Debt Settlement Negotiation - How New Federal Laws Make Debt Settlement Less Risky For You
Online, October 17, 2010 (Newswire.com) - Debt settlement used to be a very risky option for debt relief. Not anymore. New legislation from the Federal Trade Commission is making the debt settlement industry much more legitimate. Now consumers that enter into a debt settlement negotiation program will not have to pay a fee until their relief company performs and actually settles the debt.
For consumers with too much credit card debt this is great news. Any type of unsecured debt can be negotiated and settled for less but credit card debt is the most common. Credit card companies have been irresponsible issuing unlimited credit to American consumers for the past decade. They have no problem issuing credit, putting people into debt, and collecting millions of dollars in interest every year.
However now, coming off one of the worst recessions since the great depression there are more consumers and small businesses on the verge of bankruptcy than ever before. Credit card companies and other creditors of unsecured debt are extremely worried about the rise in delinquent accounts. Many consumers simply cannot afford to pay even their minimum payments each month and creditors have no option but to make debt settlement deals.
The last thing they want you to do is declare bankruptcy. If a consumer or small business is accepted for bankruptcy creditors of unsecured debt know that they likely will receive little to none of their money back. To prevent taking a complete loss, credit card companies and other creditors of unsecured debt are making more debt settlement deals . With the average settlement deal being negotiated for 50% of the actual balance, creditors are more than will to make deals. 50% of their money back in better than nothing.
Before July 28th 2010, entering into a debt settlement program used to be a very risky decision. The main risk was associated with paying upfront fees. This risk has been nullified with the new FTC laws. Now the debt settlement industry is a performance based service and consumers won't have to pay a dime their balances are actually settle.
The new Federal Laws have pushed out all the shady companies and now only the legitimate debt settlement services are left. The legitimate debt relief companies that have actually been settling debts for the last 5 years will have enough confidence to collect their fee on the back-end when they negotiate a successful settlement deal.
If a consumer or small business is going through a financial hardship and understands the risks associated with debt settlement, then it can be a viable way to eliminate unsecured debt and clearly is a better alternative to filing bankruptcy.
To locate legitimate debt settlement companies through a free debt relief network check out the following link:
