National Debt Relief Review: How Their Debt Settlement Program Works (2024)

The deeper you sink into debt the harder it is to reclaim a sense of financial stability. If you’re drowning in high-interest credit card debt and have unpaid bills in collections, debt settlement might be the right option.

Debt settlement comes with its fair share of pros and cons. When it works, you can get out of paying a lot of money, but there are some downsides.

Your credit will suffer, and your savings may not add up to what you had in mind. This is thanks in part to federal taxes on forgiven debt, late payment penalties added to your balance and fees charged by NDR for negotiating your debt.

Let’s dig a bit deeper into National Debt Relief’s promising claims to find out if it’s the wisest solution for reducing your debts.


  • Type of Debt Relief –Debt settlement
  • Eligibility & Requirements –Minimum debt amount of $7,500
  • Fees –18%-25% of enrolled debt. Fees vary by state
  • Credit score impact –Score could drop by 100 points or more
  • Consumer Reviews –A-plus rating with BBB

How National Debt Relief’s Program Works

First, National Debt Relief reviews your credit history to make sure you’re eligible. There is no minimum credit score requirement, but keep in mind NDR can only settle unsecured debt like credit cards or personal loans. It can’t do a thing about your mortgage or auto loan.

If you’re eligible for the program, you will begin depositing money into an escrow account, which only you have access to. National Debt Relief won’t start negotiations with your creditors until the escrow account has reached a certain amount, usually around 25% of the debt owed.

This is not a fee. Once NDR and your creditors reach an agreement, the escrow funds are withdrawn and handed over to your lenders. This usually falls short of the total amount your creditors were willing to settle for.

This means you’ll have to make monthly payments to National Debt Relief for a period before you’re in the clear. How much you’ll pay depends on many factors, but clients typically take 24-48 months to complete the program.

You will be advised not to pay your debts while negotiations are ongoing, and this will sink your credit score. However, if you’re considering debt settlement, your credit score is likely near the bottom of the barrel already. It may be worth the negative marks if you can save enough money. National Debt Relief claims it can reduce debt by up to 50%.

» Learn more: How Debt Relief Programs Work

National Debt Relief Eligibility & Requirements

There is no credit score requirement to be considered for National Debt Relief. You must, however, have at least $7,500 in outstanding, unsecured debt.

Before NDR can begin negotiating your debt, you must make a deposit into an escrow account. This means you will need some cash upfront to complete the program. The amount you need is a fraction of the debt you owe; the larger the debt you’re trying to clear, the more cash you will need to deposit in the escrow account before negotiations can begin.

This money will be used to pay off your debt. When National Debt Relief reaches an agreement with your creditors, the money goes directly to them.

Fees for National Debt Relief’s Services

National Debt Relief charges a fee of 18%-25% of enrolled debt. This means if you came into the program with $20,000 in debt, expect to pay NDR between $3,600 and $5,000 in fees. There may be additional service or maintenance fees to pay depending on your state.

Keep in mind that in 2010, the Federal Trade Commission (FTC) made it illegal for debt settlement companies to charge upfront fees. If a company tries to weasel your credit card number out of you before establishing your eligibility for the program, it’s probably a red flag.

Pros & Cons of debt settlement with National Debt Relief

National Debt Relief offers consumers a chance of eliminating large chunks of their debt. If you’re drowning beneath waves of high-interest debt, participating in NDR’s debt settlement program could help steer you away from a costly bankruptcy.

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.

Pros of National Debt Relief

  • Eliminate up to 50% of debt
  • A-plus BBB rating
  • Puts a stop to debt collection calls

Cons of National Debt Relief

  • The forgiven debt is subject to income tax
  • Creditors are not obligated to settle
  • Fees of up to 25% of the enrolled debt
  • Remains on a credit report for seven years
  • Minimum debt amount of $7,500 needed to qualify
  • Can’t negotiate secured debts

Is National Debt Relief Right for Me?

Debt settlement is a gamble. It’s not for everybody, but it shouldn’t be dismissed outright. Just don’t let the benefits suck you in without considering the whole picture.

National Debt Relief is for consumers with over $7,500 in unsecured debt, who have exhausted all other debt-relief options apart from bankruptcy.

