New Bankruptcy Laws - Why The Debt Settlement Industry Saw Significant Growth In 2009
Debt settlement is basically the last stop before filing bankruptcy. When new and more strict bankruptcy laws were passed a couple years ago many debt ridden consumers could not qualify for bankruptcy and decided to opt for debt settlement. In 2009 alone the debt settlement industry settled over $1 billion of unsecured consumer debt. This was significantly higher than previous years and the debt settlement process is starting to be more mainstream as bankruptcy has become much less favorable for the consumer.
Unfortunately, the rapid growth of the debt settlement industry has led to several inexperienced and unethical companies entering the industry. These rogue debt settlement companies were collecting large upfront fees and not following through on their promises. They created a bad name for the entire industry however consumers should understand that legitimate debt settlement services are available. The easiest way to locate legitimate debt settlement services is to use a free debt relief network such as FreeDebtReductionHelp.com. They will qualify debt settlement companies based on performance standards as well as consumer feedback.
Using a free debt relief network like FreeDebtReductionHelp.com will ensure that consumers are able to find legitimate debt settlement companies and avoid those services that might not have the consumerís best interest in mind.
Debt settlement is not for everyone and consumers looking to just get bailed out of their unsecured debts will not qualify. Consumers must be able to prove a legitimate financial hardship and have at least $10k in unsecured debt to qualify for most established debt settlement programs. Consumers who are having trouble or simply unable to pay their unsecured debt consider debt settlement as a legitimate option to avoid bankruptcy.
The typical debt settlement is settled for 40-60% of the original balance and most debt settlement programs last 2-4 years. So instead of paying their creditors, consumers will pay into the debt settlement program until enough funds are built up for the negotiators to go in and negotiate a settlement. Once about 40% of the balance is built up the debt settlement company will present an offer to the creditor. Since the consumer hasnít been making payments for a while the creditor will likely consider them a candidate for bankruptcy and therefore will usually accept the offer for a percentage of the balance rather than nothing.
To locate legitimate debt settlement companies through a top debt relief network check out the following link or call:
- Contact Information
- Michael Smith
- Front Street Financial
- Contact via E-mail
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