New Laws For Debt Relief Programs - How The New FTC Rules Make Debt Settlement A Better Option

Online, August 3, 2010 (Newswire.com) - On July 28th, new rules regulating the debt relief industry were passed by the FTC. These laws mainly target for profit debt settlement companies and ban the practice of collecting fees until debts are actually settled. Before this legislation, consumers had no guarantee that their debts would be settled and many ended up paying fees without getting any results. Now, consumers who enter into a debt relief program can be guaranteed that if their debts aren't settled they won't have to pay a dime. Indeed, a victory for consumers in debt.

This new legislation is expected to weed out all the shady debt settlement companies that have been giving the industry a bad reputation. These companies simply won't be able to survive under the new regulations. Only the largest and most legitimate debt relief programs will be able to survive. Companies that have been settling consumer's debt legitimately will have the confidence to collect on the back end instead of collecting fees up front.

Before this legislation, when consumers entered into a debt relief program they were taking a large risk. Now this risk has been severely mitigated by this new legislation. Consumers will only have to pay fees when their debts are actually settled. The debt settlement industry is finally legitimate and these new laws make the option much more attractive to consumers in debt.

The debt settlement companies that do survive will be backed by attorneys and have the capability to fully protect consumers from creditor harassment and potential lawsuits. A legitimate debt settlement company that is fully backed by attorneys will know what preventative measures to take for a successful settlement. This includes being enrolled in UCAN. United Consumer Advocacy Network, LLC (UCAN) is a consumer advocacy company that vigorously defends the rights of consumers against unlawful, unfair, and deceptive practices by financial institutions, particularly creditors and their bill collectors. A legitimate debt settlement company will automatically enroll consumers in UCAN and take other legal actions to help the debt settlement process.

The debt settlement process does work. In fact, in 2009 alone the debt settlement industry settled over $1 billion in unsecured debt which resulted in eliminating $600 million of consumer debt. Creditors also received $400 million in collected debts from debt settlement so it is difficult to argue that debt settlement is not a legitimate industry.

The most important aspect about this legislation is that the process of debt settlement or debt negotiation has become much more legitimate. The risk has been taken off the consumer and transferred to the relief services. At the end of the day, debt settlement programs will be more effective because now the companies must work and perform for their fees. These new laws will increase the amount of successful settlements and allow consumers a better option for debt relief.

Debt settlement is not the only option for debt relief. There are also other viable options on the marketplace which is why it would be wise to speak with a certified specialist. A certified debt relief specialist will provide free consultation and over all your available options.

Check out the following link for free debt relief help:

Free Debt Relief Help