National Debt Relief Debt Settlement: A Comprehensive Guide
Are you drowning in debt and feeling overwhelmed? You’re not alone. Millions of Americans struggle with unmanageable debt, whether from credit cards, medical bills, or personal loans. But there is hope. Debt settlement through companies like National Debt Relief may provide a path to financial freedom.In this comprehensive guide, we’ll dive deep into how National Debt Relief’s debt settlement program works, its pros and cons, and whether it could be the right solution for your unique financial situation. Let’s get started!
What is Debt Settlement?
Debt settlement, also known as debt negotiation or debt resolution, is a process where you negotiate with your creditors to pay less than the full amount owed to resolve the debt. Typically, you work with a debt settlement company like National Debt Relief who will handle the negotiations on your behalf.The goal is to get the creditor to agree to accept a lump sum payment that is significantly less than your outstanding balance to consider the debt resolved. While it can be an effective way to get out of debt more quickly and for less money than making minimum payments, it’s not without risks and drawbacks.
-How Does National Debt Relief’s Program Work?
When you enroll in National Debt Relief’s debt settlement program, here’s what you can expect:
- Free consultation: First, you’ll discuss your debt situation with one of their Certified Debt Specialists to see if you qualify for the program. They’ll go over your options and help you determine if debt settlement is right for you.
- Deposit funds: If you enroll, you’ll begin depositing money each month into a special purpose account that you control. National Debt Relief will use this account to make settlement offers to your creditors on your behalf.
- Negotiate with creditors: Once you have sufficient funds built up, National Debt Relief will reach out to your creditors to negotiate settlements. They have years of experience and will work to get you the best settlement possible.
- Settle debts: If a creditor accepts a settlement offer, National Debt Relief will ask for your authorization to make the payment from your account. Once paid, that debt will be considered resolved.
- Debt-free: The process repeats with all your enrolled debts until you complete the program, which typically takes 24-48 months. At that point, you should be debt-free!
One important thing to note is that when you enter into a debt settlement program, you will likely be asked to stop making payments on your enrolled debts. This can lead to late fees and interest charges accruing, as well as negative impacts to your credit score. However, for many people, the damage to their credit is worth the opportunity to resolve their debts for less and get a fresh start.
Pros of National Debt Relief’s Debt Settlement Program
So why would someone consider working with National Debt Relief to settle their debts? Here are some of the potential benefits:
- Resolve debts for less: The primary appeal of debt settlement is the opportunity to get out of debt by paying less than you owe. National Debt Relief says most of their clients’ debts are resolved for 50% of the outstanding balance before fees.
- Avoid bankruptcy: For some people, debt settlement can be an alternative to filing for bankruptcy. While both will likely have a negative impact on your credit, bankruptcy can have longer-lasting consequences.
- Single monthly deposit: Once enrolled, you’ll make a single monthly deposit into your settlement account rather than juggling multiple payments to various creditors. This can help simplify your finances.
- Expert negotiators: National Debt Relief has a team of expert negotiators who are skilled at getting creditors to accept less than the full balance owed. They can take the stress of negotiating off your shoulders.
- No upfront fees: National Debt Relief doesn’t charge any fees until after a debt is settled. This is required by the Federal Trade Commission for all debt settlement companies.
Cons of National Debt Relief’s Debt Settlement Program
While debt settlement can be a good option for some people, it’s not right for everyone. Here are some potential drawbacks to consider:
-- Credit impact: Debt settlement will likely have a significant negative impact on your credit score, particularly if you stop making payments on your enrolled debts. This can make it harder to get credit in the future.
- No guarantees: While National Debt Relief will attempt to negotiate settlements with all your creditors, there’s no guarantee they will be successful. Some creditors may refuse to negotiate or may even sue you for collections.
- Fees: Although National Debt Relief’s fees are 100% performance-based, they can still be substantial – typically 15-25% of your enrolled debt. These fees are in addition to the settlement amount.
- Taxable income: The IRS considers forgiven debt over $600 to be taxable income. So if you have a substantial amount of debt settled, you may owe taxes on that amount.
