How New Bankruptcy Laws Make Debt Settlement A Better Option For Credit Card Debt Relief

Online, July 25, 2010 (Newswire.com) - New bankruptcy laws recently passed in 2005 are starting to take a toll on the American consumer. These new laws make the process of filing bankruptcy much more difficult and consumers in debt have been searching for other debt relief options. One of these options is debt settlement . This is basically the closest option to filing bankruptcy and is only intended for consumers who are experiencing a legitimate financial hardship and have at least $10k in unsecured debt. While this option doesn't come without consequence it can be a legitimate way to avoid bankruptcy and eliminate unsecured debt.

Debt settlement companies settled over $1 billion in unsecured debts in 2009 alone. This resulted in approximately $400 million being collected for creditors and $600 million being eliminated off the books for debt ridden consumers. Settlement negotiators are basically the middle men that try to find a common ground between the creditor and the debtor. Consumers are able to get rid of some of their unsecured debts while creditors are able to collect delinquent funds that they most likely would have never collected had it not been for the settlement process.

Debt settlement is not a magic bullet to get out of debt. There are negative consequences including a negative effect on credit scores. If a debt settlement company tells a consumer that their credit score will not be affected they are not being truthful and should be avoided at all costs. Unfortunately there are many companies out there that promise things that they simply cannot follow through on and these inexperienced and unethical companies have given the entire industry a black eye.

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. If a consumer is going through a financial hardship and understands the risks associated with debt settlement, then it can be a viable way to eliminate unsecured debt and clearly is a better alternative to filing bankruptcy.

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

Free Debt Relief Help