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What if Lifestyle Modifications Aren’t Enough?
Although I firmly believe that lifestyle and behavioral changes are enough for many people to avoid or escape their debt, there are times when that’s not true. In particular, individuals who have a significant amount of outstanding debt can feel crushed by the monthly payments required by each individual creditor. And when accounts become past due, some creditors will call and demand payments, which further aggravate the problem, If you have trouble meeting minimum monthly payments, or if you are regularly being hassled by creditors, it might make sense to explore debt settlement options like those offered by National Debt Relief.
Since being founded in 2008, National Debt Relief (NDR) has helped more than 100,000 individuals resolve more than $1 billion in outstanding debt through the following methods:
1) Verify Eligibility
First, the company verifies the details surrounding your outstanding debt. The company only works with individuals with significant (roughly $10,000 or more), unsecured debt (including credit card debt, medical debt, personal loans, and some private student loans).
Secured debts (including auto loans, mortgage loans, utility bills, IRS back taxes, and many lawsuits) cannot be settled using their services. Furthermore, due to state regulations, services are unavailable in Connecticut, Georgia, Kansas, Maine, New Hampshire, Oregon, South Carolina, Vermont and West Virginia.
2) Initiate the Relationship
If you are eligible to work with NDR and you initiate the relationship, NDR helps you establish a new savings account in your name. Then instead of paying your creditors each month, you use those monies to fund the savings account. The monthly transfer into the savings account is often set at a lower value than the combination of all outstanding debt payments.
This is how all debt settlement works. You stop paying existing creditors while accruing a pot of savings within the new account. National Debt Relief then leverages this position and negotiates with individual creditors on your behalf to reduce the total amount of debt that you owe. Because you’ve stopped making all payments, the creditor may view a reduced debt settlement as a better option than receiving nothing at all.
If NDR reaches an agreed settlement, you pay the creditor using the savings account and then NDR collects a fee. The company does not collect any fee until it settles an individual debt, and the fee usually ranges between 18% to 25% of your total enrolled debt, depending on the amount you owe and the state you live in. NDR claims that many debts are settled in 24-48 months, which could be another benefit for individuals who are making minimum monthly payments on long-term, unsecured debt.
NDR has stated that customers who complete their debt settlement programs reduce their debt approximately 30%, after fees (see Consumer Affairs for recent customer feedback). This savings does not apply to clients who leave the program before their debt is settled, and the program can last several years depending on individual circumstances.
3) Understand Your Options
Because you are no longer paying each creditor, your outstanding debt accounts will become delinquent. You will likely accrue late fees, penalties, and additional interest each month. Your credit report will show past due on each corresponding account, and your credit score will fall.
If you have excellent credit, which is unlikely if you have extensive amounts of debt or a history of late payments, you need to think carefully before entering any type of debt settlement agreement because credit can be important in a variety of financial situations that may or may not be applicable to you. But if you already have several late payments or delinquencies that have damaged your credit, there is less to lose, so to speak.
Remember, there are no guarantees in debt settlement. If your creditor refuses to work with NDR, or if you fail to complete the program, you will still owe the original debt plus any additional expenses incurred during the delinquency. It’s worth noting that NDR works with customers on a case-by-case basis to verify existing creditors and make sure the program can be successful. If there are debts that NDR doesn’t believe can be settled, they do not encourage individuals to enter/continue the debt settlement program.
Debt settlement is something that should not be taken lightly, and you should explore all of your options before making a final decision. If you are making on-time monthly debt payments and have an otherwise healthy financial life, you might explore ways to decrease your expenses or increase your income, both of which would allow you to eliminate your debt sooner.
Sometimes, lifestyle modifications are not enough. If you are getting behind on payments or feel like your debt is insurmountable, it might make sense to explore debt settlement options like those provided by National Debt Relief. Even though the process will take effort and dedication, it might be your best option to escape the heavy burden of debt.