You can cancel National Debt Relief at any time, without penalty, and federal law requires the company to return the money sitting in your dedicated savings account within seven business days — minus only fees legitimately earned on debts that were already settled. The cancellation call is the easy part. What takes work is stopping the automatic bank withdrawals, recovering your account balance, and dealing with the creditors, credit damage, and possible tax bill that outlast the program.
Your Federal Right to Walk Away
The Telemarketing Sales Rule governs debt settlement companies and is unambiguous on this point: you may withdraw from a debt relief program at any time, and the company must return all funds in your dedicated account within seven business days, minus fees earned on debts actually settled.1eCFR. 16 CFR Part 310 – Telemarketing Sales Rule Nothing in a service agreement can override that. A federal regulation controls, no matter what the contract says about waiting periods or cancellation procedures.
The same rule bars debt settlement companies from charging any fee before three things have happened: they’ve negotiated a settlement with at least one creditor, you’ve approved it, and at least one payment has been made under the new terms.1eCFR. 16 CFR Part 310 – Telemarketing Sales Rule If you cancel before any of your enrolled debts have been settled, the company has earned nothing, and your full account balance should come back to you.
How to Cancel, Step by Step
Three separate tasks, not one. People conflate them and then wonder why money keeps leaving their bank account after they thought they’d quit.
Notify the Company in Writing
Call National Debt Relief and tell them you’re canceling, then follow up with an email or letter. Include your name, account number, and a clear statement that you’re terminating the program. If you mail a letter, send it certified with return receipt requested. Written proof matters if there’s ever a dispute about when you canceled or whether the company received your request.
Stop the Automatic Withdrawals
When you enrolled, you authorized automatic monthly transfers from your bank account into a dedicated savings account. Canceling the program does not stop those transfers on its own. You have to revoke the authorization in two places.
Tell National Debt Relief in writing that you’re revoking permission for automatic payments. Then call your bank, tell them you’ve revoked authorization, and follow up in writing there too. Your bank may recommend a formal stop-payment order, which usually carries a small fee. Once authorization is revoked with both, any further withdrawals are unauthorized, and federal law lets you dispute them and get the money back.2Consumer Financial Protection Bureau. How Do I Stop Automatic Payments From My Bank Account
Get Your Dedicated Account Money Back
The balance in your dedicated savings account is yours. That’s a federal requirement, not a courtesy. The account sits at an insured financial institution, and the administrator can’t be owned by or affiliated with National Debt Relief.1eCFR. 16 CFR Part 310 – Telemarketing Sales Rule Request the return of your funds in writing. The seven-business-day clock starts running.
Before you accept whatever the company sends back, check the math. If they deducted fees, the amount should reflect only debts that actually reached settlement, not your entire enrolled balance. The TSR requires fees to be proportional: if a fraction of your enrolled debt was settled, the company can charge only a corresponding fraction of its total fee.1eCFR. 16 CFR Part 310 – Telemarketing Sales Rule
What They Can and Can’t Charge
National Debt Relief states its fees average up to 25% of the total debt enrolled.3National Debt Relief. National Debt Relief Top Frequently Asked Questions That percentage is only collected after a settlement is reached, you approve it, and at least one payment goes to the creditor. The company cannot front-load fees by settling one small debt and then claiming its full fee on the rest of your enrolled balance.1eCFR. 16 CFR Part 310 – Telemarketing Sales Rule
The third-party administrator of your dedicated account may charge a modest monthly maintenance fee, separate from any settlement fee. If you cancel with zero completed settlements, those small account-maintenance charges should be your only cost.
Your Creditors After You Leave
This is where canceling stops being simple. While you were in the program, National Debt Relief likely told you to stop paying your creditors directly. Interest and late fees have been piling on. Unsettled accounts don’t reset to their pre-enrollment state when you quit. They’re bigger, and the creditors are less patient.
