Federal Debt Relief Law - How New FTC Law Ensures That You Are Not Fooled?

Federal Debt Relief Law - How New FTC Law Ensures That You Are Not Fooled

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The method of debt settlement helped the consumers to get out of debt easily because with this method, at least 50% of the dues were wiped off. This was a major reason why the demand for debt settlement increased. The increasing demand for the debt settlement as a relief method led to the growth of new settlement firms, many of which were unethical and they did not have proper license and registration to operate. These firms fooled the consumers and made money and never helped the consumers.

The main weapon in hand for these firms were the bright promises that they made. They claimed that they will help the consumers to get rid of at least 50% of their dues and will help them in getting out of their debts easily. This attracted many consumers. The firms also additionally promised that they will accomplish this within a very short period of time. Such promises were too tempting for the troubled consumers to resist. When the consumers approached this shady firms, the firms demanded for advance payments from the consumers. It was a prevailing rule of the settlement industry as firms took advance payments to cover up the costs of negotiations. The consumers easily believed these firms and paid the money.

Once the consumers paid the money, these firms turned back to the consumers after a couple of months time and said that the negotiation with the creditors failed because the creditors did not agree to the settlement deals and they want their money back in full. When the consumers asked the settlement firms to refund the fees, the firms did not agree as the fees were non refundable. This way the consumers were fooled. This was noticed by the FTC and FTC came up with a law which was enforced on 27th October 2010. According to this new law, the settlement firms are no longer allowed to ask for advance payments. They will have to first settle the debts of the consumers and then when the consumers are out of their debts, the settlement firms can ask for their fees. This way the new FTC law ensures that the consumers are not fooled!

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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