National Debt Relief Program Reviews: Is Credit Card Relief Legit or Scam?

Understanding National Debt Relief

• Overview of National Debt Relief
• What is Debt Settlement?
• The Debt Relief Process
• Eligibility Criteria
• Special Features

Debt settlement is sometimes the only option available to people who are unable to pay their creditors. If the debt is unsecured, such as credit card debt, the situation only becomes more complicated because there’s no collateral to fall back on.

In that case, you have to come to a settlement after negotiating with the creditors. But creditors are not obliged to reach a settlement, because they want the money. In that case, debtors can take the help of debt settlement services.

To put it simply, debt settlement services know the means to make creditors agree to a settlement. They talk to your creditors, negotiate with them, and find a way to settle the debt. This process often takes a few years.

National Debt Relief is one of the biggest debt settlement companies based in Broadway, New York. There are several reasons why National Debt Relief is so popular for debt settlement. They have been around the block before and their track record is stupendous for starters.

According to the company itself, those who use their services are looking for a better way to resolve their debt problems without bankruptcy. National Debt Relief does not deal with consumer debt or make monthly payments to creditors.

They do not provide tax, bankruptcy, accounting or legal advice or credit repair services. Because they are so transparent in their services, a large number of debtors use them for settling debts.

National Debt Relief was founded on Sep. 23, 2009, by Tom Leydiker. In the last nine years, the company has grown to be the largest debt relief company in the East Coast and one of the most popular in the country. The company has an A+ rating from the Better Business Bureau and also receives positive reviews from consumers and small businesses.

The success of the company isn’t surprising given that Tom and his team bring their extensive knowledge and experience in the debt consolidation industry to deliver high-quality services to clients every day. National Debt Relief is currently rated #1 in the country.

National Debt Relief at a glance

National Debt Relief is available mostly for the East Coast, but if you are in any other state that is licensed, you can avail of their services.

What is debt settlement?

Settling a debt involves convincing a creditor to accept less than the amount that is due. Once a creditor agrees to debt settlement, they cannot keep hounding you for the money and also cannot sue you over the debt. As good and simple as that sounds, debt settlement should really be a last resort.

Even though you get away with paying less than the whole amount due, it adversely affects your credit history and dims your chances of being approved for a loan or credit card later.

Many people still go for debt settlement because they think it’s better than bankruptcy. It must also be remembered that debt settlement works only for unsecured debt. If your debt has collateral and if you fail to make your payments, a settlement cannot save your collateral from being taken away.

Debt settlement is considered only when you have many late or missed payments and a number of collections accounts. Typically, a creditor or collector will never agree to accept less than the full amount due, especially if they believe that you can afford to pay the full amount. As everyone knows, creditors can be difficult. They can make life hell for debtors.

Whether you have credit card debt or a student loan, the moment you miss your payments, creditors will keep hounding you for the money, regardless of whether or not you can afford to pay. When you have debt, your credit scores hit rock bottom, and you feel hopeless that your income isn’t enough to meet your debts.

This is when debtors usually think of hiring debt settlement services. However, before you do that, be warned of the multiple risks associated with debt settlement.

Some of the risks are:

Your credit will suffer: If your accounts are not already delinquent, they will be once the debt payments are diverted towards the settlement account. The debt charged off by lenders and the delinquent accounts records stay on your credit history for seven years and adversely impact your credit score.

Penalties and interest will add up: Even if you choose debt settlement, you can be charged with late fees and penalties. At the same time, the interest will keep adding to your balance.

No certainty: National Debt Relief says the company has settled millions in debt ever since it was founded in 2009. However, they also maintain that there’s no guarantee if they will be able to reduce your payments, because most creditors are not ready to negotiate with debt settlement companies. Plus, there are fees over and above the settlement amount.

Settlement fee: Debt settlement companies cannot charge upfront fees, but they charge a percentage of each settled debt. For example, if you owe $10,000 and the settlement comes down to $6,000, and the company 25 percent of the total amount, you end up paying a total of $8,500.

Additional fees: In addition to the fees paid to the company when a debt is settled, there are other fees that customer may have to bear, such as fees to set up the account and monthly fees to maintain that  account under the program. All these fees can add up to make it as expensive as the total amount due.

Settled debt may be taxable: The Internal Revenue Service generally considers forgiven debt (the money you save) as income. You should consult a tax professional about additional tax obligations that come with settled debt.

Despite the risks associated with debt settlement, a large number of people choose to take that road in the hopes of being debt free in a short time. That is when the help of a debt settlement company is needed.

The debt relief process of National Debt Relief

Although the debt relief process for every company is more or less the same, there are certain variations sometimes. The basic variation is in terms of the fees charged by the company. National Debt Relief has built its reputation as one of the most effective debt settlement agencies in the US.

It has a strategic process to settle the debt. First, you need to register with them and create an FDIC-insured account that is different from your personal checking or savings account. You are required you make monthly payments into this account during the debt settlement process.

You do not need to pay any registration fees to the agency. After a detailed consultation about your debt, you are told about the process of debt settlement. If you are okay with the process, you can go ahead and register with them.

The first thing you are advised to do is to stop making payments to your creditor and stop communicating with them at all. This is because you have to convince the creditor that you are unable to make the payments. If you keep making payments, your creditor will believe you can afford to pay off your debts.

Even if you receive phone calls or letters, National Debt Relief will advise you to ignore them for at least three to six months. After this period the accounts should be charged off, and the creditor will count your debt as a tax write off.

Once this happens, National Debt Relief will reach out to the creditor on your behalf, providing evidence that you are unable to make the payments. National Debt Relief will also offer that you want to negotiate a settlement.

As National Debt Relief says on its website, creditors will most likely refuse a settlement. No one likes to receive less than the amount due. But the agency also adds that they have the means to convince creditors. That is why it is best to take the help of a settlement company when negotiating with the creditor, because ordinary people usually don’t know the proper way to convince creditors for a settlement. Even if it takes a while, the company will find a way to convince them.

Once the creditor agrees to a negotiation, they will also do a background check on your credit history, including your debt to other creditors. Since you haven’t been paying any of your debts, the creditor will assume that you are unable to make the payments. After this, the creditors will offer a settlement opportunity because there is no other option if you cannot make the payments.

Depending on the total amount due, National Debt Relief will release the appropriate amount of funds to the creditor. Most relief or debt consolidation programs last anywhere between two and four years, though the average for National Debt Relief is three years.

Those who stay in the program and reach a settlement get to save anything between 30 and 50 percent including fees to National Debt Relief. Many clients cannot complete the program because of insufficient savings or inability to pay.

Eligibility criteria

Not everyone is eligible to be a customer at National Debt Relief. There are a few factors that decide if you are eligible for their debt relief program.

The most important criterion is your amount of debt. If you less than $7,500 in debt, you are ineligible for the debt relief program. This is similar to most other debt relief agencies, which require you to have at least $7,500 in total debt to be eligible for debt settlement.

This is because any amount below $7,500 is considered insufficient for taking such a big risk. Yes, debt settlement is a big risk, and it negatively impacts your credit history and score, so unless your debt amount is significant, you shouldn’t go that road.

The next requirement is that your debt must be unsecured, i.e: without collateral. The debts that don’t qualify for a debt settlement plan include auto loans (including cars, trucks, vans, and motorcycles), federal student loans, personal loans from your current bank, mortgages, and child support.

Whenever there is collateral, creditors will sell it and get the amount due. Not even a debt settlement can save your collateral. So, if you are unable to pay off your home loan, the debt settlement cannot save your house from being taken away.

So what kinds of debt qualify for debt settlement? Any kind of unsecured debt (where there is no collateral) is eligible. Your debt can come from credit cards, department store cards, medical bills, personal loans, credit unions, and collections accounts. In some cases, National Debt Relief may also be able to help settle debts from secured debts or private student loans.

This is completely dependent upon your individual case and if the company considers your debt eligible. In most cases, secured debts are not handled by debt relief companies because there is collateral to fall back on in case of late or missed payments (or no payments at all).

Besides your debt qualification, there are a few other criteria that you must fulfill in order to be eligible. Most important of them is your inability to afford your minimum payments on your credit cards and other accounts. You should have either already missed many payments or are on the brink of. Keep in mind that National Debt Relief isn’t here to cheat creditors of their money.

So, if you are able to pay but still want the company to convince creditors that you don’t have the means to, National Debt Relief will not entertain your request. Creditors need proof that you are really unable to afford the payments. You must actually be in serious financial hardship if you come for debt settlement.

Clients who are eligible for debt settlement don’t see much room for making progress with their finances and considering an alternative to filing for bankruptcy. Such hardships can be the result of unemployment, medical expenses, divorce, a death in the family, or any other type of loss of income.

If you meet some or all of these requirements, then you are most likely eligible for and may even benefit from National Debt Relief’s services. However, you must understand that this is a serious step that damages your credit and also incurs additional fees and even lawsuits. Debt settlement must be considered only in the most extreme cases.

Application process

Applying for National Debt Relief’s services is done online and is usually completed in a couple of minutes. You can first talk to certified debt counselor on the website if you are unsure or have questions and concerns regarding debt settlement.

Otherwise, you can directly start the online application process, which involves providing your basic information, like name, phone number, email address, and total debt amount. With this information, National Debt Relief gives you a free debt relief quote and also lists the services available to help you.

Once you get this free quote, it is recommended that you talk to an independent debt counselor who can weigh your financial situation and offer an unbiased opinion.

During the process

When debtors personally talk to creditors and collectors about debt settlement, they almost always hear a NO. They think the same will happen when they hire the services of a debt settlement company. Clients are asked not to be discouraged because National Debt Relief arms you with advice and resources as during the settlement process.

Once enrolled in debt settlement, you must keep all documentation of your communication with creditors, including emails, letters, bills, and statements. Record phone conversations or note down the time and date and details of the conversation.

You must also request the other party to do the same. If you want to cease communication with your creditors, the agency can help you achieve this effectively and legally.

Typically, National Debt Relief typically advises clients to include all of the creditors in the process. Remember there are no fees charged until the settlement. It is not possible to calculate a fixed rate because fees vary depending upon where you live and how much debt you have.

Special features

National Debt Relief has several benefits. It is an accredited organization with A+ ratings. Secondly, there are no upfront fees. When your debt is resolved, you pay a small percentage of the amount to the company. National Debt Relief offers complete transparency.

There no sales tactics and no pressure; all you get is the help you need. National Debt Relief creates a payment plan that you can afford and stick to. You don’t end up spending all your savings and even have something saved for emergencies.

How Does National Debt Relief Affect Your Credit Score?

It depends on the specific steps that National Debt Relief takes regarding your debts. Some actions, like debt settlement, will hurt your credit score. Some actions, like a debt management plan, won’t affect your credit score but will prevent you from getting new loans and lines of credit. Other options, like debt consolidation, can improve your score over the long run.

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Final words

National Debt Relief is chosen by many for many reasons, including their transparency, customer service, and zero upfront fees. However, since this is a big step, always remember to read the fine print carefully. It is the duty of the customer to read the terms and conditions carefully, instead of later blaming the company. If something isn’t clear, make sure to discuss your queries and concerns before starting the process.

Debt settlement may or may not be a suitable option for your case. Therefore, always consult a debt professional before making a decision. If you decide that debt settlement is your only option, National Debt Relief can be reached on a toll free number 800-300-9550, Monday to Friday 8:00am to Midnight EST, and Saturday 10:00am to 10:00pm EST.