The days of wading through a veritable swamp of unethical and fraudulent credit debt consolidation companies are now over
. Such a service is vital in the sagging world economy and protections were needed so that consumers could mange debt burdens with confidence. The government stepped in by way of the FTC and enacted new regulation to make such a needed industry safe and user friendly.
Credit debt consolidation can be very useful to someone with $10,000 or more of debt from different creditors. Under such a scenario multiple fees can rack up. Payments can also become unwieldy. Debt consolidation pays of multiple loans with one loan thereby lowering the monthly payment and eliminating the possibility of more than one fee.
But people seeking such help could sometimes pay an up front fee and receive no help because the debt relief company would claim that they couldn't do anything. Under new laws a company offering a credit debt consolidation loan must accomplish a result before they can charge a fee. Such a simple change has had a massive effect by eliminating unethical companies and frauds making for a safer industry.
Information sharing has been regulated as well. Customers must be kept informed throughout the process of negotiation and told how to handle their responsibilities. This prevents miscommunication between creditor and debtor that can be costly. When receiving a credit debt consolidation a customer must be told at the start what will happen to the credit rating so as to not receive a credit shock when everything is done.
Knowing these primary changes in the law will make for an informed consumer who can avoid problems and fraud. To find out more about safe credit debt consolidation click here for a Free Debt Relief Network