Debt Settlement laws - All about the debt settlement laws

The debt settlement industry is still rather young, and therefore when it comes to the laws that govern this trade, consumers might be shocked to find that there really aren’t that many. This is because the need for credit card debt settlement services has drastically increased over last couple of years, which is no surprise considering the current less-than-favorable status of our economy. The rapid growth of the industry, spurred by economic down-turn and America’s daunting reliance on credit, has merely surpassed the ability of the legislators to write, pass and enforce the laws to regulate debt settlement companies.

What laws there are actually in place vary greatly from state to state. The lack of state or federal parameters in this industry certainly presents a challenge to the debtor seeking an effective and legitimate means of debt resolution. Before trusting any company to help you with your financial situation, it is a good idea to check that the company is a member of the International Association of Professional Debt Arbitrators, or the IAPDA. The IAPDA is a certification association for debt settlement companies. In order to acquire this certification, companies must adhere to the IAPDA’s code of ethics. After complying with these policies and completing training, qualifying companies are bestowed a Certified Debt Specialist (CDS) title. Be sure to ask any debt settlement company if they have this certification before conducting business with them.

The fact that a company has membership with the IAPDA is a good figure of that company’s character because the organization’s code of ethics and training, of which all its members must comply with, is based on the Uniform Debt Management Services Act, or UDMSA. The UDMSA was issued by the National Conference of Commissioners on Uniform State Laws. This act, which was created in 2005, has been adopted by several states. The need for federal regulation of debt management and credit counseling has become even more significant since the new federal bankruptcy laws were enacted in October of 2005.

Debt Settlement laws - All about the debt settlement laws

The conventions proposed by the UDMSA, and abided by IAPDA members, cover the three categories of registration, agreements, and enforcement. Companies are required to be registered with the state, must disclose all information and fees to the client, and are forbidden to engage in such unethical practices as accepting bribes or acting on behalf of a debtor without consent. Starting in 2007, six states have adopted this act and made it a law including Colorado, Delaware, Rhode Island, Utah, Nevada, and Tennessee. Choosing a company that has a CDS certification will ensure that the company meets the criteria outlined by the UDMSA, whether or not you are a resident of a state that has elected to make that act a law.

Because the debt settlement industry is largely unregulated at a state, let alone a federal level, debtors may be leery of companies that offer counseling and debt management services. By verifying that the company is a member of the IAPDA, and that they adhere to the guidelines described in the UDMSA, you will be able to find a legitimate company that offers a great solution to your debt relief. Other ways to ascertain the legitimacy of a company is to check whether the company is a member of the Better Business Bureau and the Chamber of Commerce. Please take the time to fill out our no obligation debt settlement form to see how we can help you get out of debt in 12 to 36 months!

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