Debt Settlement Act 2010 - How New Federal Laws Make Debt Settlement A Better Debt Relief Option
Debt settlement used to be a very risky decision for consumers and small businesses. Not anymore. New laws recently passed by the Federal Trade Commission which regulate the debt settlement industry have made this a much more legitimate option for consumers. Debt settlement companies are now banned from collecting upfront fees for their services. Now consumers and small businesses that opt for debt settlement won’t have to pay a dime until their debts are actually settled.
The new debt settlement legislation is expected to push out all the shady debt relief services that have been taking advantage of consumers for the last 5 years. New bankruptcy laws passed in 2005 made debt settlement a more attractive decision for consumers seeking debt relief. The problem was that there were very little regulations for these debt relief services and many of them simply collected upfront fees without providing any real service. This is not possible any more.
The legitimate debt settlement companies that have enough capital to survive will ultimately benefit from this legislation. First of all there’s going to be far less competition. The small and shady debt relief services will not be able to survive with the advance fee ban. These were the companies giving the industry a bad rap in the first place so the legitimate debt relief services that do survive will ultimately benefit by having a cleaner reputation amongst the American public.
In order to qualify for a debt settlement consumers must have at least $10k in unsecured debt and be experiencing a legitimate financial hardship. This option is considered an alternative to filing bankruptcy. It will still have a negative impact on an individual’s credit score but not nearly as bad as filing bankruptcy. It is very important however that consumers know how to locate legitimate debt relief services. A good site to find legitimate debt settlement services is FreeDebtReductionHelp.com
A credit card debt settlement will typically affect a consumers’ credit score for 2-4 years while bankruptcy will affect a credit score for at least 7 years. Any debt settlement company that says credit scores will not be affected are not being truthful and probably not worth doing business with. Consumers who opt for debt settlement ultimately make the decision that they’d rather eliminate a bunch of their unsecured debt rather than have a high credit score.
Debt settlement is not the only debt relief option. There’s also credit counseling and debt consolidation. Check out the following link to visit a free debt relief network. They will provide free consultations to help consumers determine what debt relief option makes the most financial sense for them. They also will be able to provide a list of the top performing and most established debt settlement companies.
Or Call: 877-853-6466
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- Michael Smith
- United Debt Associates
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