Credit Card Debt Relief Reform Act - How New Laws Make It Easier To Eliminate Credit Card Debt

Online, August 11, 2010 (Newswire.com) - New laws recently passed by the FTC make it easier for consumers to eliminate credit card debt. The new laws banned debt settlement companies from collecting upfront fees until they actually settle the debts. This means that consumers who enter into a credit card debt settlement program won't have to pay a dime until the debts are settled. Therefore, the risk of entering into a debt settlement has been taken off the shoulders of the consumer and placed on the debt settlement company. If they don't perform they don't get paid.

Considering the debt settlement industry is now a performance based industry, one would have to assume that the success of credit card debt settlements will increase. The debt negotiators will be much more motivated to reach a successful settlement. The days of collecting large upfront fees with no guarantee of performance are over. This credit card debt relief reform act is indeed a victory for consumers in debt.

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.

These new laws are expected to put all the shady debt relief companies out of business. Only the legitimate debt settlement will survive. Those companies that have been successfully settling consumers' debts will have enough confidence to collect their fee on the back end when to debts are settled.

In order to qualify for debt settlement a consumer must be at least $10k in unsecured debt and be able to prove a financial hardship. This is not for everyone. The consumer must be able to prove a legitimate financial hardship and be struggling to make their monthly payments.

There are also other credit card debt relief options available including credit counseling and debt consolidation. It would be wise to speak with a debt relief specialist to go over all your options. Check out the following link to speak with a certified debt relief specialist for a free consultation:

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