As consumer debt continues to spiral out of control, debt relief is fast becoming a major concern for many American's. In 1999, American's made $1.1 Trillion worth of credit card purchases. In 2001, American credit card debt hovered around $690 billion. Unfortunately, in today's unstable economic conditions, many American's are being forced to turn to credit cards as a way to extend their income. Consumer debt is at an all-time high and American's need to know what they can do to get out of debt. Often, consumers are seeking the services of professional debt settlement companies to help regain control of their finances. However, prior to making such an important decision, it is important to fully understand who you are doing business with.

The most important thing you can do when making the decision get help with your debt related problems is to be an informed consumer. It is absolutely critical to do your research. Do not rush into things; this can cause more harm that good. Prior to signing on with any Debt Settlement company, make sure you ask the following questions and consider their responses:

* How much does the service cost? When choosing a solution for debt relief, it's important to make sure the program is something that's affordable and realistic within your monthly budget. If you can't afford the program and join anyway, you're are just causing more long-term financial problems for yourself; however, if you are able to meet the monthly financial requirements of the program, Debt Settlement is a great form of debt relief for unwanted credit card debt. Most people don't realize that Debt Settlement is the quickest and least expensive form of debt relief outside of bankruptcy.

* Does the Debt Settlement Company you are considering report to any of the three major credit bureaus about your enrollment in their program? Traditionally, debt settlement companies do not report to credit bureaus; however, I have heard of a few that do. Creditors will normally elect to report derogatory information on your credit report, but the debt settlement company you do business with should not.

* Does the company offer any type of service guarantee? If so, what is the guarantee? If a company can not get settlement on your debt, you should never have to pay a fee, or the fee should be fully refunded. Additionally, steer clear of any debt settlement company that promises a quick fix to your debt related problems or tells you that debt settlement will not have a negative effect on your credit. Upon enrolling in a debt settlement program, your credit score will probably get worse before it gets better. This is a minor price to pay for being given a substantial debt settlement and not having to file for bankruptcy! However, it is important to realize that if you want to maintain a "good credit rating", you have to pay you bills on time; anything else will cause your credit score will suffer.

* Does the debt settlement company you are considering have IAPDA certified debt arbitrators? IAPDA certified debt arbitrators possess a solid understanding of the laws governing the Debt Settlement industry and fully understand your current financial situation.

* Does the debt settlement company you are considering offer any type of bankruptcy assistance should debt settlement not work out for you? For example, some debt settlement companies will offer a refund of some of the program costs to help pay for a bankruptcy attorney of your choice. Of course, the funds would have to be paid to a licensed attorney and not directly back to you. Again, a company that does this will most likely have your best interest in mind.

* Does the debt settlement company you are considering belong to the local Chamber of Commerce? If so, is the Chamber an accredited member of the Chamber of Commerce of the Unites States? This type of affiliation will help ensure that the company is conducting business in a proper manner.

* Is the debt settlement company you are considering a member of the Better Business Bureau? If they do not advertise this, you can always inquire with the BBB first. The BBB is a great way to determine if the company has a list of prior complaints. Any company with more than a few complaints per year is a company that you do not want to do business with.

Alan Barnes IAPDA Certified Debt Arbitrator President and CEO of Debt Regret http://www.debtregret.com

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Consumer debt counseling and management (settlement) services have been available to individuals with serious debt and credit problems going back to the 1950's. There are generally two kinds of services that have been available. Some of these services have provided counseling coupled with assisting debtors in establishing programs to pay off debts over an extended time. Others have provided consolidation and management services, in which agreements are reached with creditors to settle on a percentage of debt. Most of these services have collected a periodic amount from the debtors from which payment to creditors has been made. The general objective of these services has been debt satisfaction without resort to bankruptcy.

The history of debt counseling and management services is somewhat checkered. There have been numerous abuses and efforts to counter abuses statutorily in many states. Debt counseling and management services have been criticized in the past for their efforts to steer debtors away from bankruptcy when it may have been more advantageous and less costly for some debtors to file bankruptcy. State legistlators have struggled to find legistlative solutions but the industry remains unregulated in most states. One of the continuing controversies in many states is whether for profit services should be allowed even if regulated.

However, federal bankruptcy reform effective in 2005 has changed the perspective on such services. For an individual to file for Chapter 7 bankruptcy, that individual will in most cases have to show that consumer debt counseling/management has been sought and attempted. This shifts a highly significant burden upon private services to perform honestly and effectively. Because the new bankruptcy rules are federal and apply in every state, regulating the counseling and management services in every state must be uniform in character for the new bankruptcy rules to be effective and for consumers to be protected.

In 2005, just in time for consideration in the state legislatures, the Uniform Law Commissioners promulgated the Uniform Debt-Management Services Act (UDMSA). It provides the states with a comprehensive act governing these services that will mean national administration of debt counseling and management in a fair and effective way.

UDMSA may be divided into three basic parts: registration of services, service-debtor agreements and enforcement. Each part contributes to the comprehensive quality of the Uniform Act.

Registration

No service may enter into an agreement with any debtor in a state without registering as a consumer debt-management service in that state. Registration requires submission of detailed information concerning the service, including its financial condition, the identity of principals, locations at which service will be offered, form for agreements with debtors and business history in other jurisdictions. To register, a service must have an effective insurance policy against fraud, dishonesty, theft and the like in an amount no less than $250,000.00. It must also provide a security bond of a minimum of $50,000.00 which has the state administrator as a beneficiary. If a registration substantially duplicates one in another state, the service may offer proof of registration in that other state to satisfy the registration requirements in a state. A satisfactory application will result in a certificate to do business from the administrator. A yearly renewal is required.

Agreements

In order to enter into agreements with debtors, there is a disclosure requirement respecting fees and services to be offered, and the risks and benefits of entering into such a contract. The service must offer counseling services from a certified counselor and a plan must be created in consultation by the counselor for debt-management service to commence. The contents of the agreements and fees that may be charged are set by the statute. There is a penalty-free three-day right of rescission on the part of the debtor. The debtor may cancel the agreement also after 30 days, but may be subject to fees if that occurs. The service may terminate the agreement if required payments are delinquent for at least 60 days.

Any payments for creditors received from a debtor must be kept in a trust account that may not be used to hold any other funds of the service. There are strict accounting requirements and periodic reporting requirements respecting funds held.

Enforcement

The Act prohibits specific acts on the part of a service including: misappropriation of funds in trust; settlement for more than 50% of a debt with a creditor without a debtor’s consent; gifts or premiums to enter into an agreement; and representation that settlement has occurred without certification from a creditor. Enforcement of the Uniform Act occurs at two levels, the administrator and the individual level. The administrator has investigative powers, power to order an individual to cease and desist; power to assess a civil penalty up to $10,000.00, and the power to bring a civil action. An individual may bring a civil action for compensatory damages, including triple damages if a service obtains payments not authorized in the Uniform Act, and may seek punitive damages and attorney’s fees. A service has a good faith mistake defense against liability. The statute of limitations pertaining to an action by the administrator is four years, and two years for a private right of action.

Banks as regulated entities under other law are not subject to the Uniform Act, as are other kinds of activities that are incidental to other functions performed. For example, a title insurer that provides bill-paying service that is incidental to title insurance is not subject to it.

UDMSA provides comprehensive regulation of debt counseling and debt settlement services. It becomes an essential part of the law of creditor and debtor as bankruptcy reform enacted by Congress in 2005 takes effect.

Visit Uniform Debt-Management Services Act (UDMSA) official website
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Debt settlement is one of those things that many people will have to face at one point or another. Many people are wrapped up in a debt that is at once overwhelming and frightening. It has long been known that we get used to our problems, define ourselves by them on an inner level, and yet, somewhere, know we must let them go.

Considering Debt Settlement is the first step in a long but extremely gratifying journey toward betterment, it is wise to find an escape route from debt as soon as possible. Though it is difficult to face and do something about, the motion forward, into the freedoms that being debt free will bring, is worth that initial shock. Even if the process is a slow one, doing something, anything, is better than doing nothing. Debt settlement is a way out.

Debt Settlement and You
Though it often seems odd to relate something as tangible as money with something so esoteric as happiness, it is a worth while connection. We always hear that money doesn't equal happiness, that in the end, how you live is more important than what is in your wallet, that you cannot define yourself by your bank account, etc.

Maybe money doesn't equal happiness, but debt most certainly equals depression, for some people. How you live is more important than money, but how you care for your money is a direct sign of how you live. You cannot define yourself by your bank account, but you can define yourself by your organization, the care you put into everything you do, and the devotion you have to make your life simpler. Taking care of yourself is a priority, and being a good steward of your money is part of that effort.

Needing Debt Settlement
A solid financial clean up is in order for those who have allowed their debt to get out of hand and take over their lives. Without acknowledging that your debt is a problem, and that perhaps you need a debt settlement plan, there will be no room for forward motion into better living. As scary as it is to face one's debt, having a great amount of ignored debt is a lot scarier.

The feelings that arise from the heavy burden of debt are feelings that do not push one forward into a world of peace and kindness and sensibility. Instead, the build up of debt adds chaos to the background of one's life and, until it is cleared, or at the very least chipped away at, the underlying pressure and turmoil that debt creates will not be loosened.

Accepting Debt Settlement as an Option
The first step in debt settlement, as with most any problem that rests heavily upon anyone's shoulders, is to accept that you need help--seek it out. Feel empowered that you are going to take control of your finances, no matter how slowly it happens. Every slight motion brings you closer to a more satisfied you in the future. Look at yourself and let yourself know that you care, that you want better, and that you will strive to make yourself proud.

Getting rid of debt, in the end, will be a point in your life you look back on as a milestone. Later on, down the road, you will wonder why you didn't face your debt sooner, and question why you were so afraid. You will smile at your old self but beam at your new self. It is important to remember that you have time to get to this future, but beginning the process now will reveal it sooner.

Interested in a career in professional Debt Settlement?
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