One major drawback of using National Debt Relief is the cost associated with their services. The National Debt Relief cost typically ranges from 15% to 25% of the total debt enrolled in the program. These fees can add up significantly over time.
When it comes to credit card debt relief, it's important to dispel a common misconception: There are no government-sponsored programs specifically designed to eliminate credit card debt. So, you should be wary of any offers claiming to represent such government initiatives, as they may be misleading or fraudulent.
Is National Debt Relief legit? National Debt Relief is an accredited member of the American Association for Debt Resolution (AADR). It has been around since 2009 and has helped over 600,000 individuals reduce their debt. It also has an A+ rating from the BBB (Better Business Bureau).
Lenders apply debt forgiveness in several ways, including through directly negotiated settlements or government programs. You can also approach industry professionals such as debt counselors to assist with repayment plans. However, it's important to keep in mind that debt forgiveness is relatively rare.
The short answer is yes, credit card debt forgiveness can negatively affect your credit score. However, the impact depends on various factors, including your current credit score and the specifics of your debt settlement agreement.
Pros & Cons of debt settlement with National Debt Relief
However, debt settlement does go on your credit report. It won't leave as severe a mark as a bankruptcy would, but it will stain your report for seven years. Anytime you escape debt for less than you owe, there likely will be repercussions.
Keep in mind that the government doesn't offer grants to help Americans pay off consumer debt from things like credit cards. It does, however, offer financial support for Americans struggling with a range of tough financial situations.
National Debt Relief works by negotiating with your creditors to settle your debts for less than you owe. Once you hire National Debt Relief, they'll establish an FDIC-insured escrow account in your name. Then, rather than paying your creditors, you'll deposit a monthly payment into this account.
Stopping payment on a debt means you could face late fees and accruing interest. Additionally, just because a creditor agrees to lower the amount you owe doesn't mean you're free and clear on that particular debt. Forgiven debt could be considered taxable income on your federal taxes.
Over the past four years, the Administration has approved nearly $180 billion in student debt relief for 4.9 million borrowers through various actions, taking historic steps to aid hardworking Americans across the country who have worked to repay their student loans but remained in debt.
Perhaps the most common debts that cannot be discharged under any circumstances are child support, back taxes, and alimony. Here are some of the most common categories of non-dischargeable debt: Debts that you left off your bankruptcy petition, unless the creditor had knowledge of your filing. Many types of taxes.
Credit Score Damage: One of the major downsides of debt settlement is the negative impact on credit scores. The process can lower a credit score by 100 points or more, depending on the individual's credit history. This can make it harder to qualify for credit, loans, or favorable interest rates for several years.
Key Takeaways. There aren't any free government debt relief programs for credit card or personal loan debt other than bankruptcy. Many types of government debt relief exist in the form of grants and low-interest loans for specific purposes.
If you do it right, debt consolidation might slightly decrease your score temporarily. The drop will come from a hard inquiry that appears on your credit reports every time you apply for credit. But, according to Experian, the decrease is normally less than 5 points and your score should rebound within a few months.
While there are no government debt relief grants, there is free money to pay other bills, which should lead to paying off debt because it frees up funds. The biggest grant the government offers may be housing vouchers for those who qualify. The local housing authority pays the landlord directly.
So, while you can use your credit card accounts after consolidating your debt in most cases, it could be a bit more difficult to open and use new credit cards — and the route you take to consolidate your debt could play a role as well. Learn how the right debt relief strategy could help you now.
National Debt Relief does not require a specific credit score, so it could be a good option for those who don't have strong enough credit to qualify for debt consolidation.
Yes. Of course, you can buy a house after you settle your debt. It's not true that debt will stop you from getting a mortgage.
Freedom Debt Relief is a legitimate debt settlement company founded in 2002. It's accredited by the Better Business Bureau (BBB) with an A+ rating and holds an accreditation from the American Association for Debt Resolution (AADR).
Rather than paying your creditors, you'll deposit a monthly payment to a Dedicated Savings Account, in your name and under your control. As funds build up, we'll contact your creditors to negotiate and agree upon reduced balances.