subject: Debt Settlement Laws - How New Federal Protection On Debt Relief Helps Consumers [print this page] Debt Settlement Laws - How New Federal Protection On Debt Relief Helps Consumers
With the objective of regulating the debt industry, the Federal Trade Commission has passed new debt settlement laws. These laws will help the consumer to enter a debt relief company without any risk. And it has indirectly cleaned up the debt relief field and wiped off most of the fake settlement companies from the field.
The main reason of enacting these new laws was to standardize the collection of service charges from consumer. Federal Trade Commission realized that there were many companies who charge a non-refundable upfront fee from the consumer. But the consumer did not have a guarantee of his debt would be settled. And on the other hand once a settlement deal went unsuccessful the advance money would not be returned. Therefore Federal Trade Commission realized that this practice has made debt settlement a hopeless option for borrowers.
But with the enforcement of new federal rules, the government took bold steps to prohibit the collection of advance fees. This new federal protection on debt relief helps the consumer in several ways. Now the troubled consumer will have to pay their service charge only after a successful deal is done. If the company was unable to settle the debt, no payment will be received.
Prohibition of advance fees has made bad effects on fake relief programs. They could earn profits through collection of non-refundable advance fee even without doing a single successful settlement. But now it has become hard to survive in the filed due to the new debt settlement laws. Therefore many fake companies are going out of the industry and only the genuine well qualified companies were able to survive in the field. After all what we can say is the new federal protection has helped the consumers to eliminate their debt safely in direct and indirect ways.
Debt settlement is a viable alternative to bankruptcy and is only intended for consumers that are experiencing a financial hardship and have at least $10k in unsecured debt. To locate legitimate debt settlement companies in your state check out the following link:
