TurboDebt Review 2024: Real Costs, Customer Complaints & Better Options

TurboDebt operates as a debt settlement company partnered with National Debt Relief. That partnership matters because it means you're paying National Debt Relief's fee structure: up to 25% of your total enrolled debt. On $20,000 in credit card balances, that's a $5,000 fee.

The company launched recently but already has 2,300+ Google reviews averaging 4.8 stars. That sounds impressive until you read the complaints: customers blindsided by fees, credit score damage they didn't expect, and collection lawsuits that kept coming during the settlement process.

This review covers what TurboDebt actually does, what it costs, and whether you should hire them or negotiate debts yourself.

What TurboDebt Does (and Doesn't Do)

TurboDebt negotiates with creditors to reduce your total debt balance. You stop paying creditors directly and instead deposit money into a dedicated account. Once enough accumulates, TurboDebt attempts to settle each account for less than you owe.

The timeline they advertise: 24 to 48 months to complete the program.

What they don't advertise up front:

• Your credit score will drop as accounts go delinquent
• Creditors can still sue you during the settlement process
• You'll pay fees even if some debts don't settle
• Forgiven debt over $600 counts as taxable income

TurboDebt isn't a law firm. They can't represent you in court if a creditor files a lawsuit. They negotiate, but only after you've stopped paying your bills long enough to make creditors willing to settle.

TurboDebt Fee Structure: The 25% Reality

TurboDebt charges 15% to 25% of your enrolled debt amount. The exact percentage depends on your state and the total you owe. For context:

• $10,000 enrolled: $1,500 to $2,500 in fees
• $25,000 enrolled: $3,750 to $6,250 in fees
• $50,000 enrolled: $7,500 to $12,500 in fees

These fees come out of the dedicated account you fund each month. Your money goes to fees first, then to settlements. That means early in the program, you're paying TurboDebt while your creditors keep calling.

Some states cap debt settlement fees. California limits fees to 15% of the original debt or 25% of the savings achieved, whichever is less. Check your state's rules before signing anything.

Hidden Costs You'll Encounter

The 25% fee isn't the only cost:

• Account maintenance fees: The third-party company holding your settlement funds charges monthly fees, often $10 to $15
• Late fees and penalty interest: While you're not paying creditors, balances grow with penalties
• Tax liability: If TurboDebt settles a $10,000 debt for $4,000, you saved $6,000. The IRS may treat that $6,000 as income
• Credit repair costs: Once the program ends, you might hire a credit repair service to rebuild your score

Customer Complaints: What Goes Wrong

Most negative TurboDebt reviews fall into three categories.

1. Fee Shock

Customers report sales reps who downplay fees during the initial consultation. One reviewer wrote: "I didn't realize 25% meant $6,000 until I saw my account balance wasn't settling anything."

Ask for fee breakdowns in writing before enrolling. If a rep dodges your questions about costs, that's a red flag.

2. Credit Score Crashes

Debt settlement requires you to stop paying creditors. Each missed payment tanks your credit score. Accounts go 30, 60, 90, then 120+ days delinquent. Expect your score to drop 100 to 200 points during the program.

Some customers claim TurboDebt reps minimized this impact. One review: "They said my credit would recover fast. Two years later I still can't get approved for an apartment."

3. Lawsuits During Settlement

Creditors don't have to wait for your settlement offer. They can sue you the day you miss a payment. TurboDebt can't stop lawsuits or represent you in court.

If a creditor gets a judgment, they can garnish your wages or freeze your bank account. That derails the entire settlement plan. About 15% of consumers in debt settlement programs get sued before completing the program, according to industry data.

TurboDebt vs. National Debt Relief: Same Company, Different Name

TurboDebt operates as a partner of National Debt Relief. In practice, that means TurboDebt's sales team signs you up, but National Debt Relief handles the negotiations and backend operations.

National Debt Relief has 4,500+ Google reviews with a 4.6-star average. The complaints mirror TurboDebt's: surprise fees, credit damage, and lawsuits that blindside customers.

Both companies offer legitimate services. They do negotiate settlements. But "legitimate" doesn't mean "best option for you." You're paying thousands of dollars for work you could do yourself with the right information.

