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As debt settlements, bankruptcies, and the unpopularity of credit card companying continue to increase, the Obama administration reiterated its support behind legislation in Congress that would put restrictions on the imposition of higher fees and interest rates on consumers. Following on promises made during his campaign, President Obama met with top brass from the largest credit card issuers in the country to push them toward action that would reduce abusive practices.

The meeting at the White House occurred as the House of Representatives worked to finalize new curbs on credit card fees. In addition to the curbs, senior White House officials pressed for a provision that forces require credit card companies to prioritize payments so that the first money to come in from a consumer is applied to debt carrying the highest interest rate.

In a separate action on Wednesday the House Financial Services committee passed a bill that would decrease and/or limit a variety of fees and penalties currently being charged by credit card companies. The bill was sponsored by Rep. Barney Frank, D-Mass., and Rep. Carolyn B. Maloney, D-N.Y

The bill could reach the floor of the House where hopes are that it will fare better than a similar bill passed by the Senate Banking Committee three weeks ago. That bill barely passed with all Republicans on the committee in opposition. Pressed by credit card industry lobbyists, Senate Republicans will attempt to block that bill but public sentiment and pressure from the White House are likely to influence its passage.

Senate Republicans, industry executives, and lobbyists contend that passage of these bills is redundant due to the fact that the Federal Reserve has already adopted a series of similar restrictions that will go into effect next year. Another of the group’s contentions is that the passing of the legislation could further reduce lending in the face of tighter credit card company restrictions and the inability of consumers to obtain financing through other means. In reality, it could be that real agenda is to delay the inevitable to allow for fees and high rates addressed in the bill to be charged for as long as possible.

Debt Settlement programs, Debt consolidation help

Defendants in a lawsuit have the greatest thing on their side; time. This is especially true during injury lawsuit cases, which can be years before a verdict is reached. During this period of time a plaintiff is usually not able to work and has no source of income. A large amount of debt or financial strain can build for that person during this time. The main reason people settle lawsuit cases early and for lower amounts is because of financial issues, don’t become one of them!

As an example we’ll use a person who was injured in a car accident by a municipal vehicle of the city they live in while driving. One of the issues in this type of lawsuit is that this person can no longer work due to the injuries obtained by the accident. So, that person is expecting reparations to help them financial for the rest of their life. an also includes medical, court costs, and emotional damage.

The plaintiff will have no income during this period because they cannot work, and will be stuck having to use their current assets. After about 3 to 6 months into the case the debt is building up for the plaintiff, bills are due and their house is close to foreclosure. They accept a settlement agreement far lower than he real amount due to them to prevent losing their home and going into financial ruin.

A better option for this person would be a settlement loan. This isn’t really a loan; it has nothing to do with your current income or credit history. A settlement loan is really a company buying interest into your lawsuit. They are loaning you money that is only paid back if you win the case. If the case is lost the money is yours to keep and you don’t pay back a dime.

Getting a settlement loan instead of settling your case earlier is a great way to handle all your financial needs during the case. This also allows your attorney to fight the case to the end and obtain the maximum amount of money due to you. Don’t be a fool and settle for a less amount when a settlement loan is a much better alternative!

As the economy continues its rough ride, the fallout from mortgage and credit card late payments and delinquencies has dropped the credit scores of consumers across the country. As credit scores take a higher profile from news reports to conversation at cocktail parties, more consumers are taking interest in their credit reports. The problem with all the information and chatter is that much of it doesn’t accurately reflect what is important regarding credit scores and what is not.
Take this true/false test to see where you stand:

1) You should check your report on occasion whether your are applying for a loan or not

2) Checking your own report can hurt your score

3) Closing a credit card account you are not using can hurt your credit score

4) All credit scores are not the same

5) Paying off outstanding balances is a great way to boost your score immediately

6) A credit score is the same as a credit report

7) Comparing loans can hurt a credit score

Debt relief options hurt more than they help

…and the answers are:

1) True – Reporting errors don’t happen every day but they do happen. Checking your report can save you from being surprised when you apply for a loan or a credit card. You can visit http://www.annualcreditreport.com/ for a free, no-obligation copy of your report.

2) False – Checking your own reports does not damage your score. Employer and landlord checks will not damage a score either.

3) True – One of the factors in calculating a credit score is the amount of unused but available credit, specifically on credit lines and credit cards. Closing these unused accounts can actually lower your credit by removing available credit from the report.

4) True – Between the three reporting agencies (Equifax, Experian and TransUnion) the scores will most likely be similar but not identical as each agency receives and compiles data in different ways.

5) False – Credit scores reflect an extended time frame so the sudden paying off of manageable balances won’t add much immediately. In fact, depleting cash balances to these pay off might hurt the overall review of you as a borrower.

6) False – A credit report is a history of your debts, payments, available balances, and open/closed accounts. The credit score is based on a formula that takes all that information and calculates a number between 300 and 850.

7)  False (and true) – Hard loan inquiries for mortgages that come in over a span of about two weeks will not hurt a credit as agencies accept that loans might shopped generating multiple inquiries. Multiple credit card inquiries can hurt a score.  

False – For consumers in trouble debt relief options can provide viable solutions to insurmountable debt. While these options will temporarily decrease credit scores, credit counseling, debt settlement and bankruptcy each have long term advantages for getting out of debt. Debt settlement is rapidly increasing in popularity due to the immediate reduction, usually around 50%, of monthly principle payments and the reduction in principle owed by 40 to 60%. Additionally, the timeline for getting out of debt is shorter than credit counseling and filing bankruptcy. Credit counseling can help to manage bills, and lower interest rates and monthly payments to creditors when debt issues are still manageable. Bankruptcy, an even more serious alternative, should be considered a last resort and discussed with a bankruptcy attorney.

Credit scores are more important ever. Knowing what affects them and what doesn’t could make a huge difference in whether you get the loan you want or get it at all. Prior to doing anything that might hurt or help your score, be certain that your actions will help your financial picture.

Bankruptcy debt settlement / Debt settlement attorney / Debt negotiation services

When it comes to the different types of lawsuit cases it can be mind boggling. There are over fifty different types of civil court cases; thousands if you branch them off into their own specific field. Many plaintiffs in the middle of a lawsuit seek pre settlement loans as a source of cash during their pending lawsuit. They may use this cash to pay bills or even to fund their lawsuit case. Regardless of the reason a plaintiff should know what cases lawsuit settlement loan providers accept. In theory with so many different lawsuit loan providers in the industry one will at least fund your particular type of case. However, there is a general set of cases that they all will fund. Below is a quick list of the different cases that the majority of the providers will give loans for.

Asbestos Auto Accident Aviation Breach of Contract Civil Rights Class Action Commercial Litigation Construction Negligence Copyright (and other intellectual property) Litigation Divorce Funding Employment Discrimination Environmental Litigation FELA (Railroad) Fraud General Negligence Inheritance Funding Jones Act Legal Malpractice Litigation Funding Mass Tort Medical Expenses Funding Medical Malpractice Mesothelioma Motor Vehicle and Passenger Injury Nursing Home Malpractice Patent Law Pedestrian Injury Personal Injury Pharmaceutical Litigation Plane Crash Premises Negligence (slip & fall) Primary Pulmonary Hypertension (PPH) Product Liability Securities Fraud Settlements Sexual Harassment Slip-and-Fall Structured Settlements Surgical Expenses Funding Trucking Vioxx Whistle blower Workers Compensation Wrongful Death Wrongful Termination Zyprexa

As you can see, the list of cases lawsuit loan providers will fund the plaintiffs for is staggering, and this isn’t even a complete list. This just provides you with the basic civil court cases a settlement loan provider may or may not provide plaintiffs with loans for. Regardless of what type of lawsuit case you’re currently involved in you should research the providers list of acceptable cases “before” applying for a lawsuit loan. This will save time and effort while trying to get access to the cash you need. If you want to learn more about the different type of lawsuit cases accept or want to apply for a lawsuit settlement loan then continue below.

