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Is Debt Settlement Legal?
Is debt settlement legal? The simple answer to this question is yes, debt settlement is a legal and effective way to eliminate your debt. During a debt settlement program, one of our debt settlement experts will contact your creditors and negotiate a lower balance with them. The lower balance is usually 50% or less than the amount that you actually owe, and will be paid as a lump sum. Creditors are willing to cooperate with debtors because they don’t want to incur the expense of taking legal action or risk losing all their money in the event that you file for bankruptcy.
There are a number of reasons why there is a lot of confusion concerning the legality of the debt settlement process. The lack of government regulation in the industry is one of the main contributing factors to the confusion. Licensing is not required by every state, and although the Uniform Debt Management Services Act (UDMSA) has been drafted, only six states have adopted it. The UDMSA proposes that companies offering debt management services must comply in the three categories of registration, written agreements and enforcement. However, unless you are a resident of Colorado, Delaware, Rhode Island, Utah, Nevada or Tennessee, you are not protected by these laws. The opportunity for illegitimate companies to scam consumers is a viable threat, and these shady organizations have tainted the industry and caused many consumers to question the legality of debt settlement in general.
Another aspect of a debt settlement program that prompts questions of legality is the fact that debtors must stop paying their creditors in order to participate. This is because credit card debt settlement will not be successful if debtors continue to pay minimum payments to their creditors. The important thing to remember here is that candidates for debt settlement are unable to make these payments. Anyone who can afford to make payments is not a candidate for debt settlement and should seek other forms of resolution. If you think that you are a candidate for debt settlement, please take a moment to fill out our no obligation debt settlement form. One of our representatives will contact you to explain the debt settlement process or discuss other options that you may have.
Find a Reputable Debt Settlement Company
Debt settlement is not against the law, but there are few laws that regulate the industry. This is why it is important to research a company before trusting them with your financial information. A reputable debt settlement company will belong to debt management associations and organizations such as the Chamber of Commerce and the Better Business Bureau. Look for a membership to the International Association of Professional Debt Arbitrators. The IAPDA has its own code of ethics that members must comply to, and companies that meet the standards of the organization are granted Certified Debt Specialist status. The IAPDA’s code of ethics adheres to the UDMSA, ensuring debtors that members are legitimate and trustworthy debt settlement companies.
Debt settlement is 100% legal, but it takes a savvy consumer to avoid illegitimate companies running illegal scams. Perhaps debt settlement seems illegal because it offers debtors a fast way to credit debt relief. Although it may sound too good to be true, debt settlement is a legal form of debt resolution. Please take a moment to Fill out our free, no obligation debt settlement form, so we can show you how to become debt free in 12 to 36 months.
Offering Professional Debt Settlement Help to 50 US States
List of States where we offer debt settlement
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