How New Bankruptcy Laws Make Debt Settlement A Legitimate Option

Online, May 24, 2010 (Newswire.com) - While congress is attacking the debt settlement industry for unethical practices they are conveniently forgetting that the core problems originated with the passage of the new bankruptcy laws. When new bankruptcy laws were passed in 2005 congress made it much more difficult for consumers to file bankruptcy. With no other viable options available, many consumers opted for debt settlement. Debt settlement is the closest viable option on the marketplace for consumers who are on the verge on bankruptcy. While there is no doubt that debt settlement does not come without consequence, it is often much better than filing bankruptcy.

Getting a debt settlement will negatively affect a consumer's credit score for typically 2-4 years while bankruptcy takes at least 7 years on average. With debt settlement, the consumer will pay into a savings account instead of paying their creditors. When a balance builds up to around 50% of the balance, the debt settlement negotiator will attempt to settle the debt. Knowing that if the consumer were to file bankruptcy they would receive nothing, the creditor often will take 50% of their money back rather than take a complete loss.

Debt settlement has been around for around 10 years however it has never gained so much popularity and controversy than it has the last couple years. The recent changes in the bankruptcy laws made it more difficult for debt ridden consumers to qualify for debt relief. When millions of consumers could no longer qualify for bankruptcy many of them decided to go the debt settlement route. This rapid growth in the debt settlement industry unfortunately led to several unethical companies entering the market taking advantage of debt ridden consumers. A recent push from congress to clean up the industry has resulted in several debt settlement companies being shut down.

Unfortunately many debt settlement companies are taking advantage of desperate consumers and making promises they simply cannot fulfill. This is why it is very critical for consumers to know how to locate legitimate debt settlement companies that have a proven track record in settling consumer debts. The easiest way to find legitimate companies is to visit a free debt relief network . There, consumers will be able to locate the best debt settlement companies in the country and also receive a free debt consultation to determine what the best debt relief option is. These networks are free to use and have helped thousands of consumers avoid being ripped off.

To locate the top performing debt settlement companies in your area for free debt relief advice check out the following link:

Legitimate Debt Settlement Companies