During a lawsuit a plaintiff can have a major financial burden. This is especially true with injury or workmen’s compensation lawsuits. During these the plaintiff cannot work or is unable to work, eliminating their income source. During this period a huge debt can occur, including lose of property due to non-payment on an outstanding loan with a traditional financial institution. Vehicles can also be repossessed during this period due to non-payment. There is a solution: a settlement loan.

The American Bar Association prevents attorneys from loaning money to their clients for a few reasons. The main factor is the fact that if your attorney was to lend you money during a pending lawsuit it could create a conflict of interest. An example would be you owing an outstanding loan to your attorney and feel obligated to settle for a less amount to satisfy that loan. This is where settlement loan providers come in to save the day.

A settlement loan is really not a loan, unlike traditional loans your current income source and credit history do not play a factor in its approval. Instead, it’s based upon the merit of your pending lawsuit. Factors considered are the amount of money being sought, the stability of the case itself and past results in cases related to it. Also, unlike traditional loans you don’t have to pay back a settlement loan if you lose your case; the money is yours to keep.

This is a great asset to a plaintiff who has financially responsibilities and no income source. It allows you to borrow against the amount your case is worth, and can be spent on whatever you like. This includes bills, vacations, medical bills, legal funding and much more. The hidden aspect that many people over look is the fact a settlement loan allows a case to complete fully.

It’s common for plaintiffs to accept a settlement instead of the court issuing a settlement amount. This is usually much lower than what they would receive if the court was to make the settlement order. So, in theory not only can they help support your financial needs during your pending case they can also help your attorney achieve the maximum amount of money due to you.

It’s a horrible thought, it’s been 18 months since your accident and your lawsuit has finally reached a favorable verdict and you were awarded monetary compensation. Then, you get notification from your attorney that the defendant in your lawsuit is appealing the verdict. This means you’re going to have to wait even longer before you can receive compensation; while hoping the verdict remains the same in the higher court the case is being appealed in. What can a plaintiff in this type of situation do?  The plaintiff has the option of applying for a lawsuit post settlement loan.

A post settlement loan is really the same concept as a pre lawsuit settlement loan, instead it’s applied for after a verdict has been reached in favor of the plaintiff, but the defendant has appealed the case in a higher court. Appealing a lawsuit verdict is common practice in civil law. It also prevents the plaintiff from getting his compensation and allows the defendant to try and over turn the verdict in a higher court; thus leaving the plaintiff with nothing. By the end of a lawsuit the plaintiff will most likely have lots of bills to pay (including medical, legal, car\auto, etc). This is why a lawsuit post settlement loan can be an excellent choice in a situation where the defendant has appealed the verdict.

A lawsuit post settlement loan is the same concept as a standard lawsuit loan; the only difference is you apply for a post settlement loan “after” a verdict has been reached and the defendant is appealing the verdict; unlike a traditional pre settlement loan where you’re getting the money “before” a verdict has been reached. Post settlement loans are non-recourse debts; this is due to the fact that if the defendant’s appeal gets the verdict overturned you are “not” required to pay back the money given to you via the post settlement loan.

As you can tell this is an excellent way for a plaintiff to access to funds if they are in need of cash. It’s common for plaintiffs in long drawn out lawsuits to build up debt during the period of the lawsuit; some plaintiffs even get on the verge of bankruptcy or actually have to file for bankruptcy. Don’t be one of the statistics, let a post settlement loan prevent you from financial ruin and get access to cash you need, when you need it. If you’re ready to learn more about a post or pre settlement loan then continue below.

You will find yourself deep in trouble if you would stop making the payments and the installments for your loans. This will add up the interest and the net amount will keep mounting up. Once few installments are not made, you will find yourself in real trouble. If this is the case, then there are only a few options left with the borrower. He either has to go for debt settlement or for debt consolidation. Here we will discuss the chances of getting through a debt settlement successfully.

