Debt relief - what new laws mean for debt settlement services
Debt relief - what new laws mean for debt settlement services
New liability settlement laws have made debt relief simpler. Getting debt relief through liability negotiations is becoming popular. The increase in popularity of this liability elimination method is due to the various advantages and limited disadvantages this option is offering. When debt settlement program started functioning; it gained popularity amongst the consumers only. The lenders were not quite satisfied with this method although this method was replacing bankruptcy. The government decided to persuade lenders to allow their consumers to use this program. The government announced the bailout plan and this plan stimulated lenders to persuade their customers to use this option.
Government has made many changes to liability settlement rules and regulations to increase the usage of this method. A major change in rules came into place when the consumers were becoming disappointed with this method. The reason for their disappointment was that they were being cheated by the settlement agencies. Many consumers faced law suits because their settlement agencies used wrong practices. Many consumers were charged huge amount of fees and they were never provided with any service at all. Government felt that their hard work was going to waste and people will once again start using insolvency so the government changed the regulation of this method.
The new rule stated that no settlement agency will be allowed to charge upfront fees from their clients or potential clients. The companies will have to provide consultancy and bargaining services before getting paid. This led to a great change in the atmosphere of the settlement industry. Not only the illegal firms had to alter their practices; the legal ones even changed their attitude.
The benefit of this rule was that the legal companies had to leave the market because the market was not providing them with high profits. The number of illegal companies decreased and the number of legal ones increased. The competition between legal companies became intense and they started operating at full efficiency level. They started solving cases at high speed and the number of cases being delayed decreased. More and more people were getting fast relief. Those consumers who did not have money to pay for services even started using this method. The quality of service even increased as the agencies were aware that if they fail to provide good results; they will not be paid. The fees charged by agencies even decreased because every company wanted to attract more clients.
Debt settlement is clearly a better alternative than bankruptcy and due to the massive amounts of consumers in debt, creditors are agreeing to very generous debt settlement deals.