The Credit Card Debt Law Is Working For You
Thinking about either joining a credit card debt relief program or filing for bankruptcy? Are the legal implications of your actions causing you some degree of concern? After all, possessing a debt problem is bad enough without having to think about lawsuits over missed repayments. Thankfully, recent changes in debt law legislation provide some measure of protection for all participants of debt settlement programs.
Court cases over our unpaid debts and the possibility of enforced payments, even repossession of possessions, are on the cards for you if you manage the debt reduction process badly. While bankruptcy has its own inbuilt protection, because it is handled by the courts, until recently credit debt settlement has been a legal quagmire.
Recent Changes to the Credit Card Debt Law
In 2010 the Federal Trade Commission (FTC) made substantial changes to the credit card debt law, which counters the unethical practices of some debt settlement companies. Due to the turn down in the global economy in recent years, a record number of debtors have applied for debt settlement. While many debt relief companies have handled these cases in an ethical manner, some companies had been charging excessive upfront fees and monthly servicing fees while providing the debtor with either very poor settlements or no settlement at all.
Those unfortunate debtors now found themselves worse off than when they started the settlement plan, because their debts had increased due to the interest which had been gathering on their unpaid credit cards. This, combined with the fees paid to these debt relief companies, resulted in a great many complaints made to the FTC. The FTC listened to these complaints and made the substantial changes to the law, which results in a remarkable level of financial security and legal protection for all participants of settlement plans in the USA.
In brief summary it basically states the following:
€ The debtor pays into a special account which is owned and managed by the debtor. The debtor can withdraw the balance at any stage. Consequently, the debt settlement company has no control of the debtor's finances.
€ The debt relief company has to deliver significant reduction (or at least changes in the level of debt in at least one of their client's credit cards prior to charging the client for their services).
€ The debt relief company can only charge their client a fee after the debtor makes at least one payment to the credit card company, which the debt relief company has settled the debt with on behalf of the debtor.
€ The debt settlement company can only charge a fee which is proportionate to the amount of debt savings which they have settled on behalf of the debtor.
Debt problems are bad enough without having to face court cases, and yet for many credit card debtors this is what they have to face up to on a daily basis. If you find yourself in this position, what can you do next? If your debts are getting badly out of control, you may well be considering the debt settlement route and comparing it against bankruptcy.
Although debt settlement cannot be presumed to be a better option than bankruptcy, at least now if you are thinking of taking up debt settlement there is some degree of legal reassurance. These recent changes to the debt law mean that if you sign up for a credit debt settlement program, your money will be protected during the entire process and that the debt settlement company can only receive their fee once you have received substantial savings on your outstanding debts.
While nobody wants to be embroiled in a credit card debt settlement process, at least now you know that you are protected thanks to the recent changes in debt law.
Court cases over our unpaid debts and the possibility of enforced payments, even repossession of possessions, are on the cards for you if you manage the debt reduction process badly. While bankruptcy has its own inbuilt protection, because it is handled by the courts, until recently credit debt settlement has been a legal quagmire.
Recent Changes to the Credit Card Debt Law
In 2010 the Federal Trade Commission (FTC) made substantial changes to the credit card debt law, which counters the unethical practices of some debt settlement companies. Due to the turn down in the global economy in recent years, a record number of debtors have applied for debt settlement. While many debt relief companies have handled these cases in an ethical manner, some companies had been charging excessive upfront fees and monthly servicing fees while providing the debtor with either very poor settlements or no settlement at all.
Those unfortunate debtors now found themselves worse off than when they started the settlement plan, because their debts had increased due to the interest which had been gathering on their unpaid credit cards. This, combined with the fees paid to these debt relief companies, resulted in a great many complaints made to the FTC. The FTC listened to these complaints and made the substantial changes to the law, which results in a remarkable level of financial security and legal protection for all participants of settlement plans in the USA.
In brief summary it basically states the following:
€ The debtor pays into a special account which is owned and managed by the debtor. The debtor can withdraw the balance at any stage. Consequently, the debt settlement company has no control of the debtor's finances.
€ The debt relief company has to deliver significant reduction (or at least changes in the level of debt in at least one of their client's credit cards prior to charging the client for their services).
€ The debt relief company can only charge their client a fee after the debtor makes at least one payment to the credit card company, which the debt relief company has settled the debt with on behalf of the debtor.
€ The debt settlement company can only charge a fee which is proportionate to the amount of debt savings which they have settled on behalf of the debtor.
Debt problems are bad enough without having to face court cases, and yet for many credit card debtors this is what they have to face up to on a daily basis. If you find yourself in this position, what can you do next? If your debts are getting badly out of control, you may well be considering the debt settlement route and comparing it against bankruptcy.
Although debt settlement cannot be presumed to be a better option than bankruptcy, at least now if you are thinking of taking up debt settlement there is some degree of legal reassurance. These recent changes to the debt law mean that if you sign up for a credit debt settlement program, your money will be protected during the entire process and that the debt settlement company can only receive their fee once you have received substantial savings on your outstanding debts.
While nobody wants to be embroiled in a credit card debt settlement process, at least now you know that you are protected thanks to the recent changes in debt law.
