Legal Debt Settlement and Debt Relief

Jan. 25, 2010 - PRLog -- For those struggling in today's economy, many of us find ourselves having a hard time keeping up with the minimum payments on our credit cards. Many consumers have had to leverage their credit in an effort to get by. With unemployment rates rising and home values continuing to plummet consumers are left with nowhere to turn. What's most concerning above all is how the credit card companies and banks have responded during all this economic madness.

Rather than work with consumers who are facing financial hardship, they instead take advantage by reducing credit line limits, increasing rates and taking bailout money from the government! Now, let's think about that for one second...if you controlled a bank or credit card company would you respond this way when people are losing their jobs and businesses due to the down turn in the economy? Some would say yes, to offset their losses in the event the account goes unpaid. Others say no, they feel it would make sense to reduce interest rates and provide reduced payment options so that the consumer has an opportunity to avoid delinquency all together.

The truth of the matter is that the "Debt business" is a trillion dollar business. Billions of dollars in debt is sold in the open market every day. You're probably saying to yourself what? How?? Simple, creditors know before they even lend a line of credit to someone that there's a good possibility that they will default on the debt obligation. Which means either way, they get paid.

If a consumer gets behind, becomes delinquent and the debt is charged-off the creditor has the option of selling the debt to a wholesale debt buyer also know as a Collection Agency. Debt buyers buy delinquent debt in bulk (large volume) from banks and creditors daily. At which time, a pre-negotiated purchase arrangement for say 70 cents on the dollar is available to the debt buyer. The creditor evaluates their delinquent accounts and packages up the ones they no longer want.

The debt buyer makes the purchase and now owns your debt obligation. Now pay close attention, as this is where the Fair Debt Collection Practices Act(FDCPA)and your consumer credit rights come into play. In many cases, when this takes place there are specific laws and regulation in place designed to protect the consumer's best interest. It's important for consumers to become smarter than what the banks and creditors want you to be.

By doing so, you will have an edge as a consumer and be able to prevent your creditors from taking advantage of you in the future. Study the FDCPA and learn your consumer credit rights so that you're educated and know where you stand. For too many years, people have been slaves to debt. There is no discrimination when it comes to debt burden, all you need to have in order to become a debt slave is a social security number.

Surprisingly enough, they even prefer to target people who they feel may not be as financially educated on the subject of lending and debt to solicit. We've all seen the credit card offers come in the mail, if you went to college you'll remember all the booths set up where they would blatantly target students most of whom had no knowledge about compounding interest or credit card billing practices. This is known as "Predatory Lending" and unfortunately is swept under the rug by law makers every day Washington. This is how the creditors win but only if you let them.

Which now brings me to Legal Debt Settlement, also known as the Consumer Law program. This is where the consumer retains an attorney or law firm that specializes in legal debt validation, debt negotiation and debt settlement. The law firm sets up a special purpose savings account in the name of the client, this account serves as holding account during the negotiation process. Once all negotiated settlement arrangements have been made the firm contacts the client for approval to settle with creditor. Generally speaking, the smaller account balances are settled first with the larger accounts settled last.

One of the major benefits of this program is that the consumer has full protection of an attorney during and through out the negotiation process. In most cases a consumer can expect to pay back approximately 50 - 60% of what they owe within 12 - 36 months. One reduced monthly payment amount is structured and scheduled on the due date chosen by the consumer. All attorney fees are included in the amount paid back.

The second major benefit is that the consumer avoids bankruptcy and eliminates their debt at a fraction of what they owe. I hope all of you enjoy this read and have a better understanding of your options in the event you fall victim to your creditors. In conclusion, be sure to address all of your concerns, prior to enrolling into a debt relief program.

Individual results will vary and no specific outcome can be guaranteed. Consumer's credit can be adversely affected during the engagement of such program. Feel free to visit http://www.bulldozemydebt.com to learn more if you need further guidance on this subject matter.

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About Us: Debt Freedom Network is a leading debt relief referral agency that specializes in providing analysis to consumers who are struggling with personal credit card and unsecured debt. The network consists of highly experienced attorneys and debt arbitrators through out the United States. Click here http://www.bulldozemydebt.com/about to learn more.