Credit Card Debt Settlement - How New Laws Help You Avoid Bankruptcy And Settle Credit Card Debt

Online, October 19, 2010 (Newswire.com) - Do you have too much credit card debt and feel like you're on the verge of bankruptcy? If so you aren't alone. Millions of Americans are burdened my massive credit card debt balances. For nearly two decades credit card companies have been recklessly issuing high interest credit cards to anyone who wanted one. In the past consumers and small businesses that couldn't afford to pay back their debt would file bankruptcy. However new laws that were recently passed make it much easier for consumers to avoid bankruptcy and settle credit card debt.

On July 28th 2010, the Federal Trade Commission passed the Credit Card Debt Settlement Act. This legislation effectively bans all debt settlement companies from collecting upfront fees from their clients. Now consumers that enter into a debt settlement program will not have to pay a dime until they actually settle their debt balances. This indeed makes it much less risky for consumers to try and settle credit card debt via a debt settlement process.

Credit card debt settlement or debt negotiation is where creditors of unsecured debt agree to take partial payment and forgive the rest. Creditors typically make debt settlement deals with consumers and small businesses that are on the verge of bankruptcy. They are willing to take partial payment because they know that if the consumer were to be accepted for a Ch. 7 bankruptcy they would likely receive little to none of their money back. 50% of their money back is better than nothing.

The advance fee ban is great news for consumers in debt. The debt settlement process will still survive but there will be much less risk on the consumer's behalf. The days of paying large upfront fees without getting any real debt relief service are over. These companies will only be able to get paid when they actually make a deal with the creditors and settle the debts.

Credit card 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 that help consumers locate TASC certified debt settlement companies as well as provide a free consultation to go over all available debt relief options.

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

Free Debt Relief Advice