National Debt Relief Review
Feeling overwhelmed by debt? Having a hard time making repayments and minimum payments? Debt relief is what you can explore. It is observed that about a third of Americans have less than $1000 saved in their retirement account and many claim that their debt levels are higher than their retirement savings. Thus, domestic debt seems to be a major issue in the US.
What is debt settlement?
Borrowers with unmanageable levels of debt are often faced with two possibilities: bankruptcy or debt settlement. If you are choosing between bankruptcy and debt settlement, definitely have a serious look at debt settlement first. Debt settlement will involve dealing with creditors and negotiating with them. Debt settlement basically involves negotiating down your outstanding debt amount with the lender. As you can imagine, these discussions will not be easy. Dealing with creditors is risky and your short-term credit will take a hit. But with debt settlement, you are sure to benefit in the long run.
You may be wondering why a creditor would take less money than what is owed to them. The answer is the simple concept of “less is better than nothing”. If a borrower declares bankruptcy and goes through the subsequent procedures, then the lender may not get anything at all. Once a debt goes bad in the lender’s books (non-payment of installments), it gets handed over to a recovery company. The recovery company and the lender both want to get paid. Hence, they will try to get back as much as they can. Thus, debt settlement works.
You can either settle the debt yourself or work with a professional company that specializes in debt settlements. If you do work with a company for your debt settlement, the company will normally negotiate a debt settlement amount with all your lenders. You will pay the debt settlement company a fixed monthly amount. This fixed amount gets broken up and distributed to all the creditors with whom settlement has been negotiated. The debt settlement company may sometimes include their fee in this fixed monthly payment. By going through this debt settlement process, you can get out of debt faster.
National Debt Relief
There are many debt settlement companies with plenty of online presence. Once you decide to engage with a debt settlement company, the next step will be to choose the right company for your preferences and debt situation. National Debt Relief is a well-known debt settlement company offering a host of debt settlement and credit services. They first started operating in 2009 and over the last decade, they have climbed to the top of debt settlement companies in terms of rankings.
As you explore National Debt Relief’s services, the best thing to do first would be to visit the National Debt Relief website and fill out the application form. Based on the information you fill out, National Debt Relief will let you know right away whether you qualify for their debt settlement programs or not. If your particular case is more complex and not covered by the website, it is best to give them a call on their toll-free number.
After you fill out the form, you can also download a budget planning worksheet. National Debt Relief has posted a budget planning sheet on its website. This useful tool can help you track all your expenses and spending trends. By getting all this data on the sheet, you can observe and learn to optimize your spendings and maximize your savings.
Various features of debt settlement services
As you explore the debt settlement offerings of various companies, you will come across the following features which most companies seem to offer:
- #1 Transparency: A good debt settlement company will be clear and upfront about how much fees they will be charging to help settle your debt. If the fee structure is ambiguous and if you feel like you may be charged with hidden fees, it is best to stay away from such companies. A reputed debt settlement company will also clearly state what it can do for you in terms of reduction rate. They will have their average debt reduction rate listed on their website. This is the average that they have done over their operating history. The amount of your debt that gets reduced could be more or less than this average, but the average gives you an idea of the company’s success.
- #2 Pricing: Debt settlement companies earn revenue by charging their customers (borrowers) fees for their services. This fee is normally a percentage of debt that has been reduced. For example, if your debt was originally $10,000 and if the company settles it at $6,000, then the reduced amount is $4,000. So, The company may charge you 20% or $800 on that $4,000 amount. Sometimes, companies charge the service fee on the enrolled debt. So, if you went in with an outstanding debt of $10,000 as in the example above, and if the company settles it for $6,000, it may charge you fees on $10,000 and not on the reduced $4,000 amount. The $10,000 amount is the enrolled debt. This fee structure varies from company to company. Hence, it is important to understand what the structure is. The percentage for the fee normally varies between 15 to 25%.
- #3 Reasonable Fee Structure: Debt settlement companies with the best track records normally do not charge substantial upfront fees. They become due only when the results of the settlement process start showing up. This is important as well because you do not want to be paying fees and not seeing any results. That would leave you in an undesirable position of having lost your money with no result in return. Reputed companies structure their fee in a result-oriented manner because they are confident that they can get results.
- #4 Free Debt consultation: Some debt settlement companies offer a free debt consultation session at the beginning of the engagement. While this may not be an absolute must-have feature, some companies do offer this service and it is worth knowing about it.
