Credit Card Debt Relief Act 2010 – Why Credit Card Companies Are Making More Debt Settlement Deals

On July 28th 2010, the Federal Trade Commission passed the credit card debt relief act which puts significant regulation on the debt settlement industry.
By: freedebtsettlementadvice.com
 
Oct. 18, 2010 - PRLog -- On July 28th 2010, the Federal Trade Commission passed the credit card debt relief act which puts significant regulation on the debt settlement industry. For the last 5 years consumers and small businesses that entered into a debt settlement program had to pay large upfront fees but had no guarantee that their balances would actually settle. This is not possible anymore. These new laws ban debt settlement companies from collecting upfront fees and make the process a much more legitimate option.
So why would credit card companies and other creditors of unsecured debt make these settlement deals? The simple answer is that they don’t want you to file bankruptcy. They know that if you file bankruptcy they will likely receive little to none of their money back. Credit card companies are typically the last in line to receive their funds when a consumer or small business files bankruptcy. By making a settlement deal they can at least collect some of their money back.
With delinquency rates rising at unprecedented levels creditors are having no choice but to make debt settlement deals. After one of the worst recessions in American history there are more consumers on the verge of bankruptcy than ever before. Credit card companies are realistically worried about incurring significant losses this year and are willing to make deals to recoup some of their money back. You as the consumer can take advantage of this situation and try to settle your balance for less.
If you have over $10,000 in unsecured debt and are experiencing a legitimate financial hardship then debt settlement can be a good option especially with these new laws in place. In 2009, the average settlement case was negotiated for 50% of the balance. This is just the average and results vary case by case but most consumers should be able to eliminate close to half of their unsecured debt balances. is much less advantageous and many consumers have resorted to other debt relief options.

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Source:freedebtsettlementadvice.com
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Tags:Debt, Debt Solutions, Debt Relief, Debt Settlement, Get Out Of Debt, Debt Settlement Programs
Industry:Debt relief
Location:United States
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