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How Recent Changes in the Law Can Help You to Settle Your Debts

By Dermot Farrell Copyright © 2012

http://www.creditcarddebtsecrets.org The Secret Behind Credit Card Debt – Copyright 2012 – http://www.CreditCardDebtSecrets.org


Credit card debt settlement has never been safer, thanks to recent changes to the law. In September 2010, the Federal Trade Commission (FTC), made some fairly extreme changes to the credit card debt relief law in an effort to counteract some abuses which had been taking place between credit card debt relief companies and their clients. Thanks to these changes there has never been a better time in which to sign up to a credit card debt settlement scheme. Because of the global turndown in 2008, a record number of Americans signed up for credit card debt settlement programs. However some of the credit card debt relief companies where less than ethical in their dealing with their clients; in some cases they charged considerable upfront fees, as well as servicing fees, and yet more often than not they did not deliver good results. The FTC countered these abuses by rolling out the following changes to the credit card debt relief law: 

The debt relief companies cannot charge upfront fees for any customers who sign up to a credit card debt settlement plan.

The debt relief company can only charge the customer a fee after they have brought about a reduction in at least one of their clients outstanding credit cards.

The debt relief company can only charge the customer upon the customer making at least one payment on the card, which has undergone the debt reduction.

The debt relief company has to charge fees which are appropriate to the amount of money which they save their customer during the debt settlement process.

The debt relief company has no control over the debt settlement bank account which the customer pays into. With debt settlement, the debtor pays into a special bank account which will be used to pay their creditors at the appropriate time. With the new changes in the credit card debt relief legislation, the customer can withdraw money from this account at any time; indeed they have full control over this special account.

How Changes in Credit Card Debt Relief Affects You The implications of these changes, in the credit card debt relief law, mean that it’s up to the debt settlement company to produce results.

The Secret Behind Credit Card Debt – Copyright 2012 – http://www.CreditCardDebtSecrets.org


Only after they have saved their customers some money can they charge them any fees, and these fees have to be in proportion to the amount of money which they have managed to save their client. What this means in practice is that if you are considering signing up for a debt settlement program, that at least you will not have to worry about the credit card debt settlement company ripping you off. Rather, they are the ones who have to take a chance on you. The reason why so many debtors were losing money on credit card debt settlement programs at this time was due to an abusive attitude of some credit card debt relief companies. Since the customer paid an upfront fee the credit card debt settlement company did not have to vet their clients properly in the first place, because regardless of the outcome they would make some money out of the process. With these recent changes to credit card debt law it means that some debtors, who would normally have signed up for such a program, will now be turned down because the credit card debt relief companies are only interested in dealing with debtors who have debt problems which are definitely open to settlement. While this may initially disappoint some debtors, at least it means that if the credit card debt relief organization signs you up, that they are fairly confident that they can get a good settlement for you. Consequently, if you have been holding yourself back from signing up to a credit card debt settlement program, over concerns regarding the possibility of been ripped off, then think again. These recent changes in credit card debt relief law are working on your side and, while credit card settlement is not for everyone and certainly requires some due consideration on account of the potential downsides of the debt settlement program itself, at least you now no longer have to concern yourself over potential abuse of the fees charged for this service by the credit card debt settlement providers.

The Secret Behind Credit Card Debt – Copyright 2012 – http://www.CreditCardDebtSecrets.org


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