One type of company is making a killing in the current economic situation. Whereas many credit companies are feeling the pinch of the slow down in consumer spending and debt payments, debt settlement companies are experiencing an uncustomary rise in business.
Debt settlement companies offer beleaguered consumers with large credit card debts a way out of their debts at a seemingly lower cost. Many consumers are hooked by the promise of debt settlement companies, and who wouldn't be? Debt settlement companies offer indebted credit cardholders the chance to settle their outstanding debts at a fraction of its original cost. Usually, they offer a settlement of anywhere from 30% to 70% of the original debt.
Faced with the possibility of bankruptcy and the difficulty of generating enough income to pay off debts, it is quite understandably why many consumers take up the offers of debt settlement companies, even with their high service costs.
As a result of the boom, debt settlement companies are excited and more than a little worried. Excited because, as the credit crunch continues and more and more people try to find a way out of debt, they are becoming one of the most popular options available for consumers. The rate of their rise has been astronomical during the past few months. However, there is also quite a bit of worry among practitioners in the debt settlement industry.
One of their worries is the future: will they still be growing as fast then? Understandably, once the number of debt ridden consumers begin to lower, debt settlement companies are going to see their business slow down. Another concern, and something more immediate, are the regulations that the government is planning to put on the debt regulation industry.
In fact, the debt settlement industry is currently facing off against some very formidable detractors, including state regulators, several members of Congress and the Federal Trade Commission. The credit industry are not too fond of them either and even consumer advocates are quick to put down the industry.
Most complaints stem from the fact that some debt settlement companies, instead of helping people, are actually putting them in more serious problems instead. What's more, the services being offered by debt settlement companies are actually services that any consumer can do for themselves, something they are not apt to point out to their customers.
However, not all debt settlements are involved in unfair practices. Thus, some of them actually welcome the planned regulations of the government for the debt settlement industry, seeing it as a way to clean up the industry.