Can I Cancel National Debt Relief? Steps, Fees, and Refunds

You can cancel National Debt Relief at any time, without penalty, and federal law requires the company to return the money in your dedicated savings account within seven business days of your request — minus any fees legitimately earned on debts already settled. The cancellation itself is straightforward. What follows it — creditors, credit damage, and a possible tax bill — is where people get caught off guard.

Your Right to Leave the Program

The Telemarketing Sales Rule is the federal regulation that governs debt settlement companies, and it is direct on this point: you can 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 that were actually settled.¹ Nothing in the service agreement can override that.

The same rule bans fees before results. Three things must happen before National Debt Relief can collect anything: it must negotiate a settlement with a creditor, you must approve it, and at least one payment must be made under the new terms.¹ If you cancel before any of your enrolled debts have been settled, the company has earned zero fees, and your account balance should come back to you in full.

How to Cancel Step by Step

Getting out requires more than one phone call. You need to cancel the service, stop money from leaving your bank account, and recover your dedicated account funds. Three distinct tasks, and people often collapse them into one.

Notify National Debt Relief in Writing

Call to give notice, then follow up with an email or letter that includes your name, account number, and a clear statement that you are terminating the program. If you mail a letter, use certified mail with return receipt requested. Written confirmation matters if there’s ever a dispute about when you canceled or whether the company received your request.

Stop the Automatic Payments

When you enrolled, you authorized automatic monthly transfers from your bank account into a dedicated savings account. Canceling the program does not automatically stop those transfers. You have to revoke that authorization in two places.

Tell National Debt Relief in writing that you are revoking permission for automatic payments. Then call your bank, say the same thing, and follow up in writing. Your bank may recommend a formal stop-payment order, which usually carries a small fee. Once authorization is revoked with both parties, any further withdrawal is unauthorized, and federal law lets you dispute it and recover the money.²

Recover Your Dedicated Account Funds

The money in your dedicated savings account belongs to you. The account is held at an insured financial institution, and its administrator cannot be owned by or affiliated with National Debt Relief.¹ Request the return of your funds in writing. The seven-business-day clock starts from that request.

Check the math on any deductions. Fees have to be proportional: if only a fraction of your enrolled debt reached settlement, the company can only charge a corresponding fraction of its total fee.¹ The company cannot collect its full fee off one small completed settlement while other debts remain untouched. Compare the deduction against the specific debts you approved and paid on.

What They Can Legitimately Charge

National Debt Relief states that its fees average up to 25% of the total debt enrolled in the program.³ That percentage is collected only after a settlement has been reached, approved by you, and paid into. Separately, the third-party administrator of your dedicated account may charge a modest monthly maintenance fee. If you cancel with no settlements completed, that account-management fee should be your only cost.

What Your Creditors Will Do Next

This is where canceling stops being simple. While you were in the program, you were likely told to stop paying your creditors directly. Those missed payments have been piling up with interest and late fees, and when you leave, the unsettled debts don’t reset to where they were when you enrolled. They’re larger, and creditors are less patient.

Expect collection calls to resume quickly on anything that wasn’t settled. On larger balances, creditors may sue. A court judgment gives them serious enforcement tools: wage garnishment of up to 25% of your disposable earnings, bank levies, and liens on property you own. You’d also likely owe court costs and possibly the creditor’s attorney fees on top of the original debt.

The statute of limitations matters too. Most states give creditors three to six years to file a lawsuit over unpaid consumer debt. In some states, a partial payment on an old debt can restart that clock entirely, and partial payments may have happened through settlement negotiations while you were enrolled. If you’re dealing with older accounts, talk to a consumer law attorney before making any new payments that might revive an expired claim.

What Cancellation Does and Doesn’t Fix on Your Credit

Debt settlement damages your credit on the way in, and canceling does not undo that damage. The program’s core strategy relies on stopping payments so creditors become willing to accept a reduced payoff, and every missed payment gets reported to the credit bureaus. Payment history is the most influential factor in your score.

Missed payments stay on your credit report for seven years from the date of the first delinquency, not from when you cancel. If you went twelve months in the program without paying creditors, those twelve months are already in your history regardless of what you do next. Debts that were settled show up as “settled for less than the full amount,” which is negative but generally less harmful than an ongoing charge-off.

The most useful thing you can do after canceling is resume paying your creditors on time. A consistent record gradually outweighs older negatives. There’s no shortcut around the seven-year windows, but the trajectory starts improving the moment you stop missing payments.

A Tax Bill May Be Coming on Debts Already Settled

Any debt that was successfully settled while you were enrolled may trigger taxes. When a creditor forgives $600 or more, they must report the forgiven amount to the IRS on Form 1099-C.⁴ The IRS treats the forgiven balance as taxable income for the year the settlement occurred. If you owed $15,000 and the creditor accepted $8,000, the $7,000 difference is income on your return.

There’s an important exception. If you were insolvent when the debt was canceled — total liabilities exceeding total assets — you can exclude some or all of the forgiven amount from income by filing IRS Form 982.⁵ Many people in debt settlement qualify, since the reason they entered was an inability to pay in full. A tax professional can confirm whether insolvency applies to your situation and file the exclusion correctly.

If National Debt Relief Won’t Process Your Cancellation

The law is unambiguous, and you have places to go if the company drags its feet, charges fees it hasn’t earned, or misses the seven-business-day refund window.

File a complaint with the Federal Trade Commission, which enforces the Telemarketing Sales Rule, at ReportFraud.ftc.gov.⁶
File a complaint with the Consumer Financial Protection Bureau, which handles complaints about debt relief providers, through its online portal.⁷
Contact your state attorney general’s consumer protection office, which may have enforcement authority beyond federal regulators.
Consult a consumer law attorney. If money is being wrongfully withheld, many consumer protection statutes allow recovery of attorney’s fees, which makes smaller cases viable to bring.

Lining Up What Comes Next

Leaving without a plan puts you back at square one, except your credit has already taken hits and some creditors may be more aggressive. Think through the next step before you cancel.

A nonprofit credit counseling agency can review your finances and, in many cases, set up a debt management plan where the agency negotiates lower interest rates and you make one consolidated monthly payment. Because you keep paying creditors throughout, your credit is spared further missed-payment damage.⁸
You can negotiate with creditors yourself. Many will accept a reduced lump sum or modified payment plan directly from you, and you avoid the 15–25% settlement 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.⁸

Whichever direction you choose, move quickly. The longer unsettled debts sit unpaid, the more interest accrues and the higher the risk of a lawsuit. A clear next step, even an imperfect one, beats an open-ended pause where the creditors hold all the leverage.

1
eCFR. 16 CFR Part 310 – Telemarketing Sales Rule
2
Consumer Financial Protection Bureau. How Do I Stop Automatic Payments From My Bank Account
3
National Debt Relief. National Debt Relief Top Frequently Asked Questions
4
Internal Revenue Service. Instructions for Forms 1099-A and 1099-C
5
Internal Revenue Service. About Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness
6
Federal Trade Commission. How to File a Complaint With the Federal Trade Commission
7
Consumer Financial Protection Bureau. Submit a Complaint
8
Consumer Financial Protection Bureau. What Is a Debt Relief Program and How Do I Know if I Should Use One