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Home > Ask The Get Out of Debt Experts > I Got a Letter From Credit Relief Today Claiming to Be Able to Eliminate My Debt Under the National Debt Relief Stimulus Plan. – Veronica

I Got a Letter From Credit Relief Today Claiming to Be Able to Eliminate My Debt Under the National Debt Relief Stimulus Plan. – Veronica

“Dear Steve,

I am currently involved in debt reduction on two of my 4 credit cards. We have been burned before with financial advice and people seeking us out , claiming to be on our side. I am looking for some good adivice.

I received a letter from the company Credit Relief Today. It has a case number and and says I could eliminate my unsecured debt my up to 50%. I spoke with a representative, John is his name, he gave me the website, his direct phone number in Sacramento Ca. , he told me the process and the difference between their company the the debt consolidators. I want to know if this company is for real for fraud. Could you help me find the answer?

there Sac. phone number is 916-873-1562. The letter has a heading of”
National Debt Relief Stimulus plan
address: Debt Servicing Division

Veronica”

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The Answer

Dear Veronica,

It sounds like a fairly typical mailer that I’ve reviewed before. See this article with samples.

I previously wrote about another similar program, the Consumer Debt Hardship Initiative, that was linked to Credit Relief Today as well.

Frankly I’m surprised Credit Relief Today is still at it with these mailers. There is no national debt relief stimulus plan. That’s just not true.

And the claims the sales representative made to you will be illegal as of September 27, 2010 under the new Federal Trade Commission telemarketing sales rules. See this guide as to what must be disclosed.

In looking at the Credit Relief Today site I can’t see how their process is different than that of every other debt settlement company. They say:

Settling of Your Debt. Once you have been enrolled into the program, the independent processing company will commence the Service. You will be advised of all good faith offers made by creditors and debt collectors, and of their acceptance of any offers made by the independent processing company. The independent processing company will not settle any account without your approval, and you have absolute discretion to accept or reject any settlement offer. A settlement can only be completed once the full funds are available in your settlement trust or savings account. – Source

In fact I’m left with a new concern after reading that on their site. Since they allude to an “independent processing company” I’m left wondering if Credit Relief Today is just a front-end marketing company trying to sell people debt settlement and not the company that would actually be able to service your account.

So I’m left with a few concerns and some homework for you.

My Concerns

  1. The mailer seems misleading.
  2. The savings estimates seem unfounded.
  3. The company seems it is a front-end marketing company and not the actually settlement provider.

Your Homework

  1. If you want to continue to pursue this option I suggest you ask them for a copy of any contract you would need to sign before you obligate yourself to anything.
  2. Let me know what their fee structure is and if the fees will be paid before settlements are actually achieved.
  3. Ask the sales representative for his “Good Faith” estimates of the services they will provide based on the new rules that begin soon.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

I Got a Letter From Credit Relief Today Claiming to Be Able to Eliminate My Debt Under the National Debt Relief Stimulus Plan.   Veronica
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I Got a Letter From Credit Relief Today Claiming to Be Able to Eliminate My Debt Under the National Debt Relief Stimulus Plan. - Veronica by

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Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • BOB

    WOULD YOU RECIPIENTS OF THIS DECEPTIVE LETTER PLEASE CONTACT AN ATTORNEY–THIS IS A POTENTIAL CLASS ACTION SUIT AND I AM SURE THESE PEOPLE WILL BE HELD LIABLE FOR VIOLATIONS OF CALIFORNIA’S UNFAIR BUSINESS PRACTICES ACT!!!!

  • Steve Rhode

    I do not think it is legit.

  • Deancincotta

    Stacey,

    I received the same letter. Do you think it’s legitimate? I’m really thinking about doing it but I’m so scared it’s a scam.

  • Joe_debt_jr

    Stacey try contacting your current CCCS to see what Advanta is willing to do. From my past experience I see Advanta drops their rates as low as a 0% but dont hold me to it because creditors change their guidelines alot. I wouldn’t recommend settling your debt just yet. worst case scenerio where you begin slipping away on your payments and you know for sure there is no way to catch up than settling makes sense. good news is that next month all debt settlement firm are required to collect their fees only after an account has been settled so you can actually get quicker results and lesson the chances of them taking you into court because they wouldn’t have to wait too long to make a settlement arrangement. as long is you case is legitimate and u are in severe hardship than getting settlement wouldnt be a bad choice. but if you do have enough funds to pay creditors each month but u feel its not enough to allow you to breathe, i suggest putting yourself on a very strict budget diet and cut back anything you feel is not necessary until your balances are paid off in full. hope this help.

  • Stacey

    And is this true as well? Found in a forum (http://www.thewealthyreview.co

    The problem with most debt relief companies is that there are up front fees and back end fees. As you are aware, they charge 10% up front. The problem is that they usually have no arrangements in place with your creditors, so they rely on you defaulting on your credit cards. They tell you not to pay your creditors anything, ignore the calls and letters. What typically happens is that the creditor usually charges the account off after 6 months, and either puts you through collections themselves or they sell the account to a debt buyer for pennies on the dollar. Then the debt buyer puts the account in collections.
    When you settle an account, if you save more than $600, the creditor send you a 1099-c for unearned income. You end up paying taxes on the money you saved.
    You also end up paying them another 10% of the money saved as a fee.
    Also, your credit score drops a minimum 45 points for each settlement.
    It’s a three way loss.
    1 – You end up paying someone a lot of money.
    2 – Your credit score takes a major hit/hits.
    3 – You have to pay the government.

  • Stacey

    And is this true as well? Found in a forum (http://www.thewealthyreview.com/debt-relief/has-anyone-had-a-good-or-bad-experience-with-debt-relief-companies-like-credit-relief-today/):

    The problem with most debt relief companies is that there are up front fees and back end fees. As you are aware, they charge 10% up front. The problem is that they usually have no arrangements in place with your creditors, so they rely on you defaulting on your credit cards. They tell you not to pay your creditors anything, ignore the calls and letters. What typically happens is that the creditor usually charges the account off after 6 months, and either puts you through collections themselves or they sell the account to a debt buyer for pennies on the dollar. Then the debt buyer puts the account in collections.
    When you settle an account, if you save more than $600, the creditor send you a 1099-c for unearned income. You end up paying taxes on the money you saved.
    You also end up paying them another 10% of the money saved as a fee.
    Also, your credit score drops a minimum 45 points for each settlement.
    It’s a three way loss.
    1 – You end up paying someone a lot of money.
    2 – Your credit score takes a major hit/hits.
    3 – You have to pay the government.

    • BOB

      WOULD YOU RECIPIENTS OF THIS DECEPTIVE LETTER PLEASE CONTACT AN ATTORNEY–THIS IS A POTENTIAL CLASS ACTION SUIT AND I AM SURE THESE PEOPLE WILL BE HELD LIABLE FOR VIOLATIONS OF CALIFORNIA’S UNFAIR BUSINESS PRACTICES ACT!!!!

      • JBROWN

        LOOKS LIKE Credit Relief Today IS OUT OF BUSINESS According to the bbb. Looks like their SCAMMING PEOPLE ASNationwide Financial Center, LLC and Consumer Benefits Division

      • http://GetOutOfDebt.org Steve Rhode

        You are correct. According to the BBB “According to information in BBB files, it appears that this company is no longer doing business in our area. If you have an unresolved dispute with this company you may wish to seek legal advice.”

  • Stacey

    I got the same letter addressed as Debt Servicing Division, 1101 Pennsylvania Ave NW 6th Floor, Wash. DC 20004. The guy I talked to was very helpful and spent nearly 45 minutes with me discussing my situation, options, pulled my credit report (and emailed it to me) as well as links to their site to research the company before making a decision. Currently I am in a Debt Consolidation program and am hesitant to again be late in order to qualify for settlement. Even so, my $1060/month payment to CCCS has difficult to pay and they’ve had to renegotiate my contracts with a couple of my card holders because I missed a payment and they booted me.

    I’m in marketing myself, so I point blank asked about the mailer and the “expiration date” and he as much admitted it was a marketing ploy. I asked them how they made their money and they take 10% of the original balance and spread over payments that are reasonable for you. He even said if the time came where it was difficult to pay (winter with raised heating bills for example) that I would be able to miss a payment and it would be added to the end of my term. They typically settle for around 30% though the sample letters on their site for my particular creditors are more 40 – 50%. He also said that being branded “under debt management” on my credit report was damaging too and that with them it would be changed to Paid or Settled. My consumer credit counseling agency said the “under debt management” would look better, that I was trying to be responsible.

