Although filing for bankruptcy can provide considerable relief to those who are facing insurmountable debt, bankruptcy is not always the correct choice for everyone. While some may not qualify for bankruptcy, others may wish to use an alternative to solve their debt problems. This is where debt relief programs step in, claiming to help consumers negotiate with their creditors and provide a solution to settle the debt.
However, is it safe to use a national debt relief organization to resolve your debts? While some report positive experiences with these companies, others have negative experiences that result in them spending more money in the long run. Also, many consumers have been taken advantage of by debt relief companies that ended up collecting fees without actually providing any debt relief services.
Still, new rules enacted by the Federal Trade Commission (FTC) will provide more protection to consumers using debt relief organizations to settle their debts. The organizations are no longer able to charge any upfront fees. While this is a major step forward, it is important to remember there is still no cap on how much the organizations can charge for their services. Therefore, while using debt relief services have become much safer, there is still risk involved.
The FTC encourages consumers to research any debt relief companies they are thinking about hiring. Some consumers choose to deal directly with their creditors in order to settle their debts. Consulting legal counsel will allow you to understand all of the options available to you considering your unique financial situation. While suing debt relief services are not always in consumers’ best interests, some may seek some relief through this method.
Source: Red, White & Blue Press “Debt Relief Programs For Consumers-Are National Debt Assistance Plans Helpful In Erasing Unsecured Debt?” Steven Craig, 9 November 2010