The debt settlement is helpful solution for the people who are deep into the loan and are not able to pay it back. You can enter into debt settlement through your lawyer or you can hire a company to do this work for you. Choosing a company for debt settlement is always a better option. This is so because the debt settlement companies are there to help you. They do make profit from this and they also charge for their services, but they will surely take you out of the deep waters.

Some debt settlement companies do not charge anything upfront. You will have to pay the service charges and the other relevant fees once you have achieved a settlement over your debt with the lender. This thing makes the debt settlement companies an ideal choice.

You can also file for bankruptcy under chapter 7. But this is not the best option to get a debt relief. This is also not something that the banks will desire. They would want you to stay away from bankruptcy and try the settlement. This makes it easy to go for the settlement. The banks or the other lenders would be eager to talk about the settlement rather than bankruptcy. Generally, the settlement is resolved between 25-70 percent of your total outstanding income.

The role of the debt settlement company is simple. They enter in to negotiations with the lender on your behalf and they talk about different possibilities to give you a debt relief. Generally the company tries to get the outstanding amount waived of. You will only have to pay the monthly installments.

Remember that the debt settlement procedure can only be initiated for the credit card debts and this debt relief is not available for the other loans such as student loans, auto financing and mortgages.

Do not think that the debt settlement is a debt relief for the borrower only. It also helps the lender. There is no doubt about it. No lender would want to see a bankruptcy filed by his borrower. This always puts you in a better position to get the things done in your favor.

Do not go for debt settlement until there is no other way out. The debt settlement will not give you anything good. You will end up having a bad credit score and you will be in the records for a debt settlement. This will badly influence your financial future because the lenders and the creditors will not be willing to trust you with anything.

With consumer debt at an all time high, increasing numbers of people are looking for a way to financial freedom. As a result, the popularity of the debt settlement company is growing at a steady pace. A debt settlement company offers one of the quickest ways out of debt today. These companies, sometimes referred to as debt negotiation companies have arbitrators that negotiate directly with your creditors to have your unsecured credit balances reduced.
 
When you are looking to get relief from your debt problems, a lot of people tend to feel that the only good solution is to go about getting credit counseling or to even file for bankruptcy. What a lot of these people do not realize is that there is a little known about process that is known as debt settlement. The goal of debt settlement is to allow you to not only meet the requirements and needs of your creditors for less than what they say that you owe them but to also save you as much cash as possible throughout the process of it.

One of the many reasons why a lot of people choose a debt settlement institution is because their amount of debt amounts are highly out weighing what they are capable of managing in order to back the full amounts to avoid having to file for bankruptcy. Another reason as to why a lot of people choose to go about a debt settlement company is simple because they are way too fed up with the credit card companies because they are constantly increasing the interest rates to unfair advantages and they refuse to lower it no matter how much you try and get them to.

However, the absolutely number one reason as to why people choose to utilize a debt settlement company is to relieve the burden of being in debt. The burden of debt becomes such an overwhelming thing that their biggest goal is to become debt free and as a result it outweighs the thought of what could happen to their credit profile if they do not act upon it immediately. This is why the debt settlement process is something that is gone after when trying to accomplish the goals of getting out of debt and staying out of debt.

It becomes absolutely needed to eliminate your debt before trying to improve your credit score. This is because thirty percent of your score is determined by your debt to credit ratio so if you happen to have a lot of outstanding debt your score will be a lot lower than it should be which as a result can hinder your chances of getting anywhere financially. Your credit profile is a good indication of your history in terms of payments and late payments and such but it is one hundred percent possible to improve your score over a period of time because in the United States everyone gets a second chance at doing that.

