Credit Card Settlement Programs - How New Bankruptcy Laws Make Other Debt Relief Options Better
Consumers up to their neck in credit card bills should always consider bankruptcy to be their very last option. New federal debt relief laws have made other option much more financially advantageous.
Online, December 7, 2010 (Newswire.com) - Credit card settlement programs became popular after 2005 when the new bankruptcy laws were passed. These laws made filing bankruptcy much more difficult to qualify for and far less advantageous for consumers. As a result many consumers opted for debt settlement programs but and new federal laws actually favor these settlement programs over bankruptcy.
If you have over $10,000 in unsecured debt such as credit card debt or medical bills, a debt settlement can be an effective way to eliminate up to 60% of your balance while avoiding the pitfalls of filing bankruptcy. Up until October 27 2010, entering a credit card settlement program was a very risky decision. This is because their was no performance guarantee and consumers had to pay their fees upfront. Therefore if the settlement company could not settle your debt, you ended up paying a fee without getting any real service. This lead to multiple people being ripped off but this is not possible anymore.
The new FTC laws that were recently passed forbid debt relief companies from collecting upfront fees. They now must actually live up to their word and eliminate at last 35% of your unsecured debt in order to collect a fee. If they don't perform, you don't have to pay a dime.
Credit card companies and other creditors of unsecured debt are making more settlement deals than ever before. This is mainly due to the massive amount of consumers on the verge of bankruptcy. Creditors or unsecured debt know that if you were to get accepted for bankruptcy they would likely receive very little of their money back. Knowing this, if they believe you are a legitimate candidate for filing bankruptcy, they are more than willing to negotiate and settle you balance for less. 50% of their money back is better than nothing.
Debt settlement is seen as a legitimate alternative to filing bankruptcy. If you have over $10,000 in unsecured debt and are experiencing a financial hardship then a debt settlement can make financial sense. Check out the following link for a free consultation from a certified debt relief specialist in your area.
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Tags: bankruptcy, credit card debt bankruptcy, credit card debt relief, credit card settlement programs, debt relief, debt relief companies, debt relief laws
