Can it benefit debtors if the government eliminate debt reduction?
The End of the Credit Card Debt Negotiation Business: The regulators are to vote on revamped laws.
An whole sector shouldn’t be penalized for the scumbag tactics used by merely a hand full of firms. The FTC has in recent months composed new regulations regarding the debt settlement industry that will be shown to be crucial in the downfall of the sector if enacted. A vote will occur in fall of 2009 with the intentions of enacting laws that will advantage US citizens seeking debt relief. But can it truly come to benefit of debtors to virtually kill the method of hiring a company to negotiate bills on their behalf?
The most important trade organizations helping debt negotiation/settlement services have put money into research studies to determine the helpfulness and overall results of the debt settlement branch. Both TASC (The Association of settlement companies) and USOBA (United States Organization for Bankruptcy Alternatives) have hopes to bring light to the good benefits of debt settlement to the government and to avoid the legality of such groundbreaking regulations.
Debt settlement companies do work on consumers’ behalf to negotiate down unsecured debt, such as credit card debt, unsecured loans, lines of credit and hospital bills. They help a class of US residents with unmanageable hardships, like medical illnesses, job loss, divorce, or the loss of a loved one.
Most of the regulations that the Federal Trade Commission is seeking to implement—including a ban of upfront fees— would virtually crush this viable program for debtors who are feeling hardships with unsecured debt. TASC layed out in a quick historical performance numbers the economic value its member agencies offer to customers enrolled in debt settlement programs, and it is neatly illustrated. For example, based on a recent data analysis of its members, TASC shows its members negotiated over ninety thousand accounts totaling more than $553 million in debt in the first half of this year. This is an annual projected amount of more than $1.1 billion in consumer debt settled by TASC members for just this year. A multitude of other studies also clearly indicate the benefit of the debt settlement sector as a whole, showing the beneficial impact made on the economy in general.
USOBA has endorsed research projects of the debt settlement sector by Dr. Richard A. Briesch, an Assistant Professor of Marketing at Southern Methodist University’s ground breaking Cox School of Business, releasing the paper with the name “Economic Factors and the Debt Management Industry” earlier this month. He looked over an independent objective assessment of the consumer benefit, if any, offered by debt settlement companies. In reviewing detailed areas of concern in the debt settlement sector, such as consumer graduation rate of debt settlement programs, service fees, the quality of settlement officers, and overall consumer benefit, Dr. Briesch came to the conclusion that debt settlement can extend immense value and benefit to US consumers even beyond what debt consolidation can provide.
Dave Leuthold, Executive Director of TASC said “Debt settlement has been and should remain an option for the tens of thousands of consumers who are facing financial difficulties. Especially in this tough economic climate, consumers should have more financial tools at their disposal, not fewer.”
Commissioner J. Thomas Rosch of the Federal Trade Commission also agrees that the Debt Settlement industry has a crucial role to play as he said “For example, a debt settlement company can speak on the debtor’s behalf, especially in predicaments where consumers are reluctant , humiliated, or even afraid to call their creditors directly. A debt settlement company also may be able to provide personalized care to clients, taking a holistic approach to all of the consumer’s credit card debt owed to several creditors, as opposed to just the amount owed to an individual creditor. Running the whole debt picture and focusing on repairing the debtor’s economic health has most of the time been a critical value proposition of debt settlement negotiators.” Rosch moves further to mention numerous recommendations to the industry that can assist in lowering the complaints by debtors, since it’s the complaints that stimulate the Federal Trade Commission and other government bodies such as Attorney Generals’ offices, State Bar Associations, and the Better Business Bureau to criticize, report, and bring the law down on the agencies dealing in the industry.
The The Federal Trade Commission does not have to set regulations in order to aide debtors because there are tons of sources to check when seeking out a reputable agency to helps you out of debt. But, understand that a company that is a member of either TASC or USOBA would be a safe choice because these organizations were created to shield debtors and to ensure that their member services are adhering to a higher standard.
Clearly, different companies have differing plans and fee structures that will work for different people based on their personal needs, but when the right research is done, the chance of going with an unscrupulous company is drastically diminished, if not completely eliminated. Debt settlement has shown to be an option that helps debtors; it would be a disservice to consumers to all out terminate the industry by implementing unnecessary regulations.
Tags: bankruptcy alternatives, credit card debt, credit card debt negotiation, debt reduction, debt relief, debt settlement, debt settlement companies, debt settlement programs, Debtors, economy, federal trade commission, Finance, Helpfulness, Hospital Bills, Loss Of A Loved One, Medical Illnesses, Member Agencies, Performance Numbers, Settlement Branch, Settlement Industry, Settlement Services, Tasc, United States Organization, unsecured loans, Viable Program