Credit Card Settlement Law
Credit card settlement is an effective solution for consumers who want to pay off mounting credit card debt. The 2007 Debt Relief Act was created to help people on the verge of bankruptcy. It helped some but not all Americans struggling with debt. In 2010, President Obama established a plan for Americans with more than $10,000 in credit card debt. Obama's Debt Relief Act outlines the rights of credit card companies and consumers regarding the settlement of debt.
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How It Works
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The debt relief act allows creditors to forgive certain amounts of consumer debt if they are willing. The creditor has the discretion to decide whether to offer settlement services. The debt relief act allows a creditor to negotiate the settlement directly with the consumer or through a third-party settlement agency.
How It Helps Creditors
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The act helps creditors by reducing a customer's amount of credit card debt. If the customer is struggling to pay his monthly bill, adding interest and fees would make it more difficult for him to make the minimum payment. The creditor is more likely to get its money by coming up with a reasonable offer.
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How It Helps Consumers
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The debt relief act gives consumers an opportunity to negotiate debt with their creditors to eliminate costly interest rates and high monthly payments. As of 2010, debt settlement companies could charge only a one-time account setup fee. They no could longer charge in advance for services.
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