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I Just Spent an Hour Talking to Nationwide Debt Direct. – Yohanes

“Dear Steve,

I’m in debt for $42k+. I have been transferring the balances (0% 12 months) from one card to the other, but it’s catching up with me now.

Just talked to debt settlement company for more than an hour called Nationwide Debt Direct. Googled it and your website mentioned about this company. Same address for formerly F-rated BBB company. Seems legit to me, will settle my debt from $42k to $24k with $667/month fixed for 36 months.

What do you think?

The account manager said that the success rate of the negotitation with B of A, Citibank, and Chase is high. They will be compensated on the forgiven amount through money from TARP Funding. Make sense to me, but you know this business better.

Thanks in advance.

Yohanes”

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The Answer

Dear Yohanes,

I’m curious what your expectation is in entering into the debt settlement approach. If you don’t have the cash on hand to settle quickly then you will wind up in collections and potentially be sued before your debt is settled. It’s just a possibility you need to be aware of.

I’m not sure if you’ve reviewed your major debt relief solutions. Feel free to use the free How to Get Out of Debt Calculator to review your options.

In reviewing the options presented on the Nationwide Debt Direct website, I do have some concerns. It appears they are trying to talk you out of other possible options in order to sell you a debt settlement solution.

They say, “Nationwide Debt Direct provides one of the strongest proven debt-elimination processes to help you become debt free in as little as 12-36 months!” But I find that hard to believe. As far as I’m aware, only bankruptcy has the power of a legal process behind it to discharge your debt. That seems to me to be the “strongest” technique. Additionally, I’d ask Nationwide Debt Direct to provide you with a written good faith estimate and documentation to support their performance claims. The FTC has very strict guidelines on such matters.

They also appear to be using the same tired old message to try to discredit bankruptcy when they say:

We at Nationwide Debt Direct believe that bankruptcy should only be considered as a last resort to resolving debt situations. We feel this way because a bankruptcy filing may legally remain in your credit report for up to ten years under the Fair Credit Reporting Act. Additionally, in 2005 Congress passed new bankruptcy laws which make it more difficult to file for bankruptcy. – Source

Bankruptcy is not a “last resort” as they say. It is a possible solution in the mix of all options to deal with debt. In some cases it clearly should be a first resort.

While they say that bankruptcy will be reported for ten years, what they don’t say is that only a Chapter 7 bankruptcy will be reported for ten years. A Chapter 13 bankruptcy will be reported for seven years, the same length of time that debt forgiveness and collection activity that typically follows a debt settlement approach will be.

The solutions page of the Nationwide Debt Direct site only focuses on debt settlement. – Source.

While you may ultimately decide to use the services of Nationwide Debt Direct, it seems that you owe it to yourself to fully investigate your other options in order to make an informed decision that is right for you.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

I Just Spent an Hour Talking to Nationwide Debt Direct.   Yohanes
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About Steve Rhode

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.
  • AllLovesLost

    I enrolled in Nationwide Debt Direct and had a very bad experience with this company. I have 30,000 in credit card debt and I spent over an hour on the phone with a rep for the company, who convinced me I had no other options, that this was the best route for me, but he purposefully withheld the fact that my disability income is protected by law, and creditors cannot take that money. Therefore, there was no reason for me to even do this in the first place. If he had been honest and forthcoming with the information he knew, I would not have joined, and I would not have lost over $1834 to this company in just four months. He knew that information, too, though, and played on my fears, promising me relief from a situation that was stressing me out, in order to sway me in the direction of using this company.
    I want to make it clear that this company has a very deceptive contract. They lead you to believe that you will only have to pay them a one-time fee of $542, but noone sits down with you with the contract and makes it clear that you are actually paying them a little more than $4600 for the services they provide, which you can actually do for free yourself. Many credit card companies will offer you a debt reduction that is more than what this company claims they will get you. It does not state how much they charge you clearly in the contract. Even if you do not have disability income, I want to urge anyone considering going with this company to make sure you realize the actual fees they are charging you, which noone flat out tells you. Not the rep who makes you feel relief that you will get out of debt quickly. Not the “independant contractor” who brings the paperwork for you to sign, but doesnt answer any questions because they “don’t work for the company”. Sneaky, sneaky, sneaky.
    When I spoke with an attorney a couple days ago and learned what my real options were, I called Nationwide Debt Direct to cancel the contract I signed four months ago, and that is when I was told I would not be allowed to have any of the money they had been withdrawing from my checking account for the past four months back. $1834 lost to them, and they did nothing for me. I have no recourse because their shady contract protects them in the fine writing. I could have paid so many bills with that money, and now Nationwide Debt Direct gets to keep it, with no work done on their behalf, just because they deceived me.
    I honestly have to recommend anyone considering this company to find other answers, contact the credit card companies yourself and see what they are willing to offer you. They start at 40% and are willing to go even lower than that. The credit card companies sell your debt to collection agencies for pennies on the dollar, and the collection agencies are able to lower the debt a significant amount, and still make money on it. If you do consider going with this company, make sure you call them out on the fact that THEY ARE ACTUALLY CHARGING YOU $4600 over the course of those three years, and not the one time administrative fee that they lead you to believe. Thank you.

