During the recession period, most of the consumers became the prey of many fraudulent debt settlement companies.
To understand this fact or in other words to overcome this chaos created by the fraudulent debt settlement companies, the federal government came up with new debt settlement laws under the act in 2010.
Understanding these laws is quite an easy task.
These laws state that the charging of huge amount of upfront fees from the consumers should be prohibited.
These new laws also defined a limit of the money that would be charged by the debt settlement companies which would be in consumer's favor as he will not end up paying too much to any debt settlement company.
This is how the debt relief consumer protection act of the new debt relief laws is helping the consumers.
The FTC is keeping up the concept of debt settlement options.
According to the new laws proposed by the state authorities, no upfront fee would be charged from the consumers and less interest rate would be offered regarding this procedure.
When it comes to negotiation, consumer should hire the faculties of a reputable settlement company which will help him to clear his debts.
The consumer should convince the judge that he is unable to repay his debt amounts.
By this the, consumer will get all of his debts clear without paying any amount and would have a secured financial future..
These are few of the reasons due to which the debt reduction programs are getting much more famous as compared to the process of bankruptcy.
People are now taking bankruptcy as the last option.
The Payment of reduced amount is much preferable rather than to file for bankruptcy and remain deprive of any financial assistance for many years.
By this step of the government, the debtors have started availing this program and they are clearing off all their debts at affordable rates.
This method is proving consumer friendly as it is readily helping the consumers to wipe off their debt amounts.