National Debt Relief is a debt settlement company that helps consumers lower their total debt through negotiation with creditors. According to the company, clients who successfully complete their program typically reduce their enrolled debt by about 20% to 25% after factoring in fees.
Here’s how it works: Once you sign up with National Debt Relief, they set up an FDIC-insured escrow account in your name. Instead of making payments directly to your creditors, you deposit a set amount into this account each month. While this payment may be less than what you owe to your creditors, the more you contribute, the quicker you can work towards resolving your debt.
National Debt Relief steps in to negotiate with your creditors as funds build up in the escrow account. They aim to settle each debt for less than what you owe. Since you’ve stopped making payments to the creditor, they might be more willing to accept a lower settlement rather than risk getting nothing.
The payment comes from the escrow account when an agreement is reached and that debt is officially settled.
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The main cost associated with National Debt Relief is the settlement fee, which is 25% of your total enrolled debt. However, in some states, this fee is capped at 15%.
Here’s an example of how it works: If you enroll with $10,000 of credit card debt and manage to settle it for $5,000, National Debt Relief will charge a settlement fee of $2,500 (25% of the original $10,000). This fee is besides the $5,000 you’ll need to pay to your creditors, bringing your total cost to $7,500.
The company only collects this settlement fee after successfully negotiating a settlement on your behalf. There’s a one-time setup fee of $9 plus a monthly charge of $9.85 to cover the cost of maintaining your escrow account.
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Yes, National Debt Relief is a legitimate debt settlement company that has been in operation since 2009. It’s accredited by the Better Business Bureau (BBB), where it holds an A+ rating, showing a strong track record of customer service and ethical business practices.
Additionally, National Debt Relief is accredited by the American Association for Debt Resolution (AADR), further solidifying its credibility in the industry.
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To qualify for National Debt Relief, you need to have a minimum of $7,500 in unsecured debt. This can include debt from credit cards, personal loans, lines of credit, medical bills, business debts, or private student loans.
However, the company doesn’t handle secured debts, meaning it won’t settle debts attached to collateral, such as auto loans or mortgages. It also doesn’t negotiate certain types of debt, including unpaid taxes, back rent, child support, fines, speeding tickets, cell phone bills, or car repair bills.
As part of the application process, National Debt Relief performs a soft credit check to confirm your creditors and the amounts you owe, but this won’t impact your credit score. It’s also important to note that National Debt Relief’s services aren’t available in Oregon, Vermont, West Virginia, and Wisconsin.
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Before deciding to pursue the best debt relief companies like National Debt Relief, it’s essential to be aware of the potential risks involved. Both the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) advise consumers to consider the following dangers carefully:
National Debt Relief works by negotiating with your creditors to settle your debts for less than what you owe. Through their process, you’ll deposit funds into an escrow account, which will pay creditors once a settlement is reached.
While this method can reduce your overall debt, it comes with risks, such as a negative impact on your credit score and the potential for accumulating more debt through interest and fees. If you’re struggling with unsecured debt and considering settlement, National Debt Relief could be an option, but weighing the risks and benefits before committing is crucial.
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Judith Harvey is a seasoned finance editor with over two decades of experience in the financial journalism industry. Her analytical skills and keen insight into market trends quickly made her a sought-after expert in financial reporting.
