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Follow on Google News | Debt Settlement Pros And Cons - How The New FTC Laws Help Debt Settlement ProgramsThere are several pros of debt settlement as a relief method and only a few cons to be mentioned. These are mentioned in the following segment of the article.
By: debtsquashers.com The positive aspects of settlement: * The credit score of the consumers is restored and left unharmed at the end of the process. * There are no or barely nil legal hassles. * It is the fastest method of relief and typically takes 1-3 years to complete. * It is the cheapest method of relief and costs around 6-15% of the overall outstanding. This is the money to be paid to the settlement firm hired. * At least 50% and a maximum of 70% of the dues can be eliminated using this method. * The consumers do not lose credibility and they can get fresh loans immediately after settlement is complete. Negative aspects of settlement: * There is a constant fear of the creditor taking legal steps and hence, attorney based programs are the safest but that can cost a little more. * There can be tax implications and the amount saved above $600 will be taxable if the consumers was not insolvent during settlement. It is therefore, necessary to speak to a tax consultant before entering a settlement program. * There are fraud settlement firms which can cheat the consumers by taking advance fees and never helping the consumers. Association between cons and new FTC laws: The last negative aspect is pretty intimidating for the consumers. It is because of this negative aspect that the FTC banned upfront fee collection by the settlement firms from the consumers. Additional regulations were imposed which are: * Minimum 35% elimination to be earned for the consumers by the settlement firms. * Costs of negotiation to be borne by the settlement firms till consumers are debt free. * The firms need to ensure that the settlement deals are satisfactory for the consumers and as per the promises made. Because of these regulations the fraud firms left the industry and only the legitimate firms were left behind. Thus the consumers earned access to the best relief firms in the industry and the consumers entered the safe zone knowing that they will get genuine help from the relief firms. Thus, the last negative aspect as mentioned above is discarded leaving behind only two major cons of the method of debt settlement. 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. Free Debt Advice (http://www.debtsquashers.com) Contact us for free debt advice = 8883613619 End
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