Credit Card Debt Settlement - Laws And Regulations

When you have a credit card or more than one, it is extremely easy to find yourself heavily in debt

. This is what is known as rotating credit card debt, which has grown to be a serious problem among consumers. Credit card debt settlement is a necessary service that can help individuals who have accumulated too high a debt and cannot foresee a way to pay it all back. A good debt settlement attorney can assist in preparing a debt resolution plan to alleviate the stress that credit card debt may bring to a consumer.

There are specific rules and regulations regarding credit card debt settlement that are in place to protect consumers. Each state in the United States has its own particular laws and statute of limitations on credit card and other consumer debt. The statute of limitations is the deciding factor in how much time a credit card company or third party debt collector acting on behalf of the creditor, has to legally attempt to come after an individual to collect money that is owed to them. In most states, this time frame is typically between three to 10 years, although it is best to find this out from your own state if you owe a debt to your creditors.

Additionally, there is a federal regulation known as the Federal Fair Debt Collection Practices Act, which was put forth to protect consumers who hold credit cards. The Federal Fair Debt Collection Practices Act determines the manner in which creditors can contact consumers when they are trying to collect unpaid debts that are owed. The Act also dictates when and where creditors can file a lawsuit against a consumer if the consumer does not reside in the same state as where the creditor is located.

The Federal Trade Commission has also instituted a regulation that prohibits credit card companies from soliciting the business of consumers over the phone. This can specifically help individuals who have dealt with the problem of too much credit card debt, who are particularly vulnerable.

Bankruptcy is often a method that is used to help in debt settlement. However, it should be noted that this should always be a last resort. Filing for bankruptcy is a way to basically wipe your financial slate clean when you cannot foresee any possibility of being able to pay back a debt. It relieves the individual from the financial obligation and can help them to start over, although it can adversely affect your credit reputation and score in the future.

Prior to turning to bankruptcy as an option, it is wise to look into debt settlement. There are many debt settlement companies and law firms that offer this service for a fee only after agreements have been made about your financial situation. In many instances, this service can help to get the debt you owe lowered so that it is easier for you to pay it off. However, it is important to make your payments on time because late payments can negatively impact your credit history. You will be paired with a with a debt settlement attorney who has experience negotiating with creditors and debt collectors and can advise as to your rights under credit card debt settlement and other consumer protection laws.

by: Alvin Clark

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