New Debt Settlement Laws - Why Debt Settlement Is A Better Option Now
New debt settlement laws make settlement a better option compared to bankruptcy filing
. Settlement industry earned a bad reputation which forced several people to get back to the traditional method of bankruptcy filing even if it meant that the financial life comes to a halt. They felt that getting cheated and losing more money is what they don't want and found it better to tolerate a reduced FICO score!
The question that lingers is that, "why at all did the debt settlement industry earn a bad reputation?" The cause for this was found to be the existence of shady companies which sprang up in the industry. These fraud companies cheated the consumers taking advantage of the prevailing rule of upfront fee collection from the consumers seeking help with their debt. As a general rule the consumers are still required to pay advance fees to the settlement companies they hire.
These flimflam companies collected huge fees and after sometime, they came back to the consumers and reported that the negotiation with the creditors failed whereas, the reality has something different to say. These companies never approached the creditors and the consumers kept on receiving harassment and collection calls from the collection agencies hired by the creditors. Eventually, the consumers lost on all fronts. They had to pay back the creditors in full and they also lost some significant amount of dollars in form of service fee they paid to the hoax settlement companies. Some consumers even reported of being sued by the creditors for non-repayment.
The Federal Trade Commission came to the rescue of the consumers with new debt settlement laws. The new law will get into effect from 27th October. The law will put a ban on the collection of upfront fees from the consumers and will eventually give a fair-land-play! The settlement companies will be required to first fulfill their commitment of eliminating debt by at least 50% and it is then that they can ask for fees from the consumers.
With this new law in place, the scam companies will no longer be able to survive. Only the most authentic companies with a reputable background and ample capital strength will be able to survive. This will give a chance to the consumers to actually get rid of their debts and they can enjoy a debt free like. It is this new debt settlement law which makes settlement a better option now!
Debt settlement is a legitimate alternative to filing for bankruptcy. There are also other debt relief options available which is why it would be wise to speak with a debt relief specialist.
New Debt Settlement Laws - Why Debt Settlement Is A Better Option Now
By: Blair Alfred
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