National Debt Relief Screwed Me: What to Do Next

Debt settlement sounds great when you’re drowning in bills. National Debt Relief and similar companies make big promises. But many people discover the risks too late.

You still have options. You can fix your debt problems with the right information and strategy.

Respond to Your Debt Lawsuit in 15 Minutes

Being sued for debt? Don't let the court enter a default judgment against you. Our partner Solo helps you file your Answer quickly and negotiate settlement from a position of strength.

Respond Now

What Is Debt Settlement?

Debt settlement reduces the amount you owe to creditors. The goal is to negotiate a lower payoff amount. You can negotiate yourself or hire a company to do it.

Debt settlement companies contact your creditors. They try to convince them to accept less than the full amount. In exchange, the creditor stops collection efforts.

Companies like National Debt Relief handle these negotiations. They promise to lower your debt by 30% to 50% or more.

How Debt Settlement Companies Operate

You provide details about your debts. The company estimates how much they can reduce your balance. They calculate monthly payments into a separate account.

Here’s the catch: your debt must be delinquent to qualify. The company tells you to stop paying your creditors completely. Instead, you deposit money into their special account.

You save for months or even a year. Only then does the company start negotiating. Once they reach a deal, they pay your creditor from your saved funds. They keep a percentage as their fee.

Want a better approach? Our partner Solo offers a tech-based settlement solution. You maintain control and keep your financial information secure throughout the process.

The Hidden Risks of Debt Settlement Programs

Debt settlement should be your last resort. The risks can make your situation worse.

Your Credit Score Takes a Major Hit

Stopping payments destroys your credit score. The debt settlement company tells you not to pay creditors directly. Your accounts get marked as unpaid every single month.

Your credit score drops steadily. Negotiations can drag on for years. During that time, penalties and interest keep piling up. Your debt actually grows larger.

There’s no guarantee the creditor will even agree to settle.

You Face More Fees, Taxes, and Delays

Forgiven debt counts as taxable income. The IRS treats it as money you earned. Money in your settlement account might also be taxable.

Debt settlement companies charge 15% to 25% of your enrolled debt. Some add extra fees. Avoid companies demanding upfront payment before settling anything.

Successful negotiations often stretch payments over many years. People get frustrated and quit. That’s when everything falls apart.

What to Do When Debt Settlement Fails

Failed debt settlement leaves you worse off. Your debt is bigger from accrued interest and penalties. Your credit score is trashed from missed payments.

But you can exit the program. National Debt Relief allows cancellation anytime. You won’t pay penalties or cancellation fees. You get your saved money back.

Now you need a better strategy.

Consider Bankruptcy Protection

Bankruptcy stops creditor harassment immediately. Some debts get permanently erased from your credit records.

Bankruptcy has consequences though. It stays on your credit report for seven to 10 years. Certain debts like child support can’t be discharged. Cosigners become responsible for your debts.

You might qualify for Chapter 7 or Chapter 13 bankruptcy. Speak with a bankruptcy attorney for free to explore your options.

Use a Debt Management Plan

Debt management plans create realistic payment schedules. They factor in your actual income and expenses. Credit counseling agencies often negotiate lower interest rates and waived fees.

You make one monthly payment to the agency. They distribute funds to your creditors according to the plan. Your creditors stop collection calls and lawsuits.

Negotiate Directly With Creditors

You can settle debt yourself. Many creditors prefer negotiating over sending debts to collections. Delinquent debt motivates them to accept less.

Explain why you fell behind. Ask for a hardship program or payment plan. Most creditors will work with you if you communicate honestly.

How to Respond If You’re Already Being Sued

Being sued for debt requires immediate action. Ignoring a lawsuit guarantees you’ll lose. The court will enter a default judgment against you.

You must file an Answer with the court. An Answer is your written response to the lawsuit. It denies false claims and raises your legal defenses.

Our partner Solo helps you respond to debt lawsuits in minutes. The platform asks simple questions and generates your legal Answer. You can file it yourself or have an attorney review it first.

