Credit Card Debt Solutions - How New Laws Make The Debt Settlement Process Less Risky

Credit Card Debt Solutions - How New Laws Make The Debt Settlement Process Less Risky

Of the many methods of clearing credit card debt, one is to utilize the method of debt settlement which allows the consumers to enjoy an elimination of at least 50% of the debt that they have. The method of settlement has gained stupendous popularity after the new federal laws imposed restrictions on bankruptcy filing. It is because of this reason that a huge number of debt settlement firms came into existence. One may think of this as a good thing. However, the fate of the settlement industry was sealed because of this! Many of these new firms which sprang up in the industry were not genuine and they can correctly be called as fraud.

These fraud companies came up with false promises and attracted the consumers. The promises they made sounded genuine and the troubled consumers were easily fooled. These fraud companies claimed that they will get rid of at least 50% of the debt that the consumers have and on top of that, they will eliminate the debt in the shortest possible time. When the consumers approached these firms, the firms asked for advance fee payment in accordance with the existing and prevailing law of the settlement industry. Once the consumers paid, these firms simply ate up the money and they reverted back to the consumers in a couple of months and said that their attempts to negotiate and settle the debt were turned down by the creditor and that the creditors are demanding full repayment of the debt. In reality, these firms never approached the creditors. When the consumers asked for repayment of the fees, the firms said that it is not possible as the fees that they collected were non-refundable. This way the consumers were fooled and under the shadows of these non-legitimate firms, the consumers started losing faith on the settlement industry as a whole.

This was noticed by the Federal Trade Commission and the FTC came up with a new law which was enforced on 27th of October 2010. According to this new law, the settlement firms will not be allowed to ask for advance payment of fees from the consumers and hence, they first need to eliminate the debt of the consumers and it is only then that they can claim their fees. With this new law in place, only the legitimate firms will survive in the industry because, they have ample financial power to serve the consumers by bearing the expenses from their own pockets. Once the settlement is complete and the consumers are safely out of their debts, the settlement firms can then ask for their fees. This explains why debt settlement process is less risky now.

Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement. Check out the following link to locate legitimate debt help in your state.

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