Federal Debt Relief Laws 2010 - Why Debt Settlement Firms Are Now Performance Based

When the housing market fell through for many investors and home owners

, the debt started piling up. The recession hit the country hard and many people fell behind on credit debt and other debts when they lost their jobs and homes. During this time hundreds and hundreds of debt settlement firms and companies popped up all over the country, as well as online. They promised consumers a way out of debt by working with the credit card companies and banks to lower the amount that the consumer owed. They told consumers that they would negotiate the debt and lower the payments. Help the consumer out of their bills and create a repayment plan that the person could afford.

However, part of the ploy was that the consumer had to pay huge fees up front to the debt settlement company. Once these fees were paid the company did nothing for the firm. They were never going to settle the debt or lower the payments. They had no intention of working with the banks and loan institutes to remove interest and fees. The consumer was out even more money and in a far worse situation, because many times they were told to stop making any payments at all. Instead the save the money for the when the repayment plan starts. This put people in horrible legal and financial distress. The situation pushed many people to have to claim bankruptcy and foreclose on their homes, because of the judgments and lawsuits held against them by banks and credit card companies.

With the new Federal debt relief laws of 2010, bogus settlement firms can no longer collect fees up front. They must fulfill all their obligations to the consumer seeking help before they can collect any fees. They have to settle the debt, fulfill the contract and make sure that the person is on a payment plan with the creditors before any money can be received. In short they must do what they day they are going to do, before they can be paid for their services.

The Federal debt relief laws of 2010 will weed out the fraudulent companies. Settlement firms will be performance based, because they will not be making money of they are not doing their job. Their true performance will show in the number of settlements they have completed and the how profitable they are. Employees within these companies will be weeded out as well when they are not doing their job. They will no longer be able to make big promises and not fulfill them. These new laws help an already struggling consumer, as well as ensure that the firms are doing their due diligence in completing the negotiations and working on the settlements with the banks and credit card companies.

Furthermore, the Federal debt relief laws of 2010 ensure, that even legitimate companies continue to do their work correctly. Consumers can say no to fees up front and make no payments until after the process has been completed. The new laws will completely eliminate companies that are scams and ensure that consumers are getting the help they need.

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.

Federal Debt Relief Laws 2010 - Why Debt Settlement Firms Are Now Performance Based

By: smith archer

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