subject: New Debt Settlement Laws - Understanding New Restrictions On The Debt Relief Industry [print this page] Debt settlement is one of the best debt relief methods people use nowadays for their debt. It can be comparable with bankruptcy but it doesn't come with the same disadvantages. When it comes to financial settlement you don't have your assets sold, your name doesn't go in the paper, and you can still take another loan in the next years without having to wait more than 7 years.
This is why a settlement is much better than bankruptcy even though bankruptcy can clear your debt completely. What this solution does is a reduction over your debt, but that reduction can be even bigger than half of what you owe and the rest of it can still be paid in installments. So, financial settlement doesn't clear the whole debt but it offers a great solution for those who don't want their credit score to be harmed by a bankruptcy lawsuit.
When you choose financial settlement you have to be eligible for it. It only works for people who have more than ten thousand dollars of debt which has to be unsecured. The people also need a proof that they are in a bad financial situation, like the state of their finances or a medical bill that can't be covered by their income. It's difficult nowadays to make sure that you clear your debt without the right person representing you. This is why a settlement company is one of the key elements in this case.
They represent you for a small fee that can be deducted from the amount they reduce. With the new restrictions for debt settlement companies, this debt relief option has become even more reliable for people. Debt settlement companies used to ask for an upfront fee and the fake ones usually left without helping their client. Nowadays, the settlement companies cannot choose that fee anymore. They can be paid only when they reach an agreement with the creditor and only when they will manage to have a solution for their client. This makes things safer for clients and even for the honest debt settlement companies which will stop being harassed for being frauds.
Debt settlement is a viable alternative to filing bankruptcy. Most consumers are able to eliminate at least 60% of their unsecured debt while avoiding many of the negative consequences with filing bankruptcy. If you are over $10k in unsecured debt you will be eligible for debt settlement.
New Debt Settlement Laws - Understanding New Restrictions On The Debt Relief Industry
