New Debt Settlement Laws - No More Upfront Fees Makes Debt Settlement A Much Better Option

Online, February 9, 2011 (Newswire.com) - Up until October 2010, debt settlement companies and other debt relief programs made millions in large part due to their ability to collect upfront fees. It didn't matter if they were successful in settling the debt, the fees were non-refundable. While many consumers were able to successfully settle their debts over the past decade, many more were ripped off. In order to protect consumers seeking debt relief, the Federal Trade Commission recently passed laws that ban debt settlement companies from collecting upfront fees. This makes the process a much more legitimate and financially attractive for consumers seeking debt relief. If they don't settle the debts, you don't pay a dime.

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".

Debt settlement is intended only for individuals and small businesses that are struggling to pay their bills. If you are struggling to pay even your minimum monthly payment then debt settlement is probably your best option to avoid bankruptcy . Most settlements result in 40-60% of the debt balance being eliminated while paying back the rest in one lump sum or monthly payments.

Credit card companies and other creditors of unsecured debt are willing to make debt settlement deals. The last thing they want you to do is file bankruptcy. Creditors of unsecured debt typically receive little to none of their money back when the debtor files bankruptcy. Therefore if they believe a debtor is on the verge of bankruptcy than they would be more than willing to accept 50% of their money back rather than nothing.

Debt settlement programs are 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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