects nothing until a debt is settled. Its site does not list the dedicated account fees, so ask for the monthly amount.

On $20,000 of enrolled debt, Americor’s range works out to $2,800 to $5,800 in fees, and National Debt Relief’s cap works out to $5,000 or less. If your state puts you near Americor’s low end, it could cost less. If you land above 25%, National Debt Relief is cheaper. The only way to know is to get each fee in writing for your state and balance.

Fees are a percentage of the debt you enroll, not of what you save. They come on top of the settlement payments, the interest and late fees that build while accounts wait to settle, and any tax owed on forgiven debt.

Savings: what each company discloses

Both companies publish a before-fee figure for clients who finish. Americor says clients who make all monthly program payments save about 40% to 50% of enrolled debt, an average of 45%, before program fees. National Debt Relief gives the same 45% before fees and goes one step further: about 20% including its fees, over 24 to 48 months.

That after-fee number is the one to plan around. If National Debt Relief’s clients net about 20%, Americor’s clients paying a fee near the top of its range would likely net less, though Americor does not publish an after-fee figure, so we cannot confirm it.

Both companies say not all clients complete the program, and both say they cannot guarantee that debts will be resolved for a specific amount. People who drop out keep the credit damage and may have paid fees on the debts that did settle. Results vary by creditor, state and how steadily you make deposits.

Track record and ratings

Americor has operated since 2009 and says it has served more than 200,000 people. It has held an A+ rating from the BBB and been accredited since November 2015, and it rates 4.7 out of 5 from 17,594 reviews on Trustpilot.

National Debt Relief has also operated since 2009 and is the larger company by its own count, with 1.5 million people enrolled. It has held an A+ from the BBB and been accredited since February 2013, is an ACDR member and IAPDA Platinum accredited, and rates 4.7 out of 5 from 45,344 reviews on Trustpilot.

Never respond to a debt relief offer that looks like it comes from a government agency. Neither company is affiliated with the government.

Loans and other options each company offers

Both companies can point you to a loan instead of settlement if your credit allows it.

• Americor works with its sister company Credit9, whose loans are made by Cross River Bank. Americor says some settlement clients can apply after six months to pay off remaining creditors. Credit9’s sample loan is $4,300 at a 24.00% APR over 30 payments of $191.99. Americor also says some programs may be offered through The Law Firm of Higbee & Associates, doing business as Advantage Law, so check whose name is on your agreement.
• National Debt Relief offers debt consolidation loans through partner lenders with APRs of 6.25% to 35.99% and terms of 24 to 60 months. The loans are not available in every state.

A loan keeps your accounts current, so it does far less damage to your credit than settlement. Compare any loan offer with a 0% balance transfer card and with a nonprofit debt management plan before you accept it.

Risks to weigh before you enroll with either

Both programs ask you to stop paying the creditors you enroll while money builds in a dedicated account. The CFPB warns that this can hurt your credit scores, that creditors can sue you during the program, and that late fees and interest can leave you owing more than when you started. Late payments can stay on your credit reports for up to seven years.

Forgiven debt is generally taxable income under IRS rules, and creditors may send Form 1099-C. If you were insolvent when the debt was canceled, Form 982 may let you exclude some or all of it. Talk to a tax professional before your first settlement.

The FTC’s Telemarketing Sales Rule protects you with both companies. No fee can be charged before a debt is settled and a payment is made, the dedicated account must be in your name, and you can leave at any time and get your balance back, minus fees already earned. Skip settlement if you can still make your minimum payments, since a nonprofit debt management plan lowers interest without the missed payments, or talk to a bankruptcy attorney if a creditor has already sued you.