- Lengthy process: Debt settlement is not a quick fix. National Debt Relief’s program typically takes 24-48 months to complete, and during that time you may continue to accrue late fees and interest charges.
Is National Debt Relief Legitimate?
With so many debt relief scams out there, it’s natural to wonder if National Debt Relief is legitimate. The good news is that they are a reputable company with a track record of helping people resolve their debts.Here are some key things to know about National Debt Relief’s legitimacy and reputation:
- They’ve been in business since 2009 and have resolved over $1 billion in consumer debt
- They have an A+ rating with the Better Business Bureau
- They are accredited by the American Fair Credit Council and the International Association of Professional Debt Arbitrators
- They have over 30,000 reviews on TrustPilot with an average 4.7/5 star rating
Of course, no company is perfect and National Debt Relief has had some complaints over the years. But overall, they have a solid reputation and are a legitimate company to consider for debt settlement.
Alternatives to Debt Settlement
Debt settlement isn’t the only way to get out of debt. Depending on your unique financial situation, you may want to consider some of these alternatives:
- Debt management plan: A debt management plan through a non-profit credit counseling agency can help you pay off your debts in full, often with reduced interest rates and fees. You’ll make a single monthly payment to the agency, who will then distribute it to your creditors.
- DIY debt payoff: If you can afford to pay more than the minimums on your debts, you may be able to pay them off on your own using either the debt snowball or debt avalanche method. This will protect your credit score but may take longer.
- Bankruptcy: In some cases, bankruptcy may be the best option for a fresh start. Chapter 7 bankruptcy can discharge most unsecured debts, while Chapter 13 sets up a 3-5 year repayment plan. However, bankruptcy has serious long-term consequences for your credit.
- Debt consolidation loan: If you have good credit, you may be able to take out a debt consolidation loan to pay off your high-interest debts. This can simplify your payments and potentially save you money on interest. However, it’s important to address the underlying issues that caused the debt in the first place.
The Bottom Line
Debt settlement through a company like National Debt Relief can be a good option for those struggling with significant debt who want to avoid bankruptcy. It offers the potential to resolve your debts for less than you owe and become debt-free in a relatively short period of time.However, it’s not without risks and drawbacks, including a significant negative impact on your credit score and the potential for fees and taxable income. It’s important to carefully weigh the pros and cons and compare it to other debt relief options before enrolling.If you do decide to move forward with National Debt Relief, be sure to thoroughly research the company and read over your contract carefully before signing. And remember, the goal of debt settlement is to get you out of debt for good – so be sure to address the root causes of your debt and make a plan to avoid falling back into debt in the future.
Frequently Asked Questions
How much does National Debt Relief cost?
National Debt Relief’s fees are typically 15-25% of your enrolled debt, depending on the state you live in and the amount of debt you have. However, they don’t charge any upfront fees – you only pay after a debt is settled.
-How will debt settlement impact my credit?
Debt settlement will likely have a significant negative impact on your credit score, particularly if you stop making payments on your enrolled debts. Late payments, defaults, and settlements can all stay on your credit report for up to 7 years. However, many people find that the temporary hit to their credit is worth the opportunity to resolve their debts and get a fresh start.
Can I negotiate with my creditors on my own?
Yes, it is possible to negotiate with your creditors on your own. However, it can be time-consuming and stressful, and you may not get as good of settlements as a professional debt settlement company. Creditors are often more willing to negotiate with debt settlement companies because they know they’re serious about resolving the debt.
How long does debt settlement take?
The length of a debt settlement program can vary depending on your unique financial situation, but most people complete National Debt Relief’s program within 24-48 months. Keep in mind that during this time, you may continue to accrue late fees and interest charges on your enrolled debts.
-What types of debt can be settled?
Most unsecured debts can be settled, including credit card debt, medical bills, personal loans, and collection accounts. However, secured debts like mortgages and car loans typically cannot be settled for less than the full balance. Student loans are also generally not eligible for debt settlement.
Get Started with National Debt Relief
If you’re struggling with overwhelming debt and think debt settlement might be right for you, consider reaching out to National Debt Relief for a free consultation. Their team of Certified Debt Specialists can review your unique situation and help you determine the best path forward.