Credit Card Debt Settlement - A Legitimate Option For Debt Relief Or A Scam?

Online, July 18, 2010 (Newswire.com) - Credit card debt settlement has been around for around 10 years however it has never gained so much popularity and controversy than it has over the last couple years. The recent changes in the bankruptcy laws made it more difficult for debt ridden consumers to qualify for debt relief. When millions of consumers could no longer qualify for bankruptcy many of them decided to go the debt settlement route.

This rapid growth in the debt settlement industry unfortunately led to several unethical companies entering the market taking advantage of debt ridden consumers. A recent push from congress has shut down many of these companies and imposed stricter regulations to protect consumers.

So is credit card debt settlement a legitimate option for debt ridden consumers?

This option is certainly not for everybody but does make financial sense for many individuals. Debt settlement is basically the last step before filing bankruptcy. Consumers must have at least $10k in unsecured debt and be experiencing a legitimate financial hardship to qualify for most programs. If someone is having a difficult time paying their minimum payments to their creditors then this is the best option to avoid bankruptcy and pay back at least some of the debt.

Most legitimate debt settlement programs last 1-4 years and after that the consumer is debt free. This doesn't come without consequence however. The consumer's credit score will be negatively affected and collection calls are likely to increase in the short term. Many consumers that have opted for credit card debt settlement have decided that they would rather eliminate 50% of their balance rather than have a high credit score. It should be noted however that once the debt is settled the consumer will be able to build back credit more quickly as their debt to income ratio will be much better.

So why would the credit card companies agree to take only 50% of the actual balance. The main reason is that if the consumer were to file bankruptcy they would likely receive nothing. With an ever increasing amount of people on the verge of bankruptcy, creditors of unsecured debt are having no choice but to partake in debt negotiation deals. It is in their best financial interest to collect at least some of their money rather than none at all.

If a consumer wants to find legitimate debt settlement companies the best place is through a Debt Relief Network . The top debt relief networks make sure the companies are certified and have a proven track record in settling consumer debt. They will make sure the debt settlement company is an accredited member of The Association Of Settlement Companies (TASC) and have the legal authority to negotiate debt settlement deals.

To locate legitimate debt settlement companies through a top debt relief network check out the following link:

Free Credit Card Debt Help