    Anyway – here I am doing my research and I’ve come across a few concerning things that lead back to the creditrelieftoday.com site linked to “my guy’s” email address.

    I did find this: http://freedebtreliefreviews.c… and have since requested a quote from http://www.impactdebtsolutions.com which they rated #1. Do you have any thoughts on this particular company?

    I really need to find a lower payment solution, but I’ve already paid off 1/2 my debt over the last 2 years through CCCS (and their negotiated lower interest rates), 3 cards, and have an estimated 2 years left (which still amounts to an estimated $25K). I’ve paid my principle amount a couple times over when you add up the finance charges I was paying during the year I tried to do it on my own. (Advanta bumped me from 7.99% to 34.99% for no reason – I was current but close to my max – because “they periodically review accounts.”)

    Settlement sounds like it may be “too good to be true” and shirking my responsibility, bankruptcy is out of the question, and the credit counseling is working but at a slower pace and higher monthly payment than I can currently afford. I am trying. I was never late on anything until my little avanlance occurred in January 2008. What do you think?

  • Stacey

    I got the same letter addressed as Debt Servicing Division, 1101 Pennsylvania Ave NW 6th Floor, Wash. DC 20004. The guy I talked to was very helpful and spent nearly 45 minutes with me discussing my situation, options, pulled my credit report (and emailed it to me) as well as links to their site to research the company before making a decision. Currently I am in a Debt Consolidation program and am hesitant to again be late in order to qualify for settlement. Even so, my $1060/month payment to CCCS has difficult to pay and they’ve had to renegotiate my contracts with a couple of my card holders because I missed a payment and they booted me.

    I’m in marketing myself, so I point blank asked about the mailer and the “expiration date” and he as much admitted it was a marketing ploy. I asked them how they made their money and they take 10% of the original balance and spread over payments that are reasonable for you. He even said if the time came where it was difficult to pay (winter with raised heating bills for example) that I would be able to miss a payment and it would be added to the end of my term. They typically settle for around 30% though the sample letters on their site for my particular creditors are more 40 – 50%. He also said that being branded “under debt management” on my credit report was damaging too and that with them it would be changed to Paid or Settled. My consumer credit counseling agency said the “under debt management” would look better, that I was trying to be responsible.

    Anyway – here I am doing my research and I’ve come across a few concerning things that lead back to the creditrelieftoday.com site linked to “my guy’s” email address.

    I did find this: http://freedebtreliefreviews.com/ and have since requested a quote from http://www.impactdebtsolutions.com which they rated #1. Do you have any thoughts on this particular company?

    I really need to find a lower payment solution, but I’ve already paid off 1/2 my debt over the last 2 years through CCCS (and their negotiated lower interest rates), 3 cards, and have an estimated 2 years left (which still amounts to an estimated $25K). I’ve paid my principle amount a couple times over when you add up the finance charges I was paying during the year I tried to do it on my own. (Advanta bumped me from 7.99% to 34.99% for no reason – I was current but close to my max – because “they periodically review accounts.”)

    Settlement sounds like it may be “too good to be true” and shirking my responsibility, bankruptcy is out of the question, and the credit counseling is working but at a slower pace and higher monthly payment than I can currently afford. I am trying. I was never late on anything until my little avanlance occurred in January 2008. What do you think?

    • Anonymous

      Stacey try contacting your current CCCS to see what Advanta is willing to do. From my past experience I see Advanta drops their rates as low as a 0% but dont hold me to it because creditors change their guidelines alot. I wouldn’t recommend settling your debt just yet. worst case scenerio where you begin slipping away on your payments and you know for sure there is no way to catch up than settling makes sense. good news is that next month all debt settlement firm are required to collect their fees only after an account has been settled so you can actually get quicker results and lesson the chances of them taking you into court because they wouldn’t have to wait too long to make a settlement arrangement. as long is you case is legitimate and u are in severe hardship than getting settlement wouldnt be a bad choice. but if you do have enough funds to pay creditors each month but u feel its not enough to allow you to breathe, i suggest putting yourself on a very strict budget diet and cut back anything you feel is not necessary until your balances are paid off in full. hope this help.

    • Deancincotta

      Stacey,

      I received the same letter. Do you think it’s legitimate? I’m really thinking about doing it but I’m so scared it’s a scam.

      • http://GetOutOfDebt.org Steve Rhode

        I do not think it is legit.

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