New law tightens rules for debt firms « Beating Debt News Archives

New law tightens rules for debt firms June 9, 2009

Posted by BDO in News.
Tags: beating, consumer, counseling, credit, Debt, government, loan, relief
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Facing about $19,000 in credit-card debt, Cindy Sexton of Bloomington turned to the Internet for help last summer.

She latched onto a debt-settlement company that she paid $266 a month to help get caught up with her bills…Sexton was summoned to court twice by the credit-card companies, and her wages were garnished. After numerous calls to the company, she learned that $200 of the $266 was going to administrative and lawyer fees, leaving just $66 going toward an account that would eventually be used to negotiate down her debt.

A law passed by the Minnesota Legislature this spring and that goes into effect Aug. 1 tightens rules for debt-settlement companies, including preventing them from advising consumers to stop paying creditors and charging excessive fees up front.

This situation is starting to happen all over the country. If you keep your ear to the news, many states are imposing new laws on the “Debt Settlement” and “Debt Counseling” services. This is in response to many new companies popping all over the TV, radio, and Internet promising to do magic with all of our personal debt. However, we learn later, their good intentions are only as good as long as their pocketbooks are being filled by your money. Many of those companies are only out to MAKE MONEY. They are not out to help you. Furthermore, most of the “services” they provide you can do yourself.

We’ve talked about this before in the blog entry called, “Debt Relief and Credit Counseling“. Please be careful when resorting to a “Debt Relief” or “Debt Counseling” service. During the “greatest economic downturn, since the Great Depression“, many people are trying to use our frustration, hesitation, and fear to manipulate us to MAKE MONEY and wield power. Be on your guard and stick with your current plan to beat debt to make a successful financial marathon.

For more on this article, click here.

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