National Debt Relief (NDR) appears legitimate as a debt settlement company, boasting good BBB/customer reviews, but debt settlement itself carries significant risks like credit damage, potential lawsuits, and high fees (15-25%), with no guarantee of success, meaning you could end up deeper in debt; always research heavily and be wary of unsolicited offers or upfront fees from any debt relief company.
National Debt Relief is legitimate, but that doesn't make it the best solution. The truth is that many people would be better off filing bankruptcy—without the fees, stress, and uncertainty of settlement programs. Unlike debt settlement companies, bankruptcy attorneys are fiduciaries.
Yes, it can still happen being sued while in NDR isn't uncommon, especially on larger balances. The key is to notify NDR immediately so their negotiators or legal partners can step in. Keep making your program payments, don't ignore the summons, and let them handle settlement or defense.
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The main downsides of debt relief companies, especially debt settlement, include severe credit score damage from missed payments, high fees (15-25% of debt), the risk of creditors suing you, increased debt from penalties, potential tax liability on forgiven amounts, and the possibility the company won't succeed in settling all debts, leaving you worse off. Creditors aren't obligated to negotiate, and you'll likely have to close accounts and stop paying, leading to aggressive collections.
By taking the right steps to rebuild your credit, like using secured cards wisely and making all payments on time, you can gradually work your way back into the credit world. It won't happen overnight, but with patience and persistence, using a credit card again after debt settlement is possible.
Both offer a debt settlement program where they negotiate with creditors to reduce the amount owed by clients. However, National Debt Relief is often known for its more personalized approach to customer service, while Freedom Debt Relief operates on a larger scale with a more structured, standardized program.
Can I Continue To Use My Credit Cards? No, you won't be able to use your credit cards that are enrolled in the program. Plus, creditors will usually close your accounts after you've missed a few payments. Your debt expert will help you decide the best plan of action based on your current financial situation.
First Advantage pretends to be a debt relief company, but it's not. When you read the fine print, you'll see that it gathers your information and sells it to third-party providers, some of which may offer debt settlement services, consolidation loans or other financial products.
The drawbacks to debt relief programs are high fees and potential damage to your credit for missed payments. Debt consolidation loans and balance transfer cards can help you manage your debt and boost your credit scores, if you qualify for them.
But if something happens, you might need to defer a year or forgo college all together. So long as you haven't spent any of the money you applied for, you can cancel all or a portion of it as long as you received it within the last 120 days. You won't be charged interest or fees when you return the money.
It's natural to assume that settling the debt will stop debt collectors from harassing you, prevent them from adding new charges to your balance or, even worse, suing you for the money. Unfortunately, that's not the case. You can indeed be sued for debt, even if you're in the process of paying the debt collector.
The 2-2-2 credit rule is a guideline for building strong credit, suggesting you should have two active credit accounts (like cards or loans) for at least two years, with consistent on-time payments for those two years, often with a minimum credit limit of $2,000 per account, to demonstrate financial responsibility to lenders, especially for mortgages. It's a benchmark to show you can handle credit well over time, reducing lender risk and improving approval odds for major loans.
A risky way to get out of debt: There are risks in working with National Debt Relief, including a major hit to your credit, falling deeper into debt as you await a successful settlement negotiation and even the possibility of being sued by a creditor. Learn more about debt settlement risks lower down.
Summary: Ultimately, it's better to pay off a debt in full than settle. This will look better on your credit report and help you avoid a lawsuit. If you can't afford to pay off your debt fully, debt settlement is still a good option.
The bottom line
Most negative marks related to debt relief remain for about seven years but they become less significant as time goes on. If you're working to rebuild your credit, focus on maintaining positive financial behaviors — paying bills on time, reducing debt and monitoring your credit report for errors.
Avoid doing business with any company that promises to settle your debt if the company:
However, if you're not behind on payments and your credit score may qualify you for a lower rate, debt consolidation is likely the safer, smarter move. Not only will you be able to streamline the debt payoff process, but you also save on interest and protect your credit.