Hence The Word "Debt" Still in Ameri-Debt
Written: Jul 24 '02 (Updated Jul 24 '02)
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Pros: Make one payment instead of 3, 4, 5, 6, or 14.
Cons: Fees, no monthly savings.
The Bottom Line: If paying more now for savings later (taking the chance that there will be savings) sounds good for you - try Ameri-Debt.
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| lynus's Full Review: AmeriDebt |
Ameri-Debt is a non-profit debt counseling organization designed to reduce and ultimately eliminate consumer debt. Most of us have probably seen their commercials - even if we have no need for such services, but like most organizations or corporations for that matter, Ameri-Debt has a hidden agenda even if they do it under the façade of helping people out of debt.
Like most Americans, I am in debt. Pretty deep - at least in my own beliefs, but tame to the national average. Like most I have tried to keep payments low by switching from card to card and accepting just about any offer that exists to transfer balances to a lower annual percentage rate (APR). But like most, at least now, due to this tough economy - it has become increasingly harder to play the game and be successful at it.
That when Ameri-Debt stepped in for me. They have a web site available at: http://www.ameridebt.com where you can view what they do and how they can decrease your debt over time. But like anything, there is a catch.
First and foremost, you have to be in deep debt. Sad as it may be, but Ameri-Debt won't offer their services if you are only slightly in debt. I know someone who called who had about $2,000 in debt, had a bankruptcy on their record, and even had an account that was far past due the deadly 90 days. Still, Ameri-Debt refused their services stating that this person was indeed not in really bad debt because the balances were under two grand. Personally, I found that weird - but once I investigated their service some more I realized as to why they might refuse someone with low balances.
At first all the Ameri-Debt website asks you for are basic questions about what type of debt you have, a general amount, how late you are, and of course a phone number they can contact you at. It takes less than five minutes to make your selections - and then you wait 24 to 48 hours to be contacted by a representative. Funny thing, I told them that I was more available to be contacted at night at my home number - instead they of course, called my daytime number.
Once the counselor calls, he will go over your debt. Normally, this requires that you have your most recent statements in front of you. But, since he called me during a time I didn't highly request he allowed us to go forward based solely on my memory.
The conversation for the most part consisted of specifics of how much debt I had. Who they were with, and how late I was. He wrote these down (I guess) or used his handy little computer full of a debt-database to tell me how much I would save and a quote on what my monthly payment would be to Ameri-Debt to handle such said services. Now, here comes the bigger catch.
Apparently, Ameri-Debt doesn't lower your monthly payment - but they do reduce your interest payments thus allowing a person to get out of debt quicker instead of later. But, if you are like me and are having a hard time paying the payments each month - this is of very little benefit in the current run, even if it is a benefit in the long run. My counselor, Jack (not his real name) stated that my credit monthly payment would be $435.00 to Ameri-Debt. I quickly calculated in my head how much I currently pay and $435 was a little bit more than what I currently pay each month on my own. So far, the program would seem to be a benefit since I'd be paying about the same and have lower interest and a plan to get out of debt sooner than latter.
But then, Jack says he has to transfer me to a recorded message from Ameri-Debt. As if I were a child, he reminds me not to hang up at the end of this message (like duh! Man). It was here that I knew "it" was coming. The "contributions" Ameri-Debt would ask for my participation in the program. The "contributions" they state are voluntary - but really, they are not.
First, according to their website these contributions would exist of a lump sum of your first monthly payment to Ameri-Debt to be held for administration costs and initial fees in relation to taking over your account(s). Second, they would "ask" for $7.00 for each account that they will manage. If you have 4 credit cards, the amount being "asked" for would be $28.00. Less is less, more is more. Which is probably why they didn't offer their services to someone I know who had a balance under $2,000. This would have meant only a $7.00 payment for the one account and probably about a $80 lump sum. Less is less, and more is more remember.
So, my $435.00 monthly payment has now increased to $463.00. But, I need to come up with the lump sum of $463.00 to be held for "administration fees" and then come up with an additional $463 for the first months payment to the program that will then be administered to my creditors minus the $28.00 going to Ameri-Debt.
More than likely it is here that most people think to themselves; "well, still this sounds like a bargain" and they continue. But I pressed on further. I said to Jack, that $463.00 would actually be more than what I am currently paying now a month. Granted you may reduce the amount of time (years) to pay off the debt - but if you have a hard enough time right now making monthly payments how is this a benefit? Jack responded with clearly a practiced response that Ameri-Debt would get me out of debt quicker than if I had done it on my own (a true statement to their policies - but not if the long run is right now, especially in terms of monthly payments).
Also, you have to make the initial payment of your total monthly sum before Ameri-Debt will actually begin the process of bargaining with your credits. See, the "monthly cost" they have "quoted" is based on averages from previous members - but your "average monthly cost" could be different depending on how the bargaining goes with your actual creditors. But, you can't find our if this is to your benefit or not, until after you have signed up and paid Ameri-Debt that initial monthly "contribution".
It was about this time that I started to feel that Ameri-Debt really was just another corporation hiding under the label of a "non-profit organization". It felt a little weird that Jack had to transfer me to a voice recording regarding their "required contributions" and couldn't and would not discuss it verbally like the entire previous conversation had been. Who knows, perhaps there's some legal issue in that. They could go to court and say "well, it was a recording and not a real person making those statements - so we cannot be held responsible for the actions caused by members to contribute".
Also, it felt like the conversation was really stale and practiced, at least on Jack's part. All of his questions were well designed, grammatically correct, and concise - which automatically means that they are practiced and questions trained to get the information they need - and not the information you need to see clearly if you need them.
But, I've also been a skeptic and after doing even rough math in my mind - I knew that Ameri-Debt would be of little help. I would pay more each month (on top of rent, car payments, insurance, food, etc., etc., ) and they may get me out of debt quicker (5 years instead of 6) - but still, if I can't afford to make larger payments now, what's the use of the program?
Finally, one last note. The very next day after I applied to Ameri-Debt I received about three separate phone calls (thankfully my answering machine picked them up) asking me to join "their" debt counseling service. I re-checked the Ameri-Debt website and sure enough they state at the very bottom of the application page that they may refer your application (including phone numbers!) to another second-party who may contact you regarding a similar service. I don't know why Ameri-Debt would do this - refer me - but then also contact me about they own service. Perhaps all of those "other" organizations are all under the same one umbrella?
Who knows, but I have asked Jack not to contact me again.
Recommended:
No
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