Debt Settlement More Viable Than Ever

The debt settlement industry has earned a negative reputation for it's questionable practices over the past decade. As a result, many people began to look elsewhere for debt relief solutions. Fortunately, the Federal Trade Commission's introduction of new regulations has completely reformed the industry, again making debt settlement a viable option for consumers.

When the economy entered the recession, many people found themselves overwhelmed with debt. This created a huge demand for debt relief, and the debt settlement industry exploded overnight to satisfy that demand. The problem, however, was that practically zero federal oversight governed the industry. As a result, the companies entering the marketplace didn't possess the experience, qualifications, or resources to effectively administer a debt negotiation program. In some cases, these companies were completely fraudulent, with the sole intention of taking peoples' money. In either event, many consumers entered these programs, only to find themselves more in debt and with less money.

This year, the Federal Trade Commission had finally had enough. The federal agency put into force a set of new rules. After only a month of being in effect, the entire debt settlement industry has been reformed. The key rule now requires that debt settlement companies do not collect upfront fees. This means that they cannot charge a client anything until their debt has actually been settled.

The impact of this particular reform was immense. Because it takes as long as three years to reach a settlement during the negotiation process, a company cannot make any money off a client for that entire period of time. Very few companies out there have the resources to go survive three years without payment. This practically wiped out the entire industry, leaving only the strong, reputable, debt settlement companies remaining.

If you're dealing looking for a method of debt relief, you no longer need to overlook debt settlement for fear of fraud. While no industry is perfect, unethical practices may still take place. Just be sure to prudently research any company you are thinking about hiring. After all, your financial future is at stake.

About the Author:
For more information on debt settlement, contact DRA or educate yourself at Debt Settlement U.

Article Originally Published On: http://www.articlesnatch.com

Tags: debt settlement

, fraud

, debt relief

, FTC

, regulation

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