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Debt Relief

Having trouble paying your bills? You’re not alone. Many people are struggling with their finances. You may be tempted by ads from companies offering to settle your debts for 50 cents on the dollar, but beware – it could be a trap that will leave you further in debt.

Until recently debt settlement companies make big claims about how they can help you and then collect most or all the fee from you long before they have helped to eliminate your debts. You pay the fee whether your debts are settled or not. A new law bans this practice. Companies now have to earn their fee and actually settle your debt before you pay!

Here is the actual language of the new rule. (PDF)

Here is a summary explaining the new protections. (PDF)

If you’re having problems paying your bills read this tip sheet (PDF) and then contact a reputable nonprofit credit counselor by going to www.nfcc.org.

Publications

  • Consumers Union and the National Consumer Law Center’s Model Debt Settlement Law for States

    Debt settlement services hold out the promise of settling debts for less than the full amount owed. To achieve the touted result of settling debts, however, the consumer first has to save enough to fund settlements of the debts. Multiple debts may be involved, and the process may be designed to take several years. While Continue Reading

  • Support for Debt Settlement Consumer Protection Act of 2010

    September 24, 2010 Re:   Support for S. 3264 and H.R. 5387 – Debt Settlement Consumer Protection Act of 2010      Dear Senator/Representative: Our organizations, representing millions of consumers across the United States, strongly support the Debt Settlement Consumer Protection Act of 2010 — S. 3264, sponsored by Senator Charles Schumer; and H.R. 5387 sponsored by Continue Reading

  • FTC debt settlement rule summary

    Under new regulations adopted by the Federal Trade Commission today, for-profit debt settlement companies will no longer be allowed to collect fees for their services until they have settled some or all of a consumer’s debt. The new regulations will help curb deceptive and abusive practices in debt relief services sold through telemarketing. The FTC’s Continue Reading

  • Debt Settlement

    Have you been ripped off by a debt settlement company?

  • Debt Settlement

    Don’t Get Caught in the Debt Settlement Trap

  • What you need to Know about Debt Settlement Services

    Don’t Get Caught in the Debt Settlement Trap Having trouble paying your bills? You’re not alone. Many people are struggling with their finances. You may be tempted by ads from companies offering to settle your debts for 50 cents on the dollar, but beware – it could be a trap that will leave you further Continue Reading

Press Releases

Blog Posts

  • Take a Hike: The Rising Cost of Getting a College Degree

    By: Caitlin Watkins Since the 1980’s, the cost of higher education has increased much faster than the rate of inflation. As a result, the cost of tuition has skyrocketed over the past few decades. The total outstanding student debt now stands at a whopping $1 trillion, and consequently, many consumers and policymakers are demanding changes Continue Reading

  • It’s Not Just Your Mother’s Reverse Mortgage: Pitfalls Impact Multiple Generations

    What exactly should you do when you find out that your mother’s reverse mortgage stripped all the equity out of a family home?  Slap this reality down next to the fact that you may have just lost your mother and you yourself are an aging adult.  What then? Such is the plight of more and Continue Reading

  • Slip Sliding Into Debt: New CFPB Report Confirms Payday Loan Debt Trap

    Today the Consumer Financial Protection Bureau (CFPB) released a new report that chronicles how dangerous the payday loan terrain is for consumers.  Payday loans are short term cash advances on the borrower’s next paycheck.  The costs can quickly grow if the borrower cannot pay off the loan or needs to borrow a second loan to Continue Reading

  • Why The CFPB Is The Best Thing To Happen To Americans Since J.Law

    Jennifer Lawrence is pretty awesome, right? For several years now she’s excelled at playing characters that excite the American imagination- they’re young, vibrant, and struggle against difficult odds or crafty opponents.  The Consumer Finance Protection Bureau (CFPB) is also young, rather vibrant, and also goes to battle with powerful forces but, despite all this, the Continue Reading

  • New Protections for Homeowners and Buyers in 2014: CFPB Rules Go Into Effect on January 10th

    Homeowners and consumers shopping for a mortgage can breathe a bit easier knowing that some new CFPB rules are going into effect in January 2014.  The new rules will bring much needed relief to consumers in the form of new rights and greater protection from harmful practices in the mortgage marketplace, including many of the Continue Reading

  • National Mortgage Settlement Update

    This week the National Mortgage Settlement Monitor, Joseph A. Smith Jr, released a new report looking at how well Bank of America, Chase, Citi and Wells Fargo are delivering on their promises in the $25 billion settlement entered into in February 2012.  The Settlement was entered into to resolve allegations that the banks had foreclosed Continue Reading

  • Furloughed Federal Workers: Worried About Your Mortgage?

    You are not alone.  The Federal Housing Administration (FHA), Fannie Mae, and Freddie Mac have called on lenders to give you a break while you are furloughed during the government shutdown.  They are asking for lenders to temporarily postpone mortgage payments for furloughed government employees and contractors, according to a story recently reported in the Continue Reading

  • CFPB Takes Action Against Company Processing Illegal Debt Settlement Fees

    The Consumer Financial Protection Bureau (CFPB) isn’t letting this week’s government shutdown slow it down!  Today, the agency announced that it is suing Meracord,  a payment-processing company based in Washington state, for allegedly helping debt settlement companies to collect millions of dollars in illegal upfront fees from consumers.  The CFPB is looking to recoup almost Continue Reading

  • CFPB Cracks Down on Illegal “Debt Relief” Practices

    This week, the CFPB took action against a Florida company offering “debt relief” services – in other words, the promise to negotiate on your behalf to obtain a settlement at less then the original amount you borrowed. The CFPB’s complaint alleges that the company, American Debt Settlement Solutions (ADSS), routinely charged consumers illegal upfront fees Continue Reading

  • Most Victims of Bank Wrongdoing Will Get $1000 or Less Under Settlement

    Last week the Wall Street Journal reported some sobering news:  The vast majority of borrowers being compensated for mortgage related abuses will get $1,000 or less, under a $9.3 billion dollar settlement between the U.S. and banks. If that were not bad enough, yesterday the New York Times reported that homeowners trying to cash their Continue Reading

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