New Debt Settlement Laws - How The New FTC Laws Can Help You Eliminate Credit Card Debt
These new debt settlement laws have shifted the risk from the consumer to the debt settlement company. If your debts don't settle you won't have to pay a dime. These new regulations are indeed a victory for consumers in debt.
Online, August 10, 2010 (Newswire.com) - The FTC recently passed laws regulating the debt relief industry, mainly targeting for-profit debt settlement companies. These laws ban the practice of collecting upfront fees and made the debt settlement process a better deal for the consumer. If your debts don't settle you won't have to pay a dime.
These new debt settlement laws have shifted the risk from the consumer to the debt settlement company. Before these laws were passed consumers had no guarantee that their debts would settle and all fees were non-refundable. It's easy to see how this business model created problems. Shady debt relief companies would collect large upfront fees and basically do nothing else and they could get away with it. Well, now they can't.
The new debt settlement laws make it easier for consumers to eliminate credit card debt. This settlement process does work when done the correct way. The best professional debt settlement companies have established relationships with all the major creditors and can provide consumers significant leverage during the debt negotiation process.
While every case is different, consumers should expect to eliminate credit card debt by 40-60% on average. Debt settlement companies settled over $1 billion in unsecured debts in 2009 alone. This resulted in approximately $400 million being collected for creditors and $600 million being eliminated off the books for debt ridden consumers. Debt settlement negotiators are basically the middle men that try to find a common ground between the creditor and the debtor. Consumers are able to get rid of some of their unsecured debts while creditors are able to collect delinquent funds that they most likely would have never collected had it not been for the debt settlement process.
Debt settlement is a legitimate alternative to bankruptcy but not all consumers will be eligible for it. In order to qualify the consumer must be at least $10k in unsecured debt and also be able to prove a legitimate financial hardship such as a loss of job or medical issue. There are free debt relief networks Free Debt Relief Networks that help consumers locate TASC certified debt settlement companies as well as provide a free consultation to go over all available debt relief options.
If a consumer is going through a financial hardship and understands the risks associated with debt settlement, then it can be a viable way to eliminate credit card debt and clearly is a better alternative to filing bankruptcy.
To locate legitimate debt settlement companies through a free debt relief network check out the following link: