New Debt Settlement Laws - New Government Regulations Affecting Consumer Debt
The settlement industry earned a bad reputation because of the fraud companies which cheated the consumers. They made fake promises and eventually did not keep their promise. It is because of this reason that the new debt settlement laws have been passed on July 29th by the Federal Trade Commission. These laws will be effective from October 27th.
These new government regulations will not only be affecting the consumer debt but also the settlement industry as a whole. This new legislation was passed to reform the debt relief industry. The settlement companies will no longer be allowed to collect upfront fees and make profits. They will have to first eliminate the debts of the consumers by the promised amount and then they can collect their fees. This regulation has been put into place because it was found that a number of companies which took upfront fees from the consumers later came and said that the negotiation with the creditor failed and thus, the credit of the consumer cannot be cut down. This is how the shady and the fraud companies made money without actually helping the consumer.
With these new debt settlement laws, the settlement companies will no longer be able to collect advance fees. This ban on advance fees will push the shady companies out of the market. Only the genuine companies which have good reputation and enough financial strength will be able to survive in the market. The companies will now have to first negotiate and cut down the credit of the consumers and then they can collect the fee for their services.
These new government regulations have wiped out the risk of entering a relief program without actually having any guarantee of getting relief. With this new law, the companies which have a good track record and large capital base will survive and the fraud companies will be flushed out of the industry. This will repair the reputation of the debt settlement industry as a whole and will attract more and more people. This is because of the fact that the risk element for the consumers will be eliminated by these new debt settlement laws.
Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement.
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These new government regulations will not only be affecting the consumer debt but also the settlement industry as a whole. This new legislation was passed to reform the debt relief industry. The settlement companies will no longer be allowed to collect upfront fees and make profits. They will have to first eliminate the debts of the consumers by the promised amount and then they can collect their fees. This regulation has been put into place because it was found that a number of companies which took upfront fees from the consumers later came and said that the negotiation with the creditor failed and thus, the credit of the consumer cannot be cut down. This is how the shady and the fraud companies made money without actually helping the consumer.
With these new debt settlement laws, the settlement companies will no longer be able to collect advance fees. This ban on advance fees will push the shady companies out of the market. Only the genuine companies which have good reputation and enough financial strength will be able to survive in the market. The companies will now have to first negotiate and cut down the credit of the consumers and then they can collect the fee for their services.
These new government regulations have wiped out the risk of entering a relief program without actually having any guarantee of getting relief. With this new law, the companies which have a good track record and large capital base will survive and the fraud companies will be flushed out of the industry. This will repair the reputation of the debt settlement industry as a whole and will attract more and more people. This is because of the fact that the risk element for the consumers will be eliminated by these new debt settlement laws.
Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement.
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