Owing to the recent economic turmoil and recession, many people have lost their jobs or are forced to settle for lower salaries leading them to take help of credit cards to buy goods and services. However since they have little or no source of income, paying back the monthly installments due on these credit card bills can be a headache.
So in order to provide consumers with a legitimate way in reducing their debts, many debt settlement firms are offering their services. These settlement services are made popular amongst the consumers by the government’s new debt relief laws. The FTC’s and the government’s new regulations will enable the consumers to clearly differentiate between a legitimate and an illegal settlement firm. By putting a ban on upfront fee being charged from the consumers, those firms which were previously in the market to earn money rather than provide legal and beneficial services to the people, will now be thrown out of business. More and more consumers will readily opt for debt relief options since they will be liable to pay only after the financial settlement firms are successful in reducing their debts to the maximum.
A consumer is eligible for the government’s debt relief program if his debts amount to dollars ten thousand or more. He can take assistance of a professional of debt settlement firm who can help him out in a legal manner to settle his debts with his creditors. The debt settlement firms usually have professional negotiators to help consumers get the maximum percentage of reduction in the amount of their liabilities.This percentage may vary between 50 to 70 % percent, depending on the firm’s negotiating skills.
Usually creditors are in favor of accepting loan settlement deals offered by these settlement firms. This is because, when a consumer opts for debt settlement as opposed to bankruptcy, the creditor gets at least some of the outstanding amount back from the consumer rather than having to close the account and get paid nothing at all. Also debt settlement is beneficial for the consumers rather than filing bankruptcy, since a debt settlement does not create a negative credit history as the settled accounts are considered as paid in full, making it easier for the consumers to take more loans in the future.
If you have over $10,000 in unsecured debt it may be a wise financial decision to consider a debt settlement. Due to the recession and overwhelming amount of people in debt, creditors are having no choice but to agree to debt settlement deals. To find legitimate debt reduction help in your state and get free debt advice then check out the following link.