29 Oct FTC Issues New Rule Applicable To Debt Relief Companies
Just watch television for a short amount of time and you will see several commercials promising to rid you of credit card debt. Are these sales pitches scams? We at Bankruptcy Law Networkhave blogged extensively (click here, here, and here)about these types of companies. Of course, other sites have likewise called these companies methods and “sevices” into question.For example, click here, here. So, yes, Virginia, most are scams.
Now,the Federal Trade Commission has issued a new rule that goes into effect on October 27, 2010, regulating how these companies may do business. See press release here. This is a postive development.
From here on out, these debt settlement and/or negotiation companies will have to comply with stricter rules about how they charge fees to consumers. The companies will have to tell consumers approximately how long it will take to reduce the consumers’ indebtedness and provide the consumer with an option to establish a dedicated account for fees payable to the debt relief provider.
I, for one, am pleased that the Federal Trade Commission has taken this step. As someone who sees the results, or rather lack of results, of these debt settlement companies, Iecho the words of Commissioner Leibowitz that”[t]oo many of these companies pick the last dollar out of consumersâ€™ pockets â€“ and far from leaving them better off, push them deeper into debt, even bankruptcy.â€
If you find yourself drowning in a sea of indebtedness, talk with a bankruptcy attorney to see if it is right step for you. Most bankruptcy lawyers will tell you whether alternative strategies exist to get you out of debt while informing you how bankruptcy may help. That way, you can make an informed decision that best meets your needs and the needs of your family.
Adrian Lapas, Esq.
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