Credit Debt Settlement Act - How To Take Advantage Of New Federal Laws To Settle Credit Debt

Online, October 11, 2010 (Newswire.com) - Credit card debt settlement cases have increased significantly over the past couple years mainly due to more strict bankruptcy laws which were passed. These laws made filing bankruptcy much more difficult and as a result many consumers have opted for debt settlement as a debt relief option. Up until July 28th 2010, entering into a settlement program used to be a very risky decision for consumers. But now new laws have been passed that make debt settlement a much more legitimate option for debt relief.

The Credit Card Debt Settlement Act was passed on July 28th 2010. This legislation effectively bans debt relief companies from collecting upfront fees. They must now reach a successful settlement deal to collect any fee from consumers or small businesses. If your debts don't settle you don't have to pay a dime.

There are also other debt relief options available such as credit counseling or debt consolidation however with the passage of this new legislation, many financial experts would argue that debt settlement is the most effective and least costly option to eliminate unsecured debt . Most settlement cases are negotiated for a 50% reduction of the overall balance. While debt settlement will hurt your credit score in the short run, it is a trade-off to be able to eliminate a significant portion of your unsecured debt.

The best way to convince a creditor to agree to a debt settlement deal is to convince them you are a legitimate candidate for bankruptcy. Since creditors are likely to receive nothing if the consumer were to declare bankruptcy, most are more than willing to take 50% rather than nothing. When consumers enter a debt settlement program they will not be paying their creditors and therefore most creditors will consider the candidate a legitimate candidate for bankruptcy.

Debt settlement is an aggressive debt relief option and should only be considered by consumers that are experiencing a legitimate financial hardship and have at least $10k in unsecured debt. It is not intended for individuals simply looking to get bailed out of their unsecured debts.

The best way to locate legitimate debt settlement companies is through a Free Debt Relief Network . They will be able to provide consumers and small businesses with free consultations and help them determine what debt relief option makes the most financial sense. Debt relief networks are free to use and a good starting point on your way to becoming debt free.

Check out the following link for a free consultation from a top debt relief network:

Free Debt Relief Help