Collection calls will resume quickly on anything that wasn’t settled. On larger balances, expect the possibility of lawsuits. A creditor who wins a judgment gains real enforcement tools: wage garnishment of up to 25% of your disposable earnings, bank account levies, and liens on property you own. Court costs and the creditor’s attorney fees can be added on top of the underlying debt.
The statute of limitations matters too. Most states give creditors three to six years to sue over unpaid consumer debt. In some states, a partial payment on an old debt — which may have happened through settlement negotiations while you were enrolled — can restart that clock. If you’re dealing with older accounts, talk to a consumer law attorney before making any payment that might revive an expired claim.
What Cancellation Does and Doesn’t Do to Your Credit
Canceling does not repair the damage the program already caused. Debt settlement works by having you stop payments to creditors so they become desperate enough to accept less. Every missed payment gets reported, and payment history is the largest single factor in your credit score.
Those missed payments stay on your credit report for seven years from the date of the first delinquency, not from the date you cancel. If you spent a year in the program without paying, those twelve months are locked into your history no matter what you do next. Debts that were settled before you canceled appear as “settled for less than the full amount,” which is negative but generally less damaging than an ongoing charge-off.
The most useful thing you can do after canceling is start paying your remaining creditors on time again. A fresh record of consistent payments gradually outweighs older negative marks. There’s no shortcut around the seven-year reporting window, but the trajectory improves the moment the missed payments stop.
The Tax Bill on Debts Already Settled
Any debt that was successfully settled while you were enrolled can trigger a tax bill. When a creditor forgives $600 or more, they must report the forgiven amount to the IRS on Form 1099-C.4Internal Revenue Service. Instructions for Forms 1099-A and 1099-C The IRS treats that forgiven balance as taxable income for the year the settlement happened.
There’s an important exception. If you were insolvent at the time the debt was canceled, meaning your total liabilities exceeded your total assets, you can exclude some or all of the forgiven amount from your income by filing IRS Form 982.5Internal Revenue Service. About Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness Many people in debt settlement qualify, since the reason they entered a program was an inability to pay in full. A tax professional can help you determine whether insolvency applies and how to file it.
If They Won’t Process Your Cancellation
The law is clear that you can leave without penalty. If the company delays, charges unauthorized fees, or fails to return your dedicated account funds within seven business days, escalate.
- File a complaint with the Federal Trade Commission, which enforces the TSR, at ReportFraud.ftc.gov.6Federal Trade Commission. How to File a Complaint With the Federal Trade Commission
- File a complaint with the Consumer Financial Protection Bureau through its online portal.7Consumer Financial Protection Bureau. Submit a Complaint
- Contact your state attorney general’s consumer protection office, which may have additional authority within its borders.
- Consult a consumer law attorney. Many consumer protection statutes allow recovery of attorney’s fees, which makes smaller cases viable to take on.
What to Do Instead
Leaving without a plan puts you back at square one, except your credit has already taken hits and some creditors are more aggressive than before. Think about what comes next before you cancel.
- Nonprofit credit counseling agencies can review your finances and help you build a budget. Many offer debt management plans, where the agency negotiates lower interest rates and you make one consolidated monthly payment. Unlike settlement, you keep paying creditors throughout, which stops further missed-payment damage.8Consumer Financial Protection Bureau. What Is a Debt Relief Program and How Do I Know if I Should Use One
- You can negotiate with creditors yourself. They’d often rather take a reduced lump sum or modified payment plan directly from you than deal with a third-party firm, and you avoid the settlement company’s fee entirely.
- For debts that are genuinely unmanageable, a bankruptcy attorney can tell you whether Chapter 7 or Chapter 13 offers a faster, more complete resolution than continued settlement attempts.8Consumer Financial Protection Bureau. What Is a Debt Relief Program and How Do I Know if I Should Use One
Whatever direction you pick, move quickly. The longer unsettled debts sit without payments, the more interest builds and the higher the risk of a lawsuit. A clear next step, even an imperfect one, beats an open-ended pause while creditors hold the leverage.