On October 27th 2010, new federal credit card debt settlement laws were passed which make it much less risky for consumers and small business to enter into a debt settlement program.
This legislation effectively bans debt relief companies from collecting upfront fees.
Therefore consumers will no longer have to pay these debt relief companies until they see real results.
Making debt settlement a performance based industry is long overdue.
For too long, debt settlement companies collected their fees upfront and the consumer had no real guarantee that their balances would actually settle.
While many consumers and small business did get successful settlement deals, far too many were ripped off by shady companies.
This is not possible anymore.
Only the legitimate companies will survive after this federal legislation was passed.
Only consumers with at least $10k in unsecured debt that are experiencing a legitimate financial hardship should consider entering into a settlement program.
This is seen as a legitimate alternative to filing bankruptcy and considering the new laws in place it makes much more financial sense to attempt a settlement deal instead of filing bankruptcy.
Bankruptcy will hurt your credit score for at least 7 years while most people can recover from settlement programs within 3 years.
These new federal debt relief laws give consumers a legitimate credit card debt relief option.
Shady debt companies will no longer be able to take advantage of desperate debtors.
If they don't perform a negotiate a successful settlement deal then they dont get paid.
Sounds like a much better deal to me.