Responding to the lawsuit gives you leverage. Debt collectors often settle for less when you fight back. Many cases get dismissed because collectors can’t prove you owe the debt.

Your Answer Must Be Filed on Time

You have 14 to 30 days to respond, depending on your state. Missing this deadline means automatic loss. The collector gets a judgment and can garnish your wages or freeze your bank account.

Don’t let fear paralyze you. Responding is easier than you think.

Why Debt Settlement Companies Often Fail

Debt settlement companies face several obstacles. Creditors aren’t required to negotiate. Many refuse to settle at all.

Original creditors rarely settle debt. They prefer payment plans or selling the account to collectors. Only charged-off debts typically qualify for settlement.

The company doesn’t pay your creditors during negotiations. Collection calls intensify. You might get sued before settlement talks even start.

Your saved funds sit in an account earning the company interest. If you quit the program, you’ve wasted months or years. Your debt is bigger and your credit is ruined.

Better Alternatives to Debt Settlement

You have more effective options than debt settlement programs.

Credit Counseling

Nonprofit credit counseling agencies offer free consultations. They review your budget and debts. They create personalized action plans.

These agencies negotiate directly with creditors. They often secure lower interest rates and waived fees. You make one monthly payment that gets distributed to creditors.

Debt Consolidation Loans

Debt consolidation combines multiple debts into one loan. You get a single monthly payment, ideally at a lower interest rate.

You need decent credit to qualify. The loan pays off your creditors immediately. You owe the consolidation lender instead.

DIY Debt Settlement

Settling debt yourself saves money on company fees. Wait until accounts are seriously delinquent. Creditors become more willing to negotiate.

Offer a lump sum payment of 40% to 60% of the balance. Get the settlement agreement in writing before paying. Never give creditors direct access to your bank account.

Protect Yourself From Debt Relief Scams

Shady debt relief companies prey on desperate people. Watch for these red flags.

Demands for upfront fees before settling any debt
Guarantees to settle all your debts for pennies
Tells you to stop communicating with creditors
Refuses to explain risks or answer questions
Isn’t licensed in your state
Pressures you to sign up immediately

Legitimate companies explain risks clearly. They don’t make unrealistic promises. They’re transparent about fees and timelines.

Take Action on Your Debt Today

National Debt Relief and similar programs aren’t your only option. You have alternatives that don’t destroy your credit for years.

If you’re being sued, respond immediately. Ignoring the lawsuit makes everything worse. Our partner Solo helps you answer debt lawsuits quickly and affordably.

You can negotiate settlements yourself. You can work with credit counselors. You can explore bankruptcy if your situation is severe.

The worst thing you can do is nothing. Take control of your debt situation now.

Frequently Asked Questions

What is debt settlement and how does it work?

Debt settlement involves negotiating with creditors to accept less than you owe. Companies like National Debt Relief ask you to stop paying creditors and instead deposit money into a separate account. After months of saving, they attempt to negotiate a reduced payoff amount and keep 15-25% as their fee.

How does debt settlement damage my credit score?

Debt settlement companies tell you to stop paying creditors completely. Your accounts get marked as unpaid every month, causing your credit score to drop steadily. Negotiations can take years, during which interest and penalties keep accumulating, making your debt larger.

Can I cancel my National Debt Relief program?

Yes, National Debt Relief allows you to cancel anytime without penalties or cancellation fees. You'll get your saved money back. You can then pursue better alternatives like credit counseling, direct negotiation with creditors, or responding to lawsuits if you've been sued.

What should I do if I'm being sued for debt?

You must file an Answer with the court within 14 to 30 days, depending on your state. Ignoring the lawsuit results in automatic default judgment against you. Responding gives you leverage to negotiate settlement or get the case dismissed if the collector can't prove the debt.

How can I settle debt without using a debt settlement company?

Wait until accounts are seriously delinquent, then contact creditors directly. Offer a lump sum payment of 40-60% of the balance. Get any settlement agreement in writing before paying. This approach saves you the 15-25% fee that debt settlement companies charge.

National Debt Relief Screwed Me: How to Fix Your Debt Problems