The new debt settlement laws work in favor of the consumer. They stop fraudulent scammers from taking a consumers money and not helping them. They also ensure that the banks and creditors will work with the debt settlement agencies to come up with a payment plan that the consumer can pay. Originally there were scam companies that would offer to help a consumer to legally reduce the debt they owed by 50% or more. They would tell the person that they would handle everything, top paying their bills and they will have a new repayment plan with the creditors. However, the catch was that the person had to pay huge fees up front to receive the help. The fees ranged in price, but the problem was the consumer already has no money, but can not receive help until they make the payment to the company. Once the payment was made, the company did nothing. They would take the consumers money and leave the person with an even bigger mess on their hands. This of course led to many bankruptcy filings and foreclosures too.
The new debt settlement laws have weeded out the scammers, because now these companies can not collect any money until they have worked out a repayment plan that the creditors agree to. They have to complete all their work first for the consumer before they can make any money. Scam companies that have no actual experience in debt settlement have gone out of business for this reason. The legitimate companies are able to actually help people reduce and remove their credit card debt. This is also how to stop paying credit card debt legally. A debt settlement company negotiates with the credit card companies and banks to remove the over limit fees, interest and late fees from the debt. Once the original amount is created, they then negotiate further to lower the debt by 50% or more or have the company completely eliminate the debt all together. The repayment plan created is one that the agency comes up with based on what the consumer makes, their other bills and expenses and how much money they actually have coming in. It is an amount they can actually pay.
That is also what the other part of the new debt settlement laws do, it makes the banks and creditors open to creating debt settlement plans. The new laws force the creditors to work with debt settlement companies and accept the terms of the repayment agreement. That was the other problem for consumers. Prior to the laws a consumer could work with a legitimate debt settlement agency and the banks and creditors were not receptive to the repayment terms. They would not work with the agency and try to deny debt settlement agreements. However, in the long run this hurt them, because people were then forced to claim bankruptcy instead. The new laws stop this from happening and ensure that banks will enter into the agreements to get consumers out of debt, instead of trying to keep them there.
With the new FTC laws recently passed, debt settlement is a legitimate alternative to filing bankruptcy. Creditors are ready to negotiate and now you won't have to pay a fee unless your debts actually settle. Check out the following link to locate legitimate debt relief companies in your state for free help.
About the Author:www.creditcardsettlementadvice.com is a matchmaker in the debt settlement industry. They have paired up thousands of consumers up with debt settlement companies who are most likely to get consumers the best deal.
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