Is Debt Settlement Legal?
August 17th, 2011 | 
Author: 
With so many people struggling with credit card debt these days, debt settlement has become a very popular option.
And when researching debt settlement companies, many only offer their services in specific states. Which leads to the question: Is debt settlement legal in all 50 states?
From the perspective of the consumer, the answer is simple. Settling your debts with a creditor is perfectly legal. You can call or write to any creditor, negotiate with them to pay off your balance for less than you owe, and if they agree, you pay the lesser amount. And your credit card debt is paid off in full. You don’t need any special permission or license, and there is nothing illegal about settling your debts this way.
When hiring a professional debt settlement company to negotiate with your creditors, the answer is a little different. The laws vary from state to state, with some states clearly defining what type of debt help a financial professional can offer, and others having little to no guidelines. Unfortunately, is many states the laws are not entirely clear.
So when comparing your options, you may find that some settlement companies service your state, and others do not, as there can be different interpretations of the law by different companies. And some laws were developed years ago, and do not reflect the current status of credit card debt in the United States.
Even more important than the legal status of debt settlement is the ways in which these companies treat their customers. Sadly, there are many companies that offer to settle your debt by collecting large up-front fees, and then either don’t deliver the service they promised, or don’t educate their clients as to how the process of negotiating a settlement really works.
How can consumers protect themselves from dishonest debt settlement companies?
Check with the Better Business Bureau. While the BBB is not a guarantee that a company will deliver outstanding customer service, it does allow consumers to see how they’ve treated other customers in the past. Any company with more than a few unresolved issues should probably be avoided.
Mark Brinker from Hoffman, Brinker, & Roberts feels that the BBB seal on their website “gives consumers a huge vote of confidence”. Especially when a review of Hoffman, Brinker, & Roberts BBB report reveals zero unresolved conflicts.
The bottom line is that debt settlement is a legal, honest way for consumers to avoid bankruptcy and get out from under the weight of heavy credit card debt.
Posted in Debt Settlement | 
Tags: 50 States, Bbb, Creditor, Creditors, Current Status, Debt Help, Debt Settlement Companies, Outstanding Customer Service