Banking and financial institutions would love to keep you locked into the state of mind that your credit score is the absolutely most important thing in your life. Do not get suckered into feeling this way because it’s their way of fearing you into doing things their way. It is by all means an important part of your life but in no way should you allow it to dominate your life and make it so that it is the only thing that you care about. These financial institutions do not really care about you; all they care about is making more money. Why else would they raise your credit limit on your credit cards in order for you to charge more things to it? It is because they know that you are likely to fall into some sort of debt like most Americans and as a result they will make more money off of you and your debt.

When you are looking about the different options and as debt settlement comes to pass you realize that it is your choice to become debt free. There are typically two different types of companies that can help you in becoming debt free over time. The first one is the type of Debt Settlement Company that you see advertised everywhere that happen to not be lawyer based. The others are law firms that happen to have a debt settlement service as one of the things that they offer to people.

When you are searching for a debt settlement company there are some important things that you really do need to consider before choosing the right one that will help you become debt free. There are even some things that you should steer clear from if you want the best possible help for your current financial situation.

The first thing that I would like to point out is that any of these companies should be able to save you at least half of your debt including the fees that you have to pay and the paying of your creditors. While on your own you can typically save around half of that without too much effort on your behalf, getting any more relief than that will require a fair degree of experience that you do not have. One thing you need to be aware of when attempting to speak to someone from any debt settlement company is that you should always do your homework first. There are some companies out there that just want to make as much cash as they can off of their clients without any true regard for their own problems. These people say just about anything that you want to hear in order to get you signed up with their programs.

One way to see through all of the best is that some of these companies will tell you that you can set up a monthly payment for any amount that the client wants. This payment will usually be quite low and for a lot longer period of a time that many of the more reputable companies will allow you to have. This obviously will remove the purpose of what you are trying to accomplish because the longer the period of time you have to pay off a loan the more interest that will pile on and the more you will end up having to pay back as a result.

When you are looking about the different options and as debt settlement comes to pass you realize that it is your choice to become debt free. There are typically two different types of companies that can help you in becoming debt free over time. The first one is the type of Debt Settlement Company that you see advertised everywhere that happen to not be lawyer based. The other is law firms that happen to have a debt settlement service as one of the things that they offer to people.

A lot of people get into the mind set that there is a magic way to fix any of their problems quickly. These bad companies understand this need and typically are very good at catering to that and as a result sign up thousands of people on a yearly basis. Be careful of what they tell you because at first it may sound like a great deal but they do not usually include how much it will cost you in the long run. The first thing that you need to ask them is if their claim of savings includes their companies; fees or not.

You should also make certain that you have a realistic time frame for paying back your debt. There is a huge benefit in going with a debt settlement company in that you can become debt free in a short period of time instead of paying the minimum payments to your creditors which with interest takes quite a long period of time to finish up. You should most definitely pick a debt settlement company that is going to focus on getting you debt free in two or less years only. This is because by stretching your payment plan further than three years time you will never get the full benefits that you are seeking out due to increasing interest piling on. The longer the program is that you sign up for the more debt you will end up having to pay out of as a result of it.

You should also make certain that the collection calls will be stopped from being made. One of the bad aspects of these debt settlement companies is that in order for your creditors to be willing to let you pay less you are going to have to fall behind on your payments to them. As a result of this you will end up getting several calls from collection agencies. This can be very annoying and just straight up aggravating. So when it comes to getting these calls stopped the only way that you can legally get them to is by having a lawyer from the debt settlement company to represent you.

As a result of this they must contact your lawyer or they will be faced with a law suit otherwise. If you are told from your debt settlement company that you can have these calls stopped to make certain that they have a lawyer to aid you in this. By law a collection agency does not have to deal with the debt settlement company unless they provide you with an attorney. If they tell you to just send a cease and desist letter to the collection agency, be careful, because you will leave them with no option but to serve you with papers to appear in court and as a result could end up being sued.

You need to make certain that the company you go with is a reputable one. To start with you should check out the better business bureau to see if they have any negative comments regarding their business practices. After this you should consider how long they have actually been in business as a general rule of thumb is that a company that has been in business for over ten years in good standing should give you some sense of peace in knowing that they know what they are doing and have helped a lot of people in the years past.

