New Bankruptcy Laws Make Debt Settlement More Appealing

By admin • May 10th, 2010
Having a hard time with your mortgage payments?

The new bankruptcy laws have hindered many consumers from using a chapter 7 bankruptcy for debt relief solutions.  Discuss bankruptcy vs. debt settlement with an experienced bankruptcy attorney in your state. The debt reduction services have been around for nearly 10 years however it has never been so prevalent amongst our debt ridden society.  New bankruptcy laws have made bankruptcy much more difficult for consumers to qualify for and therefore many consumers have chosen debt settlement programs for debt relief.  

Debt settlement enables people to negotiate a reduced pay-off  from what they actually owe to their creditors. The consumer will pay into a monthly savings account until it builds to an agreeable amount that the creditor will likely accept. According to The Association of Settlement Companies (TASC) the average debt settlement is negotiated for 50% of the original debt balance.  A few members of Congress argue that most debt settlement companies charge excessive rates and large upfront fees for their services.

While it’s true that there are shady settlement companies out there that take advantage of desperate consumers it also true that there are legitimate debt settlement firms that do not charge upfront fees and will be able to live up to their promises.  Consumers need to know understand how to identify a legitimate debt settlement company and stay away from those predatory services. There are great resources online like that offers helpful info regarding debt settlement services for consumers.  Debt settlement is recommended for a consumer that has at least $10,000 in unsecured debt.  It is also recommended for people trying to avoid or that do not qualify for bankruptcy.  It is important to make sure that the debt settlement company is an accredited member of TASC, the regulatory body of the debt settlement industry and any company that is not a member should be avoided at all cost. Also make sure that the debt settlement company is fully backed by attorneys.  Twenty nine states have already required debt settlement negotiators to be lawyers and if a company has not yet implemented the attorney based model they should also be avoided. The debt settlement companies backed by attorneys will provide consumers the most protection against unlawful collection practices and potential lawsuits.  .

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