SOURCE: Total Debt Relief

October 07, 2010 13:30 ET

Total Debt Relief Explains How Credit Card Debt Relief Still Possible After New Laws Go Into Effect

LOS ANGELES CA--(Marketwire - October 7, 2010) -  New debt relief laws are set to take effect at the end of October 2010. These new debt relief laws are intended to prevent consumers in debt from being taken advantage of by fraudulent debt settlement companies. Over the past few years there has been an increase in debt relief scams. Debt settlement companies claim they can eliminate up to 50% of a consumer's debt through a program called debt settlement, but don't follow through. Instead consumers are left with more debt and out more money due to the start up fees they paid to the settlement company.

The debt settlement industry has been around for quite some time, but has recently come under scrutiny by attorney generals and the Federal Trade Commission. Essentially, debt settlement is the process of negotiating debts with various creditors on a consumer's behalf. If the creditors agree to the negotiations, in some cases a consumer's debt can be reduced by up to 50% in a 24 to 36 month period. The debt settlement company receives a percentage of the debt settled as a fee for their services.

The new laws will stop debt relief companies from charging upfront fees before actually providing their services. Now settlement companies will only be able to receive fees once the negotiation process has begun and payments are being made to creditors.

There are other attributes in the law such as false advertising and various other regulations. While the debt settlement industry will change, credit card debt relief will still be available to consumers without having to declare bankruptcy. Settlement companies in compliance with the new laws will still be able to negotiate debts on a consumer's behalf, but will only generate revenue if they actually settle the debts owed.

For those interested in debt relief services or want more information, Total Debt Relief offers a free debt consultation at their company website:

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  • Total Debt Relief