Debt settlement vs bankruptcy - how new laws are changing the face of debt relief - part 2

Debt settlement vs bankruptcy - how new laws are changing the face of debt relief - part 2

Currently, the volume of people suffering from unsecured debt is increasing with every passing day. People can not manage to pay their dues because of low income and high rate of inflation, which is in return increasing the ratio of bankruptcy. Individuals believe that this is the right way to get free from debts but they are wrong. They are not aware of its disadvantages. The federal government has taken serious action against the increasing trend of insolvency because it is not good for the economy. It has introduced some new options which are equally beneficial for the borrower, the lender and the economy. Debt settlement is one of these options and is considered as the best alternative of bankruptcy but due to the arrival of fake settlement companies, people avoid to hire the negotiation companies and start preferring insolvency. In order to save people from fraud, the federal government has come up with new laws.

According to the new laws, upfront fees are prohibited and firms can ask for their fees only after the successful completion of the negotiation deal. The new laws also save the consumer by giving high fees to the settlement firms by defining the limit of charges which can be charged by the firms. After the implementation of these laws, people can now get debt relief by hiring the negotiating firms more easily. These firms will convince the lender for the settlement and will manage to get up to sixty percent reduction in the total outstanding amount. You can pay the remaining debt amount in easy monthly installments or in a lump sum, depending upon your affordability.

The option of debt relief is a legal alternative of bankruptcy. Lenders have no issue to agree for the settlement deal because they know that if the borrower files for insolvency then they will not get any nothing back. A large number of credit card debt victims are adopting this method and are getting handsome relief in the liability by hiring negotiating companies. The new laws have removed the fear of fraud and have made this method affordable.

If you have over $10,000 in unsecured debt it may be a wise financial decision to consider a debt settlement. Due to the recession and overwhelming amount of people in debt, creditors are having no choice but to agree to debt settlement deals.

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