New Debt Settlement Laws - How New Laws Make Debt Settlement A Better Option For Consumers

Online, August 1, 2010 (Newswire.com) - The Federal Trade Commission recently passed new legislation aimed to reform the debt relief industry. For profit debt settlement companies will no longer be able to collect advance upfront fees without actually settling the debt. This is good news for consumers and the debt settlement process as a whole.

The ban on advance fees will go into effect on October 27th. Debt relief companies will still be able to get paid for their services but will not be able to collect fees from consumers until they are able to actually settle the debts. This new legislation will push many of the shady debt settlement companies out of the market. Only the large and most legitimate debt relief companies will be able to survive when these laws go into place.

The advance fee ban is great news for consumers in debt. The debt settlement process will still survive but there will be much less risk on the consumer's behalf. The days of paying large upfront fees without getting any real debt relief service are over. These companies will only be able to get paid when they actually make a deal with the creditors and settle the debts.

The legitimate debt settlement companies that have enough capital to survive will ultimately benefit from this legislation. First of all there's going to be far less competition. The small and shady debt relief services will not be able to survive with the advance fee ban. These were the companies giving the industry a bad rap in the first place so the few debt relief services that do survive will benefit by having a cleaner reputation amongst the American public.

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