SOURCE: Total Debt Relief

September 09, 2010 10:00 ET

New Credit Card Debt Program Laws Have Changed, Consumers Now Safer

The FTC Has Changed Rules and Regulations on How Credit Card Debt Relief Companies Can Do Business; Total Debt Relief Explains

LOS ANGELES, CA--(Marketwire - September 9, 2010) - It seems lately debt relief ads have been popping up left and right. It's hard to go on the internet, TV, or radio and not see some ad claiming a company can eliminate a consumer's debt. Due to a weak economy the past few years a lot of people have felt the burden of debt growing and became desperate for help. Many entrepreneurs saw an opportunity and opened up shop in the debt relief industry.

Unfortunately many of these companies took advantage of consumers. Companies claiming they could eliminate over half of a consumer's debts charged ridiculous upfront fees and never resolved any of the client's debts. This left consumers still in debt with less than they had before along with even angrier creditors who hadn't been paid in months. As complaints grew the FTC stepped in and began forming new rules for the industry.

Starting at the end of October debt relief companies practicing debt settlement will only be able to charge fees if they produce results. These rules are directed towards the debt settlement industry. A debt settlement company negotiates with creditors on behalf of the consumer. Creditors and settlement agents form a compromise regarding the payment plans and how much will be paid monthly. Legitimate debt settlement companies are able to eliminate debts by up to 50% of the original amount owed. By the end of the program a consumer should be out of debt in a 24- to 36-month period.

After the regulations are in place debt settlement companies will still be able to operate but they will no longer be able to charge upfront fees. Consumers with relatively high amounts of credit card debt might consider debt settlement as a viable debt relief alternative. A majority of the debt settlement companies offer free consultations to determine if they are a good fit for the program.

Total Debt Relief offers a free debt evaluation at their company website:

Contact Information

  • Contact:
    Rob Jones