PDS Debt vs. National Debt Relief

How does PDS Debt work, and who runs your program?

PDS Debt is the brand of Puridy Financial, Inc. You start with a free online assessment. The form asks you to let Puridy Financial “and its partners, including Beyond Finance, LLC” pull your credit, which PDS says is a soft inquiry that does not affect your score. An advisor then suggests a plan, which can be debt settlement, a consolidation loan or another option. PDS says most plans run 24 to 48 months.

The same form lists the “PDS Service Providers” it works with: Americor, Beyond Finance LLC, Century Support Services and Nationwide Loan Consultants. Depending on your plan, one of those firms may sign your agreement, hold your dedicated account and collect the fee. Ask PDS which company will run your program, then read that company’s fee disclosure. Americor, for example, publishes its fee range and program rules on its own site.

National Debt Relief enrolls you in its own settlement program. You stop paying the creditors you enroll, deposit one monthly amount into a dedicated account in your name, and its negotiators work out lump-sum payoffs that you approve one at a time. It says programs run 24 to 48 months.

How much does PDS Debt cost compared with National Debt Relief?

PDS Debt does not publish a fee. Its FAQ says checking what you qualify for costs nothing, that it will detail exact costs after approval, and that all fees are related to performance. Its own guide says debt settlement plans usually charge around 15% to 25% of the debt. Because a service provider may run your program, that provider’s fee schedule may be the one that applies, so get the percentage, whether it is based on enrolled or settled debt, and the monthly account fees in writing.

National Debt Relief publishes its fee: up to 25% of the debt you enroll, depending on your state and balance, charged only after a debt is settled. On $20,000 of enrolled debt, that is $5,000 or less in fees.

National Debt Relief also says clients who stay in the program and settle all enrolled debt save about 45% before fees, or about 20% including its fees, over 24 to 48 months. PDS does not publish a settlement savings figure. Its site says many clients cut their monthly payments by 40% to 60%, which describes the monthly payment, not the total you end up paying.

Under the FTC’s Telemarketing Sales Rule, no debt settlement company that sells by phone can charge a fee before it settles a debt and you make a payment under that settlement. Walk away from anyone who asks for money up front.

Does PDS Debt hurt your credit?

Checking your options with PDS uses a soft credit inquiry, which PDS says does not affect your score. Enrolling in a settlement program is different, with PDS or National Debt Relief. PDS’s own guide says debt settlement leads to payment defaults and a lower credit score in the short term, and that the impact can last up to 7 years. It says settlement suits people who are behind on payments and have no big purchases, such as a home, car or rental, coming up.

The CFPB warns that stopping payments while you save can lower your credit scores, that late fees and interest keep building, and that creditors can sue you during the program. Late payments can stay on your credit reports for up to seven years. If you can still make your minimum payments, a nonprofit debt management plan lowers interest without the missed payments, so it does less damage to your credit.

Track record and ratings

National Debt Relief has operated since 2009 and says more than 1.5 million people have enrolled and more than $20 billion in debt has been settled. It has held an A+ BBB rating and accreditation since February 2013, is an active accredited member of the Association for Consumer Debt Relief (ACDR) and is Platinum accredited by the International Association of Professional Debt Arbitrators (IAPDA). It rates 4.7 out of 5 from 45,344 reviews on Trustpilot.

PDS Debt also has strong ratings: an A+ from the BBB, accreditation since January 27, 2021, and 4.8 out of 5 from 232 Trustpilot reviews. The BBB lists a business start date of November 2019, and PDS says its team brings more than 15 years of experience. PDS does not publish industry memberships.

Neither company is affiliated with the government. Ignore any debt relief offer that claims to be.

Taxes, risks and your rights with either company

Forgiven debt is generally taxable income under IRS rules, and creditors may send you a Form 1099-C. If you were insolvent when the debt was canceled, Form 982 may let you exclude some or all of it. Talk to a tax professional before your first settlement.

The FTC’s rule protects you with both companies when you sign up by phone. No fee can be charged before a debt is settled and a payment is made, your savings must sit in an account you own at an insured institution, and you can leave at any time and get your balance back, minus fees already earned. Not every creditor agrees to settle, and results vary by creditor, state and how steadily you make deposits.

• Get it in writing: the company on the contract, the fee percentage, the account provider and its monthly fee, and the cancellation terms.
• Check the right company: look up the company that signs your agreement on the BBB.
• Compare a free option: a nonprofit credit counselor can review a debt management plan with you before you choose settlement.