When life throws you a financial curveball, debts can quickly spiral out of control. A job loss, medical issue, or emergency expense can make it almost impossible to keep up with your credit card and other monthly payments.
Take Lindsay, one of National Debt Relief’s clients. She lost her job while simultaneously going through a divorce, forcing her to consider declaring bankruptcy.
Fortunately, she discovered debt settlement while looking for a more viable alternative. Let’s explore her experience to demonstrate how National Debt Relief can help you get back to financial stability without resorting to more drastic measures.
What Is National Debt Relief?
National Debt Relief is a debt settlement company, which means we negotiate with creditors on your behalf to settle your debts for less than you owe. We can help with a variety of unsecured debts, which are accounts that aren’t tied to collateral.
Common examples include:
- Credit card balances
- Personal loans
- Medical bills
- Collection accounts
For Lindsay, debt settlement offered a lifeline when she felt unable to get her finances back on track without assistance. “I was at the end of my rope, and I was looking for a solution,” she said.
What Does National Debt Relief Do?
National Debt Relief works with consumers who have significant unsecured debt and coordinates the process of negotiating settlements with creditors. Typically, that involves the following steps.
Financial Review and Consultation
Our process begins with a consultation where a debt settlement specialist reviews your financial situation. This generally involves discussing your:
- Debt types
- Balances owed
- Monthly income and expenses
- Financial hardships affecting repayment
This conversation helps determine whether a debt settlement program may be right for your circumstances. For Lindsay, it also helped her feel less alone.
“The woman on the phone was so warm, understanding, and solutions-oriented,” said Lindsay. “I finally had an answer and hung up feeling great.”
Creating a Structured Debt Relief Plan
If you choose to enroll, the next step is to create a plan to save money for your potential settlements. Typically, this involves depositing the funds you would have otherwise put towards your debts into a dedicated account.
These accounts are managed by an independent third-party payment processor, but the funds remain under your control.
Negotiating With Creditors
Once enough funds accumulate, National Debt Relief can contact your creditors to discuss potential settlements. If one agrees to a reduced payoff amount, we present the offer to you before moving forward.
Lindsay recalls receiving helpful updates as negotiations progressed. “I was getting emails and text messages and phone calls saying we just negotiated 50% down from this credit card or 35% down from that card.”
Costs and Trade-Offs to Understand
Debt settlement programs can provide a structured way to address large unsecured debts that you’re struggling to pay off. That said, it’s important to understand the trade-offs.
Fees
Federal rules prohibit debt settlement companies from taking fees upfront. However, they do generally collect a fee after each successful negotiation. These are often a percentage of the settled debt or the amount saved, though it depends on the program.
Credit Impact
Debt settlement programs may require you to stop making payments to your creditors. Any missed payments, delinquent accounts, or settled debts may appear on your credit reports and influence your credit scores.
Collection Activity or Legal Action
Creditors may continue attempting to collect unpaid balances until a settlement is reached. This can include collection calls, letters, or other activity. In some situations, creditors may also pursue legal action.
Taxes on Forgiven Debt
The Internal Revenue Service generally treats canceled debt as taxable income unless an exception applies, such as insolvency or bankruptcy. Before pursuing debt settlement, consider speaking to a tax professional to understand the implications.
Other Debt Relief Options
Debt settlement can be a strong option for many people struggling with unsecured debt, but it may not be right for everyone. Here are some alternatives to consider.
Debt Management Plans
Debt management plans are typically offered through nonprofit credit counseling agencies. Participants make a monthly payment to the agency, which in turn distributes funds to creditors. Balances are usually repaid over three to five years.
Debt Consolidation Loans
Debt consolidation combines multiple debts into one new loan. This can simplify payments by replacing several monthly bills with a single payment. In some circumstances, it can also lower your interest or total monthly burden.
Bankruptcy
Bankruptcy is a legal process that can help you address certain debts when repayment becomes impossible. For individuals, options include Chapter 7 and Chapter 13. Each approach has unique financial and legal consequences.
Final Thoughts
National Debt Relief is a debt settlement company that negotiates with creditors on your behalf, helping to resolve qualifying debts. For Lindsay, completing our program marked a turning point after a difficult period that included divorce and job loss.
“The financial burden was weighing on me so much. It has changed who I am entirely now that I don’t have that weight on my shoulders.”
If you’re struggling with your own unsecured debts, find out if you qualify for debt relief today.
