Woodbridge Couple's Credit Destroyed by National Debt Relief

Talked Friday to a couple from Woodbridge, who came to see me because Tony got garnished, after "settling" their debts through National Debt Relief. Tony, like many people around Woodbridge with a security clearance, was afraid of bankruptcy.

People who say bankruptcy wrecks your clearance are completely wrong. When your debts are discharged in bankruptcy, a court of law, established under the Constitution of the United States, has determined you can no long afford to pay your debts. When you sign up for National Debt Relief, you take the law into your own hands, stop paying the debts you are legally obligated to pay and you hope they will work out a settlement. Instead of dragging you into court, which the law allows them to do.

Approval by a judge? Take the law into your own hands? Which sounds better to your FSO?

Claim your rights under the law? Expect your creditors will NOT claim their rights under the law? Which is more likely to work?

(The National Debt Relief website says "There is a slight possibility that any creditor can sue you." That's a lie. Any legitimate creditor can sue you. And a good chance that some of them will.)

Tony's agency is part of the Department of Homeland Security. Their policy is you can't work there if you have more than $10,000 in delinquent debt. When he signed up for National Debt Relief, Tony had no delinquent debts. Eight months later is all delinquent.

We decided Tony would go into a Chapter 13, a payment plan through the bankruptcy court. Tony will pay off about a third of his debts over three years, and then the rest will be eliminated, discharged. In Chapter 13 we have to get approval from the Judge that the payment represents all you can afford. Sometimes the Judge squeezes pretty hard.

But compare Chapter 13 to debt settlement. In Chapter 13, you need to persuade one person, the bankruptcy judge. In debt settlement you have to persuade every single one of your creditors. If even one rejects the settlement and garnishes you, your plan is sunk.

Besides getting them all to agree to settlements, the creditors also have to all agree to wait their turn. Once a settlement is reached through National Debt Relief, they start charging you their settlement fee. The other creditors need to wait patiently. The next creditor doesn't get anything until both the first creditor, and the settlement fee is paid. The third one gets nothing until the first two creditors are paid; and National Debt Relief collects their fee on the first two settlements.

In Chapter 13, when the Judge approves your payment plan, all the creditors are bound by what the court agrees to.

Which one gets you peace of mind?