New Debt Settlement Laws - How The New FTC Laws Make Debt Settlement More Legitimate
New laws regarding the debt settlement industry were recently passed by the FTC. These new regulations have made the debt settlement industry much more legitimate and clearly a better alternative than filing bankruptcy.
Online, August 12, 2010 (Newswire.com) - There are more Americans deeply in credit card debt than at any other point in our history. This is mainly due to the irresponsible and unregulated lending practices over the last decade. For consumers with $10k or more in credit card debt it will take nearly an entire lifetime to pay back the debt in full. Credit card companies are jacking up their interest rates making even the monthly minimums difficult to pay for many. If consumers are struggling to pay their monthly payments or just don't want to spend their whole lives trapped in debt they often opt for debt settlement instead of filing bankruptcy.
On July 28th 2010 new regulations were passed by the FTC which bans the practice of debt settlement companies collecting large upfront fees with no performance guarantee. The days of these debt relief services taking consumers, money without actually settling the debts are over. Now they will have to actually settle the debts to get paid. These new regulations have made the debt settlement industry much more legitimate and clearly a better alternative than filing bankruptcy.
Debt settlement is a debt relief option that lets consumers make a deal with their creditors to pay back less than they actually owe. This has become more popular over the past couple years in large part due to the "bailout" attitude set in place by the federal government. If these large financial institutions are being bailed out then many consumers believe they can too. While debt settlement is not really a bailout and definitely not sponsored by the government, it is a legitimate way for consumers going through a financial hardship to eliminate some of their unsecured debts. In 2009 the debt settlement industry was responsible for settling over $1 billion in unsecured debts saving debt ridden consumers nearly $600 million.
These new regulations are expected to put all of the shady debt relief services out of business. Only the legitimate debt settlement companies that have actually been settling debts will be able to survive. They don't make their money until the debts are actually settled now so only those companies with enough confidence to collect fees on the back end will be able to survive.
Using a debt settlement negotiation program for credit card debt relief does not come without consequence. Consumers will experience a short term drop in their credit scores however once the debt is settled it will be much easier to build back due to the more favorable debt to income ratio. The debt to income ratio is one of the biggest factors in a person's overall credit score. Once a large amount of debt gets settled, creditors are much more willing to lend again.
Debt settlement negotiation is a legitimate alternative to filing bankruptcy. If a consumer has over $10k in unsecured debt and is currently experiencing a financial hardship then debt settlement can make financial sense.
To find legitimate debt negotiation programs that have proven track records of settling consumer debts then check out the following link:
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Tags: credit card debt, credit card debt settlement act, debt negotiation, debt relief, debt settlement, unsecured debt
