Debt Settlement Plans To Pay Off Credit Card Debt Popular Among Cardholders But Companies Are Still Charging Fees

Debt settlement companies who offer plans to consumers to pay off credit card debt and other personal debts have been one of the more popular ways that consumers have been able to find debt relief from certain debt obligations, but there is concern that some of these companies may not be adhering to an FTC rules which prevents them from charging upfront fees. Numerous consumers fell upon difficult financial times and have turned to these debt relief organizations as a way to settle debts with various creditors, like unsecured credit card debt obligations, but reports have stated there are some debt settlement companies who are still charging consumers fees and causing additional financial hardship.

Benefits of debt settlement organizations often come in the form of negotiations with various creditors and an agreed-upon payment schedule by the consumer. As an example, consumers who have multiple credit card debts may use a debt settlement company to either negotiate more affordable terms for repayment or seek principal forgiveness in some cases, and once an agreement is reached, a consumer will make payments to a debt settlement organization and this company will then pay creditors from month to month.

Many cardholders turned to these services because they can be more affordable as, again, debts are negotiated and a debt settlement company will reach an agreement with many debt organizations that can be more cost-efficient for consumers in a bad financial position or who are having trouble in their financial life. However, rules from the FTC which were passed late last year stated that debt relief services who sold their settlement plans over the phone were not able to charge upfront fees before he reached a settlement for debt relief.

Some debt relief companies, and fraudulent organizations, simply offer to help consumers erase their debts but charged excessive fees and either offered little or no assistance when finding debt relief options. Reports also indicate that there are some debt settlement companies who have been claiming to be a law firm, sending text messages, or using offshore call centers as a way to slip around FTC rules and collect fees from consumers, which again, can be more troubling than the debt relief service is actually worth.

For this reason, consumers who are seeking out debt relief assistance from a debt settlement organization have been advised to research various companies and organizations which offer to settle debts and make sure these companies have proper accreditation, good reviews, and by checking sources like the Better Business Bureau or simply running a Google search, consumers can find creditable companies who can help him erase their debt without falling into a fraudulent debt relief trap.