Debt relief hasn't always been a sure thing and options like financial settlement been quite a risk for many years.
Although debt settlement has been around for over a decade and consumers could use it to clear unsecured debt, it has only recently become popular as more and more consumers could not afford to pay back their loans.
The increase in popularity also meant that irresponsible debt settlement companies would appear as well as fake ones.
This reached the peek at the beginning of 2010 when the number of shady debt settlement companies had equaled the one of the professional debt settlement companies.
This made for many consumers to suffer from online scams and lose a lot of money on upfront fees without getting any results.
Complains started to pile up at the BBB and a change came in 2010 when the FTC issued a new law.
This new law states that every debt settlement company can no longer take upfront fees; only when the negotiations are done and process is complete, can they charge the client for the amount they settled on.
These fees are usually a percentage of the reduced amount and so they have all the reasons in the world to do their best and get a good deal.
With the release of this law, the number of shady financial settlement companies will drastically be reduced and many consumers will win trust in debt settlement.
The small companies will also find it difficult to survive and will rather merge with bigger companies or file for bankruptcy.
The financial settlement industry seems to be more legitimate and the deals made between creditors and debtors are advantageous for both parts.
The debtor is no longer forced to file for bankruptcy and ruin his long term credit and the creditor gets a part of their loan back rather than nothing.
It can be very easy to take advantage of this new law and legitimate financial settlement companies can now be found very easy on the internet without worrying about scams.
A bit of research can result in a great settlement deal and eventually in the clearing of debt.