Are There Really Fast Debt Solutions?
Editor’s note: This is a guest post from our friends at http://fixndebt.net. For more information on credit, debt, and other money matters, check their site out today!
Are There Really Fast Debt Solutions?
People in a lot of debt are always on the lookout for whatever fast debt solutions they can find. In reality, winning the lottery might be the only solution to debt that could be considered fast, and the odds of this happening are almost zero. When money matters are totally out of hand, people tend to turn debt settlement companies for help. On the outside, these companies seem like the ideal solution to the problem of managing debt, but unfortunately they actually hurt more people than they help.
Debt Settlement Scams
Companies offering help with debt management often promise to do things that aren’t possible, such as repair bad credit reports, settle with creditors to get lower balances, and reduce interest rates. What these companies fail to mention is how most lenders look at participation in such programs as equivalent to filing for bankruptcy, probably because most people would run the other way if they knew this. In return for all these false promises, consumers are asked to pay rather large upfront payments to get the process started as well as monthly maintenance fees for account management. These fees are taken before any of the promises are delivered on, and once debt companies have the money in hand, they fail to do much more to benefit consumers. Fortunately, there are now many debt settlement regulations in place to put a stop to such practices.
The Debt Settlement Consumer Protection Act
In 2010, the Debt Settlement Consumer Protection Act became law. Debt settlement agencies can no longer accept upfront fees from consumers as payment for improving their financial situations when they have yet to deliver any real results. These new regulations also require debt companies to fully disclose to potential customers exactly how their money will be used to pay on their accounts as well as explain that their participation in the program might ultimately damage their credit ratings.
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