If the company you go with is only a year or two old be wary of this because there are lots of fly by night operations that sign up lots of people knowing that they are not going to be able to help them just to get the collection fees and when that is over and done with they close up shop and start a new company. If you end up going with a law firm you should obviously make sure that they are registered with the state bar association. If you have a problem and complain, they could lose their license, so it is in their best interest to help you if you go with them and do the best job that they can do for their clients.

The warning signs are pretty obvious because if a company has a poor record with the better business bureau it would be best to stay away. If the company is fairly new be sure to do your homework before going about getting their services as it would be in your best interests.

Even though debt settlement is a very smart way to go about getting out of debt just like anything you need to be careful with the place that you go with. If you read this guide carefully you will have a leg up and know how on how to choose the best possible company that can help you and your situation. You too can soon be out of debt completely and have a huge weight lifted off of your chest.

Source: http://www.debtneutralizer.com

If you are looking for ways to get out of your credit card debt, bankruptcy does not have to be the answer. There are a few tips you can use to avoid bankruptcy and find debt relief.
For more information, please complete the Free Debt Evaluation form on the left or contact us at 714-585-2353 or debtneutralizer@gmail.com.

President Obama has promised our country a comprehensive plan to bail the economy out of recession.  In so doing, he may have accidentally misled some people into believing that money will be directly earmarked to help rescue individuals from the personal debt crunches.  Now that news in this area is progressing, more and more people are realizing the truth:  While funds are being distributed to large social programs such as Medicaid, as well as corporate bailouts and infrastructure spending, there is not now, nor was there ever any pan to bail individuals out directly as regards personal debt.  While taxpayer money is being used to fund projects and bail out companies, consumers are getting nothing.  What this really leads to is an increase in taxes, and an economy where almost nobody is willing to lend.

The Economic Crisis Makes Creditors Willing
Because of the massive worldwide economic crisis, families are realizing that now is the time to tighten their purse strings, take hold of their budgets, and get their families out from under the crushing weight of unsecured financial debt.   Fortunately, this economic downturn is affecting creditors as much as individuals, making them more receptive to the idea of debt settlement agreements.  Such agreements allow individuals to pay a part of what is owed and have it regarded as payment in full.  Creditors are willing to do this in order to get their own budgets back in order.  Individuals nationwide are discovering that now is the time to seek out and enroll in a debt settlement program.

A lot of Americans have already done their best to cut expenses and are finding that there’s just no way to make ends meet when it’s time to make their debt payments.  If that sounds like you, perhaps debt settlement should be your next choice. Debt settlement companies have been known to help consumers cut their debt by as much as sixty percent in some cases.  Late fees can be eliminated, and monthly payments can be significantly lowered.  All this is possible WITHOUT declaring bankruptcy. If consolidation is a part of your debt settlement agreement, you could end up with a single affordable monthly payment where you used to have many.  With a plan like this, getting yourself and your family out of debt is an achievable goal.

Most Americans these days are finding that rising prices on everything from gasoline to interest rate have made it nearly impossible to make ends meet.  Credit cards, home loans, student loans, and other forms of debt have paralyzed the average American.  Answering the phone or checking your email can be terrifying if you known it’s going to be another debt collector trying to take money you don’t have.  Finding a safe, trustworthy source of assistance in debt settlement can make all the difference in getting you back on your feet and your life back on track.  Seek out a reputable agency today to get advice on how you can get out of debt.

Credit card arbitration is going away, much to the benefit of card holders. The latest blow to arbitration came Sunday, when Minnesota Attorney General Lori Swanson announced that the state had settled with the National Arbitration Forum (NAF), which administers arbitrations as put forth in standard customer agreements with issuers. Swanson had sued the St. Louis-based company a week earlier for what she said was its unfair handling of debt disputes. “This is an issue beyond any one problem company,” said Swanson. “It is a systemic industry wide problem. Consumers are giving away rights without even knowing it.” Seemingly trying to avoid the microscope that the National Arbitration Forum had been under, The American Arbitration Association said on Tuesday it will voluntarily stop participating in credit card related arbitrations until new guidelines are established.

