Small Business Debt Help - How New FTC Debt Relief Laws Help Small Businesses

Feb. 15, 2011 - PRLog -- Small businesses can get into debts and they need help just like the individual consumers. The new FTC debt relief laws help the small businesses to get out of their liabilities in the same was as they help the consumers. The event of the development and growth of a fraud segment in the relief industry was a problem even for the small and start up businesses. The fraud companies in the market actually cheated these small business units in the name of debt relief. Collection of upfront fees from the businesses and then not helping them to get out of their liabilities was the mode of operation for these fraud firms.

As an outcome of this fraud, the Federal Trade Commission (FTC) introduced new restrictions on the relief industry and regulated the operations of the settlement firms. The firms are no longer allowed to collect advance fees from the start up business units and the settlement companies are required to wipe out at least 35% of the total outstanding of these business units by negotiating with the creditors. In case of failure, the settlement firms are not eligible to ask for their service fee. Moreover, as long as the negotiations continue, the settlement firms need to bear the expenses on their own. Only after a successful negotiation, they can actually ask for a compensation of those expenses from the business units.

These regulatory restrictions pushed the fraud firms out of the relief industry, leaving behind only the legitimate firms. The small businesses can now get some genuine help with regards to their debts and they can get rid of their unsecured loans as soon as possible. This is how the new FTC debt relief laws help small businesses.

Debt settlement can make financial sense for consumers and small businesses that are experiencing a financial hardship and have at least $10k in unsecured debt. It is not the only option however. Check out the following link to speak with a debt relief specialist that can go over all your options for free.
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