The Debt Settlement Industry Heads To Congress To Debate The Legitimacy Of Debt Settlement

Online, April 25, 2010 (Newswire.com) - The debt settlement industry saw a major growth in 2009 and has recently come under an increased scrutiny from members of congress. A Federal Trade Commission investigation into the debt settlement industry revealed several companies conducting business in an unethical manner. A representative for the United States Organizations For Bankruptcy Alternatives (USOBA) responded to the legitimacy of the debt settlement industry recently at a congressional hearing.

The proponents for debt settlement laid out some facts. The truth of the matter is that the debt settlement industry settled over $1 billion of unsecured debt in 2009. This resulted in approximately $400 million being collected for creditors and $600 million being eliminated for consumers.

The debt settlement industry saw significant growth over the past couple years as bankruptcy laws have become much tougher and consumer debt is rising at alarming rates. Creditors are realizing that they would be better off taking a settlement deal rather than risking the chance of the consumer declaring bankruptcy and getting none of their money back. 50% of a credit balance is better than nothing. Also, creditors get a major tax break when they make a debt settlement deal.

While there are many debt settlement companies that are legitimate and can realistically eliminate 50% of a consumers' unsecured debt, a small number of companies have given the industry a black eye. The single most important thing that a consumer can do to locate a legitimate debt settlement company is to ensure that the company is a member of The Association Of Settlement Companies. TASC is the regulatory body in the debt settlement industry and holds its members to the highest ethical and performance standards. Every legitimate debt settlement company will be a part of this accredited organization and if they are not it should be a red flag.

In order to qualify for a debt settlement a consumer must be at least $10k in unsecured debt and be able to prove a financial hardship. This is not for everyone. The consumer must be able to prove a legitimate financial hardship and be struggling to make their monthly payments.

Debt Settlement, just like every other industry has it's share of unethical companies that are concerned more about their bottom line than the consumers' well being. If consumers understand the risks and know how to identify legitimate companies then debt settlement can be a viable option to avoid bankruptcy.

To locate legitimate debt settlement companies for some free debt help check out the following link:

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