subject: Federal Credit Card Debt Settlement Laws - How New Laws Make Debt Settlement A Better Option [print this page] Federal Credit Card Debt Settlement Laws - How New Laws Make Debt Settlement A Better Option
On October 27th 2010 new federal credit card debt settlement laws went into affect which completely transform the way in which the industry operates. What used to be a very risky decision for consumers and small businesses is now a legitimate option for debt relief. Now when someone enters into a debt relief program they will not have to pay a dime until their debts actually settle. This takes the risk off the back of the client and places it upon the debt relief company.
The new federal credit card debt settlement laws were passed for good reason. It was simply to easy for companies to collect upfront fees from consumers and not perform or follow through on their promises. There was no rules in place for these companies and far too many of them took advantage of this and ripped their clients off. They are not able to do this anymore. If they don't perform they don't get paid.
Before these federal credit card debt settlement laws were passed I would have encouraged a lot of consumers to stat away from these companies. Now however it is a much less risky option. While there is still some negative consequences it is now impossible to get ripped off by paying upfront fees. The majority of consumers are able to eliminate around 50% of their unsecured debt while avoiding bankruptcy.
Bankruptcy should always be the last option. Bankruptcy will typically affect your credit score for at least 7 years while debt negotiation will typically only affect your credit score for 3 years. Considering these new federal laws, I would now highly recommend this option as a means to avoid bankruptcy.
Getting out of debt through a debt settlement process is currently very popular but you need to know where to locate the best performing programs in order to get the best deals. To compare debt settlement companies it would be wise to visit a free debt relief network which will locate the best performing companies in your area for free.
