subject: Credit Card Debt - 3 Reasons More Americans Are Now Settling Credit Card Debt [print this page] Credit card debt settlement industry has been here for a while. But from the past one year the popularity of this industry has been increasing. More and more people are hiring the professional services of debt settlement companies to clear off their long pending debts. These companies have always been providing the same level of services from the past 20 years. So what is the reason behind the rapid increase in their business? Why do so many people want to settle their debts all of the sudden?
There are three major reasons which have led to increasing demand of these settlement companies. Let's discuss these reasons in detail:
1. New government policy:
When the Obama administration came to power in the 2009 elections of the United States of America, they realized the serious impact of recession on the US economy. They injected million of dollars in the US economy as financial aids to the various banks and financial institutes in United States. In lieu of this financial aid, they made a deal with various financial institutes and banks to settle debts claims with their clients which would lower the number of people filling bankruptcy. Even creditors prefer debt settlement over bankruptcy as they get at least a certain amount of debt and the rest is paid by the government in the form of financial aid to their organization. The new policy states that any debtor whose debt amount exceeds over $10,000 has the right to claim debt settlement.
2. New law passed by federal trade commission:
The new law passed by the federal trade commission bans all the debt settlement company to take upfront payments from their customers before successful settlement of their debts. The debt settlement companies now work on contingency basis i.e. they only get paid if your debt is successfully negotiated otherwise they don't get paid at all. This new law has brought back the confidence of people in the debt settlement industry which as under major criticism due to the illegitimate practices which is going on in the industry for many number of years.
3. Recession is over:
Finally with the end of 2009 and starting of 2010 recession came to an end with the world economy coming back on track. People are getting their jobs back. People prefer to live free from their financial burden and are thus settling their debts as quickly as possible.
Debt settlement is a legitimate alternative to filing bankruptcy and often makes sense for consumers on the verge of bankruptcy. There are also other debt relief options available so it would be wise to speak with a debt relief specialist to go over your different options. For a free consultation from a debt relief specialist in your area check out the following link:
Credit Card Debt - 3 Reasons More Americans Are Now Settling Credit Card Debt
