Yesterday I was a guest on Allan Handelman’s radio show and took a call from a listener who faithfully paid a debt relief company $450 a month for two years. But that firm never paid a penny to his creditors, and then abruptly closed shop.
Today at 1:30 pm ET, FTC Chairman Jon Leibowitz and Vice President Joe Biden will announce a new debt relief rule designed to help protect consumers against debt relief abuses. It’s expected that the rule will restrict the marketing of debt settlement services and place limitations on the upfront fees that settlement companies can charge.
At Credit.com we’ve warned consumers to be very careful when considering debt settlement, and have suggested questions to ask a settlement company before you do choose one to help you with your debt. We understand that debt settlement can be a legitimate option for consumers who have too much debt to qualify for a debt management plan administered by a credit counseling agency, and either can’t – or won’t – file for bankruptcy. And in my ebook Reduce Debt, Reduce Stress, I profiled several consumers who successfully used debt settlement to get out from under crushing credit card debt.
Today at 1:30 pm ET, FTC Chairman Jon Leibowitz and Vice President Joe Biden will announce a new debt relief rule designed to help protect consumers against debt relief abuses. It’s expected that the rule will restrict the marketing of debt settlement services and place limitations on the upfront fees that settlement companies can charge.
At Credit.com we’ve warned consumers to be very careful when considering debt settlement, and have suggested questions to ask a settlement company before you do choose one to help you with your debt. We understand that debt settlement can be a legitimate option for consumers who have too much debt to qualify for a debt management plan administered by a credit counseling agency, and either can’t – or won’t – file for bankruptcy. And in my ebook Reduce Debt, Reduce Stress, I profiled several consumers who successfully used debt settlement to get out from under crushing credit card debt.
I will be watching the announcement today, and will be back with a summary of the new rules, and more advice for consumers who are considering using a debt relief company to get out from under overwhelming debt.
Gerri
Detweiler – Personal finance author and Credit Advisor for Credit.com, Gerri contributes
budgeting, debt recovery and savings information online. She is also the
co-author of Reduce Debt, Reduce Stress: Real Life Solutions for Your Credit Crisis.