- #5 Simple application process: The application process of any debt settlement company must be closely looked at. Ideally, the application process should be easy and simple. It should take less than 30 seconds or so. If the process is too complicated or if you are being asked for disproportionate amounts of information upfront, there is every reason to have doubts about the quality of that company.
- #6 Friendly customer service: Since debt settlement is not a quick short process, you will be working closely with the debt settlement company that you choose. Hence, having friendly and patient customer service representatives is critical. Try to find out reviews of the customer service of debt settlement companies. If possible, speak to the agents yourself and see how they respond to you.
- #7 Time to settlement: Normally, debt settlement takes anywhere between 2 to 4 years. Find out how much time your company of interest takes on average. National Debt Relief claims to resolve debt settlement within two to four years. This is in line with the industry standard. They even set up a plan in order to demonstrate how they will achieve the timeline.
- #8 Moneyback guarantee: If you feel that your debt settlement is not satisfactory, then you can have the option of asking for money back. The reputed strong debt settlement companies will have this feature as part of their services and you should try to work with a company which offers money back guarantee. National Debt Relief offers full moneyback.
- #9 Cancel anytime: Contracts that are of a fixed-time duration can work well if you know exactly how long you will need the services of a debt settlement firm. You can then benefit from stable pricing over the term of the contract. But in most cases, you will appreciate the flexibility of stopping services when you think they are no longer required. National Debt relief allows you to cancel the service at any time.
- #10 Data security: Explore and ask debt settlement companies about their data policy. National Debt Relief has data and privacy measures that are in line with the industry. You can even request them to give you more details about their data security measures.
- #11 Reputation: Check if the debt settlement company of your interest has any industry affiliations or associations. National Debt Relief has an A+ rating from Better Business Bureau. It also has accreditation for IAPDA and AFCC. The company has debt arbitrators who are accredited by the IAPDA. This association verifies if the debt arbitrators have sufficient knowledge of the law and appropriate education.
While National Debt Relief and some other companies have attractive features on offer, there are also some disadvantages worth mentioning. If we focus on National Debt Relief, it must be clarified that they normally offer no single point of contact or a case manager. This has led certain customers to mention in their reviews that they felt like being made to run around, as they had to speak with multiple people for the same problem.
Secondly, most of the debt settlement companies are not operational in every single state of the US. National Debt Relief is not available in Connecticut, Georgia, Kansas, Maine, New Hampshire, South Carolina, Oregon, Vermont, West Virginia. So, when you explore debt settlement companies, make sure they operate in your state. This is the very first step you must take.
As you would compare the above list of features and offerings of various debt settlement companies, you must also compare the downsides of each company as understand how that affects your situation.
Points to note
For availing services of national debt relief, you need to have outstanding debt greater than $7500. This debt can be unsecured debt such as credit card debt, credit union debt, department store card debts, medical bill debt, etc. You cannot enroll secured debt like a mortgage, an auto loan, federal student loan, or child support.
In the near future, your credit score will go down. However, in the long term, your credit will improve. So, besides getting debt relief, the debt relief program will help heal your credit in the longer term.
National Debt relief is not a credit repair company. So, it does not dispute incorrect items on your credit report. It simply helps lower your debt settlement amount with the creditor.
Debts that are forgiven are taxable once they cross $600.
Bankruptcy is very different from debt settlement. Bankruptcy can stay on your record for 10 years, while debt settlement will affect your credit for a short term. If you go through a bankruptcy, you might not be eligible for a loan for 10 long years.
New Era Debt is the other popular debt settlement company that borrowers choose. This company is very transparent and have an entire section on their website explaining the risks associated with debt settlement. They have lower fees. They do not have a $7500 minimum. So, if you are struggling with unsecured debt that is less than $7500, then New Era may be the place to go. New Era is not accredited by AFCC or USOBA. New Era debt also does not operate everywhere. It is available in only 42 states.
Another competitor is Freedom Debt Relief. This company has a very high debt requirement for enrolling. You need to have at least $15000 worth of debt to avail their services. While their requirements may be high, their service receives good reviews. They not only help with debt consolidation, debt reduction, and bankruptcy, but also provide credit counseling services and guide borrowers on how to manage debt. Their customer service is available 7 days a week, which is not true for all debt settlement companies.