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Home > Ask The Get Out of Debt Experts > I’m Think About Using National Debt Relief. How Will It Hurt Me? – Steven

I’m Think About Using National Debt Relief. How Will It Hurt Me? – Steven

“Dear Steve,

I am reaching a point with my debt that I am unable to get out from under. I am maxing out and while I can current on all cards and making more than the minimum payment, am never going to get out from under given that my current income is only about half of what I use to make. My personal current credit card debt is about $88,000.

I first looked into debt consolidation loan but loans in amounts larger than $50,000 carry very high interest rates unless securitized. I am unable to do that.

So I am thinking of going the debt settlement route. I am looking at using National Debt Relief located at 11 Broadway NYC. What is their reputation? What should I be looking for in the offer that they will present to me? Will I be able to keep 1 or 2 cards that I pay off myself so I have some credit? How damaged will my credit score become (it is currently at 738).?

Thanks Steven”

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The Answer

Dear Steven,

Im Think About Using National Debt Relief. How Will It Hurt Me?   StevenA couple of things you might want to research. Here are some of the past articles about National Debt Relief.

Your statement about expensive debt consolidation loans probably needs a bit more research. Groups like Lending Club offer very low rates depending on your situation.

And before you become fixated on a solution you should first determine what is the right solution based on your situation and moving forward.

I’d suggest you first read this, this, and this. They will give you a great overview of what we need to deal with to get you moving in the right direction.

Then read my guide 8 Easy Steps to Eliminate Your Debt Checklist and use the free How to Get Out of Debt Calculator to review your options.

I would recommend that anyone considering using a debt relief company should read the following free guides.

  1. The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line
  2. 10 Must Do Steps to Find the Best Credit Counseling or Debt Settlement Company for You
  3. How to Check Out a Business or Company to Avoid Getting Scammed or Ripped Off

I think that’s really the smartest way to figure out what to do and what to look for when it comes to help. Bankruptcy should never be excluded.

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

Big Hug!

Im Think About Using National Debt Relief. How Will It Hurt Me?   Steven
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If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

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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.
  • Steven

    Hey Steve–

    I did a lot of research on a lot of debt settlement companies and National Debt Relief (“NDR”) came out on top for being legitimate. I had then send over their agreement covering their services and by the time I plowed through the fine print of a 26 page document.. There were several things I did not like regarding the arrangement but most importantly I thought the fee structure to be unfair and to my disadvantage. I have hired lawyers based on an hourly rate and I have hired lawyers base on a % of proceeds gained from trial or settlement and for non-adversarial work (such as a will, trust document, corporate filings) I have accepted a flat rate for the work requested. But I have never heard of paying a fixed percentage of the total liability a debtor is seeking to settle.

    NDR wants a fee of 20% of the debt you are seeking to settle. So if you are seeking to settle 80,000 of outstanding debt, they want a fee equal to $16,000. This does not provide any incentive to get the best (the biggest discount) of the outstanding amount. I was quite frankly shocked as I had been expecting to see a fee base on a percentage of the amount discharged by the creditors in reaching a settlement. I would have been fine paying 33% or even 35% of the amount written off by the creditors when settling. Settling the debt I propose involves only three creditors.

    So I got to thinking why couldn’t I do settlement myself? I know it means you first must stop paying the credit cards. It also means putting aside as much money as possible in an a separate account to build up “settlement war chest” so you have something to offer in settlement in exchange for a full discharge and release. And I am sure I would benefit getting further professional advice as to how to proceed on my own. There are advisers for do-it-yourself debt settlers. Do you have recommendations? What do you know/think of http://consumerrecoverynetwork.com/ and/or http://www.zipdebt.com/?

    Thanks in advance again! Steven

    • http://GetOutOfDebt.org Steve Rhode

      First off, is debt settlement even the most appropriate solution based on your situation?

      There are far less expensive solutions out there than 20% of debt. I’d suggest you look for a company that is motivated by a percentage of savings instead if you do decide to go that route.

      You did mention some of the debt settlement outfits out there that can assist you with coaching you through settling your debt for a fraction of the price others charge. Contact them and see what you think.

      You might also want to make sure you read my guide on debt settlement to make sure you understand the pros and cons. http://getoutofdebt.org/51523/debt-settlement-is-credit-card-debt-relief-really-possible-if-you-settle-pros-and-cons

      Please forward the NDR agreement to me, I’d love to review it. http://getoutofdebt.org/confidential-tip-form/

    • http://www.zipdebt.com/ Charles Phelan

      Steven, please feel free to pop over to ZipDebt.com and request the free phone consultation with me. I’d be happy to discuss the pros and cons with you. I’m the first to admit that settlement is not the right answer for everyone with a debt problem. It’s best viewed as an alternative to Ch. 13 BK, but even then there are trade-offs to be discussed and understood before you make a final decision on strategy.

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