  • He Who Has The Gold Guy

    Steve, you obviously have very little knowledge when it comes to the financial services industry (especially debt reduction). Bankruptcy, unless you can qualify for a Chapter 7 is the absolute worse option for any logical thinking, financially responsible consumer to take. It will ruin your credit for 7 to 10 years  and the notation that is placed on your credit report becomes permanent. Chapter 13 will only reduce the interest on the debt, NOT THE DEBT ITSELF….that’s why the term is longer than most debt settlement or debt reduction programs. Debt Consolidation and Consumer Credit Counseling programs are the exact same thing as bankruptcy except the term is usually shorter and 85% of consumers who enroll in those programs generally fail to complete them because they think that reducing interest will get them out of debt. THE ONLY WAY TO IMPROVE CREDIT IS TO REDUCE THE DEBT ITSELF, NOT THE INTEREST!!!!

    • http://GetOutOfDebt.org Steve Rhode

      You would be incorrect on a number of levels.

      Your assumption that bankruptcy is the worst option is an uninformed statement. There are a number of situations in which bankruptcy is the best and most logical solution. Your statements about the impact on the credit following bankruptcy are incorrect as well. While the bankruptcy will be reported on the consumer credit report for those lengths of time it is quite possible to rebuild great credit in 2-3 years.

      Your statement about chapter 13 reducing the interest and not the debt is again, incorrect.

      You seem to be promoting a debt settlement solution as a better way, and in cases where people have cash on hand to settle now, it might be. But that will also have a 7 year impact on the credit report as well.

      Please come back when you’ve learned more.

  • VicDiver

    I recently talked to a salesman from Nationwide Debt Direct.  The bottom line is that they have you set up a “Trust Account” in a bank and put your credit payments into that instead of paying the credit card companies.  Once you and a bunch of other people accumulate maybe 30% of your debt, they go to the credit card company and try to get them to accept the 30% and write off the rest.  The problem is that this is not a legitimate process and has no up front process with the credit card companies- with the likely result that credit is severely damaged and with the credit agencies vigorously pursuing the debt, possibly suing for it, etc..  very very messy and can not be guaranteed that the credit card companies will accept it.  There are likely more constructive and legitimate means of dealing with the debt if need be.

    • http://www.consumerrecoverynetwork.com/ Michael

      Hi Vic,

      Your comment stated:

      “The problem is that this is not a legitimate process and has no up front
      process with the credit card companies- with the likely result that
      credit is severely damaged and with the credit agencies vigorously
      pursuing the debt, possibly suing for it, etc.”

      You just summed up a debt settlement plan really well. Other than the inference that settlement is not a legitimate option, I agree with you. The thing is, settlement in the right situation may be the best most constructive option available to someone who is struggling with debt. It can provide relief relatively quickly and a better recovery for creditors over consumers filing for bankruptcy.

  • VicDiver

    I recently talked to a salesman from Nationwide Debt Direct.  The bottom line is that they have you set up a “Trust Account” in a bank and put your credit payments into that instead of paying the credit card companies.  Once you and a bunch of other people accumulate maybe 30% of your debt, they go to the credit card company and try to get them to accept the 30% and write off the rest.  The problem is that this is not a legitimate process and has no up front process with the credit card companies- with the likely result that credit is severely damaged and with the credit agencies vigorously pursuing the debt, possibly suing for it, etc..  very very messy and can not be guaranteed that the credit card companies will accept it.  There are likely more constructive and legitimate means of dealing with the debt if need be.

  • Jasonwright11

    Yohanes, I also talked to Nationwide Debt direct back in May. I am currently enrolled in their program. All these questions made a bit nervous. I can tell you this, their customer service is really good. They have always returned my calls and made me feel important. I have four credit cards total about 43 thousand dollars…. I know that seems bad but I just didnt feel right filing for a bankruptcy. My brother in law is a Bankruptcy lawyer and he told me to call a debt relief program. We checked out several but felt best with nationwide debt. I have paid one account off already. It was my smallest one. balance about 5400.My settlement offer and pay off when it was all finished was 1697.Im feeling good about that to say the least. It would have taken me a couple years to pay that off on my own. I am getting some money back from taxes so they have already forwarded me another offer from CHASE. I cant accept it yet but it was very fair as well. So far so good. Yohanes, All I can say is my brother in law was right…he told me that the internet is full of marketing and everybody has an agenda.Ask for examples of settlement offers from the company. That is proof and way more powerful than taking someones word. Heck, doesnt take a genius to realize, even our friend here, ” get out of debt guy” has ads all over his page. He obviously get some marketing kick back from those companies. I saw a 20/20 special on the news where evern the BBB is being sued by attorney generals…That is why I go to the source on these things and just ask for document proof of their program working. Hope this helps

    • Merlotplyr9

      Jason,

      Are you having creditor’s calling you for payment. They said legally you don’t have to talk to them. Just curious…I wonder how long they will keep calling?