subject: New Debt Settlement Laws - What It Means For the Future of Debt Settlement Services [print this page] New Debt Settlement Laws - What It Means For the Future of Debt Settlement Services
Debt relief law was introduced when the US Government realized that the financial condition of economy is getting worse day by day. Credit card debt holders were unable to pay their debts because they had no savings and so they went for bankruptcy. On the other side the credit card companies also suffered because due to increasing bankruptcy cases they were not able to get anything from debt holders.
Looking at this condition the US Government introduced a debt negotiation law which is called Debt Relief Act 2010. It was a good step taken by the Government. According to this law if you have a loan of amount equals to $10000 or more then you can reduce it up to 50%. All you have to do is to hire a lawyer that is a debt settlement company which actually works for debt settlements. These companies file your case about your income and expenditures and other details and present to the creditor. They negotiate with the creditor on your behalf to reduce the debts and in return they charge fee for their services.
But the problem was never solved. When the debt settlement law was introduced, many people moved towards the debt settlement companies. There are scammers in every Industry who advertise their services and attract people by offering various deals. When people get attracted or it is proper to say "get trapped" they used to charge high upfront fee to them but the surety of Debt relief was not there. So the poor debtors got back from this service and again started filing bankruptcies.
Before all this happened there was no check and balance from the Government on the services of debt settlement companies. When this picture appeared to the Government, it revised the existing laws. So according to the new debt settlement law no company can charge any fee to the debtor unless the creditor shows his willingness for the debt relief. Secondly these companies cannot charge more than 15% of the debt amount reduced. Thus we can say that the future of debt relief industry is now safer than before.
If you have over $10,000 in unsecured debt it may be a wise financial decision to consider a debt settlement. Due to the recession and overwhelming amount of people in debt, creditors are having no choice but to agree to debt settlement deals. To find legitimate debt reduction help in your state and get free debt advice then check out the following link.
