Credit Card Relief - Why Credit Card Debt Settlements Are Expected To Increase In 2011
The reckless lending standards in America over the past two decades has put millions of Americans deeply in debt and in search of credit card relief. Here we'll take a look at why many experts are predicting an increase in debt settlements in 2011.
Online, January 12, 2011 (Newswire.com) - The reckless lending standards in America over the past two decades has put millions of Americans deeply in credit card debt and in search of credit card relief . There are several things consumers can do to get financial relief and one of these options is known as debt settlement. Thanks to new federal laws, many experts are predicting that debt settlement filings will increase significantly in 2011.
The reason many financial experts believe this is because of the new credit card relief laws recently passed by the Federal Trade Commission. These laws target debt relief programs and ban them from collecting upfront fees. Now when consumers enter a credit card relief program they will not have to pay a dime until their debts are settled for an acceptable percentage, typically 35%. So if you have $20,000 in credit card debt, the relief company must eliminate at least $7,000 of this in order to collect a fee. So basically if they don't perform, you don't pay.
These new laws take much of the inherent risk out of entering a debt settlement programs . Before these laws were passed, consumers had to pay their fees upfront and had no guarantee of the debts actually settling. If they didn't settle, the consumer could not get their fee back. This type of business model led to many consumers getting ripped off by predatory companies but thanks to these new laws it is not possible anymore.
Credit card relief programs are only intended for individuals and small businesses that going through a financial hardship. Most programs also require that you have at least $10,000 in unsecured debt. These programs are ideal for those that are struggling to pay their bills each month and are on the verge of bankruptcy.
If you have over $10,000 in unsecured debt it may be a wise financial decision to consider a debt settlement. Due to the recession and overwhelming amount of people in debt, creditors are having no choice but to agree to debt settlement deals. To find legitimate debt reduction help in your state and get free debt advice then check out the following link.
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