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Thinking about either joining a credit card debt settlement program or declaring bankruptcy? Are the legal implications of your actions causing you some degree of interest? After all, aquiring a debt issue is bad enough without having to consider lawsuits over missed credit card repayments. Thankfully, recent alterations in credit debt law legislation provide a degree of of protection for those participants of credit card debt relief programs.
Court cases over our unpaid debts and the chance of enforced payments, even repossession of possessions, are on them for you just try the debt reduction process badly. While bankruptcy has its own inbuilt protection, because it is handled through the courts, up to now credit debt settlement is a legal quagmire.
Recent Changes to the Credit debt Law
In 2010 the government Trade Commission (FTC) made substantial changes to the law, which counters the unethical practices of some debt settlement companies. Because of the reject within the global economy in recent years, a record number of debtors have requested credit card debt relief. Even though many debt settlement companies have handled these cases in an ethical manner, some companies have been charging excessive upfront fees and monthly servicing fees while supplying the charge card debtor with either very poor debt settlements or no debt settlement whatsoever.
Those unfortunate debtors now found themselves worse off than once they started the plan, as their debts had increased because of the interest which had been gathering on their own unpaid cards. This, combined with fees paid to these debt settlement companies, resulted in a great many complaints designed to the FTC. The FTC listened to these complaints and made the substantial changes towards the law, which leads to an amazing degree of financial security and legal protection for all participants of debt settlement plans in the USA.
In brief summary it basically states the following:
� The debtor pays right into a special account which is owned and managed through the debtor. The debtor can withdraw the balance at any stage. Consequently, your debt settlement company has no control of the debtor's finances.
� The debt relief company has to deliver significant reduction (or at best alterations in the level of debt in at least one of the client's credit cards prior to charging the client for their services).
� The debt relief company can only charge their client a charge following the debtor makes a minumum of one payment towards the credit card company, that the debt relief company has settled the debt with with respect to the debtor.
� The company are only able to charge a fee which is proportionate to the amount of debt savings that they have settled on behalf of the debtor.
Debt troubles are bad enough without needing to face court cases, but for a lot of charge card debtors this is what they have to face up to every day. If you find yourself in this position, what else could you do next? In case your debts are getting badly out of control, you could be taking into consideration the debt settlement route and comparing it against bankruptcy.
Although debt consolidation cannot be presumed to become a more sensible choice than bankruptcy, at least now if you're thinking of using this up there is a few amount of legal reassurance. These recent changes to the credit debt law imply that if you sign up for a course, your hard earned money is going to be protected during the entire process and that the company can only receive their fee after you have received substantial savings in your outstanding debts.
While who wants to be embroiled inside a debt relief process, a minimum of now you know that you're protected because of the recent alterations in credit card debt law.
