subject: Debt Relief Programs - How Consumers Will Benefit From New Debt Settlement Regulation [print this page] Debt Relief Programs - How Consumers Will Benefit From New Debt Settlement Regulation
If you are planning to get rid of your debt via Debt Settlement and want to know the how this program will benefit your cause, this article will tell you all the details. Thanks to the new law by Federal Trade Commission, now consumers can contact a settlement company without the fear of being scammed or cheated.
In the recent past many fraudulent and fake companies were looting the people already under a debt of over 10,000 dollars. These companies attracted the consumers by making false promises. They charged upfront. The settlement fee and told the consumer that they would negotiate with the creditor and settle the debt. But in fact they never contacted the creditor and after the passage of some time told the consumer that the debtor had refused to settle the debt.
The consumer who had paid the settlement fee also had to pay the full amount of debt along with the penalties and interest or file bankruptcy. In both cases consumer had to suffer extreme financial loss while bankruptcy had drastic effects on his financial status and chances of getting loan in the future also vanished.
Courtesy American Federal Government that formulated a new law with the help of Federal Trade Commission in July, 2010. This law banned the settlement companies from charging the fee in advance. The companies can only charge the consumer after the debt has been settled. The settlement fee is a percentage of the reduced amount. The maximum fee is fixed to 15% of the reduction in the total debt.
Because of this law the consumer feels safe and can take advantage of the most realistic and practicable settlement program available. The consumers who have a debt of over 10,000 dollars and have a indisputable reason for not being able to pay their debt back can apply for this program. The only thing they have to do is, hire a legitimate and professional settlement company. The company will configure a repayment plan after reviewing the financial situation and total debt of the consumer. If the company is well equipped the reduction can be from 50 to 70%.
Debt settlement is a legitimate alternative to filing bankruptcy. Consumers can expect to eliminate around 50% of their unsecured debt with the help of a legitimate settlement program. With the new FTC laws recently passed in July 2010, debt settlement is a much less risky option. If they don't settle your balance you don't have to pay a dime.
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