If you don’t settle the debt, you will continue paying late fees and racking up interest as your credit score plummets. If you settle, you still have fees and taxes to pay, but you will 1) be free of all unsecured debt, and 2) be on the right track towards improving your credit score.

Here’s an example that may help you decide if National Debt Relief is right for you.

Say you have $10,000 in debt and NDR gets it chopped down to $5,000. Great, right? Now, consider how much of that forgiven 5k you get to keep.

You have to pay taxes on the forgiven debt. The amount you pay usually corresponds with your tax bracket.

If you’re in the 24% bracket that means you will pay $1,200 to the IRS (24% of $5,000=$1,200). National Debt Relief may take up to 25% of the enrolled debt, which means they’ll keep up to $2,500.

In this example, NDR saves you $5,000, but $3,700 will be gobbled up by unavoidable taxes and fees. That leaves you with $1,300 in savings.

Depending on your situation, walking away with a couple of grand may not be worth a scarred credit report.

National Debt Relief’s program would work better for 5 or 6 figure debt, especially when paired with the lower end of NDR’s fee scale.

If you had $60,000 of debt reduced to $30,000 and a chunk of that got swallowed by NDR and IRS, you’d still have saved $12,000, which by many standards is a lot of money.

Alternatives to National Debt Relief

National Debt Relief won’t work for everybody. Many consumers won’t find a damaged credit report worth the limited savings. Luckily, there are several alternatives for dealing with your debts.

Debt Management

A debt management plan is a repayment option where you pay creditors through a third-party debt management company that acts as an intermediary. The plan lasts three to five years. All your eligible debts are consolidated into one and you make a payment every month to the debt management company. The main difference between debt management and debt settlement with National Debt Relief is that with debt management, you still have to repay your debt in full. However, it won’t have nearly the tarnishing effect on your credit report that debt settlement will.

DIY Debt Settlement

It is possible (and cheaper) to complete debt settlement yourself. Contact your creditors and inform them of your desperate situation. You need to convince them they won’t get paid unless they accept a partial amount of what you owe. Be prepared with proof of assets, credit accounts, and financial statements. They probably won’t just take your word for it. Keep in mind DIY debt settlement still will ravage your credit report, but you won’t have to share your savings with anybody, aside from the IRS, that is.

Freedom Debt Relief

A debt settlement company that offers services similar to National Debt Relief. Freedom Debt Relief does offer services such as credit counseling to help you manage your money.

National Debt Relief Reputation & Consumer Reviews

Consumer reviews on National Debt Relief are a mixed bag. Many find it hard to glean information about the program without first providing sensitive information or undergoing a soft credit pull. Others claim NDR does not deliver what it promises. Some consumers feel they were misled by NDR and feel it failed to disclose just how much it would be taking in fees. Some were not made aware they’d have to pay federal income taxes. The main problems seem to be misinformation and lack of communication.

National Debt Relief is a real company working to eliminate consumer debt, but there are more than a few strings attached. Don’t start adding up your savings without first considering the taxes and fees you will owe and the impact on your long-term credit history.

Don’t expect to be in the clear after a phone call. The process takes time and patience, and though debt settlement comes with drawbacks, its benefits outshine at least one alternative. NDR may not be all it’s cracked up to be, but in many cases, it still beats bankruptcy.

National Debt Relief Review: How Their Debt Settlement Program Works (2024)
Top Articles
Latest Posts
Article information

Author: Margart Wisoky

Last Updated:

Views: 6021

Rating: 4.8 / 5 (78 voted)

Reviews: 93% of readers found this page helpful

Author information

Name: Margart Wisoky

Birthday: 1993-05-13

Address: 2113 Abernathy Knoll, New Tamerafurt, CT 66893-2169

Phone: +25815234346805

Job: Central Developer

Hobby: Machining, Pottery, Rafting, Cosplaying, Jogging, Taekwondo, Scouting

Introduction: My name is Margart Wisoky, I am a gorgeous, shiny, successful, beautiful, adventurous, excited, pleasant person who loves writing and wants to share my knowledge and understanding with you.