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Credit Card Applications » News » Other » New laws in debt settlement help make the industry more legitimate

New laws in debt settlement help make the industry more legitimate

August 24, 2010 | Updated on August 24, 2010
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The content is accurate at the time of publication and is subject to change.

The Federal Trade Commission passed new laws regarding credit debt settlement that has been affecting the industry. It is in place to ban debt relief services from charging consumers upfront with fees. Consumers dealing with debt can rejoice with this law as they do not have to pay any money until the debt settlement process is actually done and their debts are settled.

There have been notoriously high fees collected upfront by numerous debt settlement companies without resolving the debts properly. The industry has been gaining a negative reputation but this law will pout the fraudsters out of business soon enough. Only those with legitimate operations are going to last once the law is in place.

Now credit card debt settlement companies can confidently collect fees once the actual debts are closed if they have been doing things legitimately. It is also a motivation for these agencies to work to provide better services that are legal and credible to consumers as they will not receive payments until the debts are closed by the company.

Credit card companies and other unsecured debt agencies are willing to come forward and help the debt settlement process survive. They would rather have the debts settled than have consumers declare bankruptcy. When there is a bankruptcy filed the consumers get nothing and hence it is a total loss for creditors if debt settlement as a whole goes out.

This legislation takes the risks off the consumers back and puts it onto the debt relief services that will have to pull up their socks and deliver results. Debt settlement will grow effective and successful settlements will increase letting consumers have a better option for relief from debts.

Consumers who have at least $10k in unsecured debts and are unable to deal with it are the ones that will be eligible for debt settlement services. The settlement process will be less risky for the customers and will be attempted by more of them before trying bankruptcy as a last resort.

There are numerous free debt relief networks which will help to find the legitimate companies that do debt settlement. When it is a respected company with the right affiliations then there will proper consultations provided. Thus the customer can gauge which means of relief is well suited and will save them from spending more money on frauds and scams. This new legislation spells hope for the consumers struggling with large debts.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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