When Debt Settlement Makes Sense

Debt settlement works in specific situations. You might benefit if:

• You owe $10,000+ in unsecured debt (credit cards, medical bills, personal loans)
• You're already behind on payments or about to fall behind
• You can't afford minimum payments even after cutting expenses
• Bankruptcy would harm you more than damaged credit (for example, you'd lose professional licenses)
• You have a lump sum or steady income to fund settlements over 2-4 years

Debt settlement doesn't work for secured debts like car loans or mortgages. It also fails if you can't consistently deposit money into the settlement account.

DIY Debt Settlement: Skip the 25% Fee

You can negotiate settlements without paying a company. Creditors talk to consumers directly. Here's the process:

Step 1: List Your Debts

Write down every unsecured debt: creditor name, balance, interest rate, and minimum payment. Total the amounts.

Step 2: Open a Dedicated Savings Account

Stop paying creditors and instead deposit what you can afford into a savings account you control. This becomes your settlement fund. Aim for 40% to 60% of each debt's balance.

Step 3: Wait for Charge-Off

Creditors typically consider accounts uncollectible after 180 days of non-payment. Once charged off, they're more motivated to settle. Your credit takes a hit during this time, same as with TurboDebt.

Step 4: Make Settlement Offers

Call the creditor or the collection agency that bought your debt. Offer 40% to 50% of the balance as a lump sum. Say: "I can pay $2,000 to settle this $5,000 debt in full. I need a settlement agreement in writing."

They'll counter. Negotiate. Land somewhere between 40% and 60% in most cases.

Step 5: Get It in Writing

Never send money without a written agreement stating the payment settles the debt in full. Creditors have been known to accept payments and still claim you owe the rest.

Keep copies of everything: settlement letters, payment confirmations, and account statements showing zero balances.

Step 6: Handle the Tax Form

If you settle a debt for $600+ less than the original amount, the creditor sends you a 1099-C form. That forgiven debt counts as income. Budget for the tax bill or file IRS Form 982 if you're insolvent.

What About Bankruptcy?

Chapter 7 bankruptcy wipes out most unsecured debts in 3 to 4 months. You pay a filing fee ($338) and attorney fees ($1,000 to $2,000 in most areas). That's often less than a debt settlement company charges.

Bankruptcy hits your credit hard, but so does debt settlement. The difference: bankruptcy ends faster and gives you legal protection from lawsuits and wage garnishment.

You might qualify for Chapter 7 if your income is below your state's median or if you pass the means test. If you're drowning in debt and TurboDebt's 24-month timeline sounds optimistic, check if bankruptcy is faster and cheaper.

How to Choose a Debt Settlement Company (If You Must)

If DIY settlement feels overwhelming and bankruptcy isn't right, vet any company carefully:

• Check state licensing: Debt settlement companies need licenses in many states. Verify yours at your state attorney general's website
• Demand fee transparency: Get the percentage, monthly account fees, and timeline in writing before signing
• Ask about lawsuits: What happens if a creditor sues you mid-program? Will they refund fees?
• Read the contract: Look for cancellation terms and refund policies. Some companies keep fees even if you quit early
• Search complaint databases: Check the Better Business Bureau and the Consumer Financial Protection Bureau's complaint database

If a company pressures you to sign immediately or dodges questions about costs, walk away.

TurboDebt Alternatives

You have other options beyond hiring TurboDebt:

• Nonprofit credit counseling: Agencies accredited by the National Foundation for Credit Counseling offer debt management plans with lower fees (often under $50/month). You pay creditors in full but with reduced interest rates
• Debt consolidation loans: If your credit is still decent, a personal loan at a lower interest rate can simplify payments. You avoid settlement damage
• DIY settlement: Negotiate directly as outlined above
• Bankruptcy: Chapter 7 for fast debt elimination or Chapter 13 for a court-supervised repayment plan

Each option damages credit differently and costs different amounts. Run the numbers for your situation.

The Bottom Line on TurboDebt

TurboDebt will negotiate your debts, but you'll pay up to 25% of the enrolled amount for that service. Your credit score will suffer, creditors may sue you during the process, and you'll face a tax bill on forgiven debt.

The company's positive reviews come mostly from customers who understood these trade-offs and had smooth settlements. The negative reviews come from customers caught off guard by fees, lawsuits, or credit damage.

Before hiring TurboDebt or any settlement company, see if bankruptcy makes more sense for your situation. It's often faster, cheaper, and more final than settlement. If bankruptcy isn't right and you can handle negotiations, DIY settlement saves you thousands in fees.

If you decide TurboDebt fits your needs, go in with eyes open: get every fee in writing, prepare for credit score damage, and have a plan if a creditor sues mid-program.