The lawsuit accused the NAF of violating state consumer fraud, deceptive trade practices and false advertising laws by hiding financial ties to collection agencies and credit card companies. Most people that have signed a credit card agreement never realized that they were giving up the right to sue the credit card company when they feel that they had been wronged by the issuer. The other unknown aspect of the arbitration clause was that the members of the panel that would hear the case would be in the pocket of the credit card companies, selected for previous rulings in favor of credit card issuers.

The Obama Administration, having already signed the Credit CARD Act in May which regulates abusive credit card practices, recently proposed a ban on arbitration agreements in credit card agreements in their effort to expand customer protections. The credit card industry, already preparing for regulations of the Act which start its first phases in August, finds itself now on the defensive on another front, one which has provided consistently favorable rulings, allowed it to aggressively go after unpaid debts, and shielded it from class action lawsuits.

The value of the arbitration clause to credit card industry is undeniable, and is likely to be defended vigorously despite the exit of its two biggest arbitration firms. “Arbitration is a valuable way for consumers and businesses to resolve disputes in a very low cost and fair manner. Take it away and consumers will suffer,” said Kenneth Clayton of the American Bankers Association. Finding those customers that will suffer without arbitration may be difficult as the proceedings were stacked against card holders from the beginning. In her statement about the NAF settlement Swanson said: “To consumers, the company said it was impartial, but behind the scenes, it worked alongside credit card companies to get them to put unfair arbitration clauses in the fine print of their contracts and to appoint the Forum as the arbitrator. Now the company is out of this business.”

Further evidence of stacking the deck was found in a study by Public Citizen which revealed that credit card companies tracked arbitrators’ rulings and would not allow the arbitrators who ruled against them to sit on panels which involved the issuer. Public Citizen’s study also found that “Among cases with an arbitrator appointed by the National Arbitration Forum, 94 percent resulted in decisions in favor of the business.”

The end of mandatory arbitration throws a curve at the credit card industry at a time when it is facing challenges from all sides. It wasn’t long ago that if a card holder fell behind on payments, the only option was to seek credit counseling which was done on a nonprofit basis but clandestinely sponsored by the credit card companies. If credit counseling didn’t provide the desired results for the card issuers, the card holder would then be mandated to go to an arbitration which was also controlled by the credit card companies.

Now, with options like debt settlement, consumers have a much better chance at receiving an outcome that goes in their favor. Debt settlement, also known as debt negotiation, is a relatively new form of relief in which the process gets as many concessions for the card holder as possible. It is an adversarial negotiation where a law firm negotiates on the card holder’s behalf against the credit card issuers as opposed to the usual method of dealing with a system that was charged with carrying out the issuers’ agenda.

Card holders entering a debt settlement immediate see a reduction of approximately 50% on their monthly payment obligations for accounts that are being settled. In addition to credit cards, accounts that can be packaged into a debt settlement are; medical bills, unpaid utility bills, signature loans, and many other forms of unsecured debt. The settlement process then aims for full payoff of participating accounts with balance reductions ranging from 40 to 60%. The payoff schedule is then tailored to the card holders’ current financial situation with payoff times ranging in length from 18 to 48 months. Once the reduced balances have been met the participating accounts are considered to be paid in full.

According to information contained in the lawsuit against NAF, there were 214,000 arbitrations in which they participated in 2006. 94% of the card holders in those cases undoubtedly spent time and money to ultimately get a decision that was unfavorable to them. With the elimination of arbitration, it’s uncertain now how issuers will attack struggling credit card holders but with their political clout and resources they will likely find a way. The good news for struggling card holders is that with a firm negotiating their debt settlement, they can protect themselves as well.