Credit Card Debt Relief Act 2010 - How New Laws Help Consumers Settle Credit Card Debt
On July 28th 2010, the FTC banned debt settlement companies from collecting upfront fees. This means that consumers who enter into a debt settlement program will not have to pay a fee until their debt are successfully settled for an agreeable amount.
September 7, 2010 (Newswire.com) - The process of debt settlement or "debt negotiation" is now a much better deal for consumers thanks to new laws passed by the Federal Trade Commission. On July 28th 2010, the FTC banned debt settlement companies from collecting upfront fees. This means that consumers who enter into a debt settlement program will not have to pay a fee until their debt are successfully settled for an agreeable amount. The Credit Card Debt Relief Act 2010 is indeed a victory for Americans with too much credit card debt.
This legislation will put all shady debt relief services out of business. They will no longer be able to sit back and collect upfront fees. Those days are over. However the legitimate debt settlement companies that actually have a proven track record of negotiating debt settlement deals will be able to survive this legislation. They will have enough confidence to make a profit on the back end when they actually settle the debts.
So why would credit card companies and other creditors of unsecured debt agree to reduce a consumer's debt by as much as 60%? The simple answer is that they don't want them to file bankruptcy. They know that if the consumer files bankruptcy they will likely not collect any of their money back. With an ever increasing amount of Americans on the verge of bankruptcy, creditors have no choice but to agree to debt settlement deals.
The Credit Card Debt Relief Act 2010 will take away much of the inherent risk that was typically associated with debt settlement. Consumers will no longer have to pay fees to these debt relief companies unless they actually perform. Sounds fair to me. If a debt relief service is able to cut your debt balance in half then they deserve to collect a fee. But now they have to earn it.
There are other personal credit card debt relief options available such as credit counseling, debt consolidation, and bankruptcy. Debt settlement is considered the best alternative to filing bankruptcy and is only intended for consumers that are experiencing a legitimate financial hardship and have at least $10k in unsecured debt. Bankruptcy should always be the last option for debt relief. Either way, it would be wise to speak with a Debt Relief Specialist that will go over all your options for free.
To speak with a certified debt relief specialist for a free debt consultation check out the following link: