Credit Debt Settlement Companies - How New Federal Laws Protect Consumers Seeking Debt Relief
As a result of new federal lwas, debt settlement has become a much better option for consumers and small businesses on the brink of bankruptcy. With the official ban of upfront fees, consumers won't have to pay a dime until their debt settles.
Online, January 31, 2011 (Newswire.com) - Credit debt settlement companies have been around for nearly a decade yet just until recently they were probably best to stay away from. Now however, as a result of new federal legislation, debt settlement has become a much more legitimate option for consumers and small businesses on the brink of bankruptcy.
Now when you join a credit debt settlement program , you will not have to pay a dime until your debts are settled for an acceptable percentage. The minimum performance standard used by debt settlement companies is 35%. This means that they must be able to completely eliminate at least 35% of your overall balance in order to collect a fee. So if you have a $20,000 credit card balance, the settlement company must eliminate at least $7,000 of that balance in order to collect a fee. If they don't perform, you don't pay.
There are more consumers and small businesses in need of credit card debt relief today than there has ever been before. Many consumers simply cannot afford to pay back their credit card debt and are on the verge of filing bankruptcy. For those that are on the verge of bankruptcy it would make more financial sense to try and make a debt settlement deal before filing. Due to the massive amount of people experiencing a financial hardship, credit card companies are having no choice but to make debt settlement deals.
What used to be a very risky option, in joining a debt settlement program , is now much less risky. Consumers won't have to worry about getting ripped off cause they won't be paying their fees until the debts actually settle. If they don't settle the debt then they don't get paid. There are some companies that try to get around this by having lawyers collect fees. Theses attorney backed debt settlement programs should be avoided at all cost. Make sure to only do business with no advance fee debt settlement programs or the "NAF model".
Credit debt settlement is not the only option for debt relief. There's also credit counseling and debt consolidation. It would be wise to speak with a debt relief specialist that can go over your particular situation and help determine what debt relief option makes the most financial sense for you.
Check out the following link to speak with a debt relief specialist that offer an unbiased opinion on what, if any, debt relief option makes financial sense for you.
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Tags: bankruptcy, credit card debt bankruptcy, credit card debt relief, credit debt settlement programs, debt relief, debt relief companies, debt relief laws
