Consumer Debt Relief – How New Laws Save Consumers Money on Debt Relief
Federal Trade Commission (FTC) came up with new laws and regulations to control the settlement industry as the situation of the debtor who was not in a position to repay the debt was becoming worse with the multiplication of fake settlement companies that charged hefty upfront fees by making false promises to the customers.
These new laws are not only aimed at saving consumers money on debt relief and weed out the fake debt settlement companies but also to safeguard the interest of the creditors. Debt relief as the name indicates, refers to waiving off the debt slightly or fully or to stop further growth of debt in the form of interest. If you are looking for an answer to how the new laws laid by FTC save consumers money on debt, this article comes handy. The following points throw light on how consumer’s money is saved with the arrival of new laws on debt relief:
Earlier, the consumers had to discarded out huge sums of money from their pockets towards upfront fees of debt settlement companies if they opted for a settlement. Now, in order to make the sets of these companies affordable, FTC has banned the collection of upfront fees by debt settlement companies. This will make these companies more accountable for their job and also remove the bad reputation attached to the debt settlement industry by removing the fake companies which only collected consumer’s money and vanished.
The debtor can negotiate with the creditor for save a large extent of his/her debt by opting for debt settlement.
The new laws laid down by FTC also provide tax breaks. The amount of debt foregone by the creditor is almost recovered back in the form of tax breaks. consequently it is always in the interest of the creditor to forego a major portion of the debt. Also, for the debtor it is better to opt for a settlement over bankruptcy.
The new laws aimed at regulating the settlement industry are advantageous for both the creditors and the debtors.