In this article I most certainly will discuss the legitimacy, or lack thereof, of the "debt settlement law firm" approach to getting out of debt. Many recent changes in the debt settlement industry have made consumers really confused; this article will open your eyes to the truth of the matter. A fair warning up front this will likely be a long and informative article, so if you're not honestly serious about finding a solid solution to your financial troubles problem then stop reading right today.

Recent FTC Changes

On October 27th 2010, the debt settlement industry was turned upside down by some major changes that the FTC (Federal Trade Commission) had place in place. These implementations by the FTC will vary the way debt settlement companies might conduct business forever; and actually undoubtedly are a benefit to the consumer who comprehends them correctly.

There have been two major changes, the first is a advance fee ban, and the next is full disclosure; both being very important topics to understand.

Let's first examine the Advance Fee Ban so you now have a good understanding why this was implemented and what there are done to the industry as one. The FTC stepped up to act against the settlement industry after many years of complaints from consumers about being tricked and scammed. Many companies were run by people, who had their own pockets in your mind first, not the debtor who needs help.

What attracted so many businessmen on the debt settlement industry was to be able to make quick money with very bit of work. Prior to the FTC changes companies were allowed to charge their entire settlement fee just before ever even contacting a creditor to help negotiate settlement. Needless to say that caused many problems, and untold numbers of naive consumers were paying large fees upfront only to own company never finish the job; therefore leaving them in the much worse situation than they have been already in.

After years of fielding complaints the FTC finally came down and caused it to be illegal for debt settlement companies to charge fees prior to settling. This is great news for consumers, greatly reducing the risk of entering a credit card debt settlement program; at least where losing upfront fees are concerned.

However for the majority of companies in the market this was TERRIBLE news; but for the legitimate and business savvy companies it is actually GREAT news. It was bad for any "scammer" operations; no longer could they just blatantly rip people off, now on the list of to EARN their money by negotiating good settlements because of their clients.

B) Fully disclose both the pros and cons of the debt settlement process.

The problem was that many company sales reps would simply lie, or conveniently not inform prospective clients about the negative aspects to the settlement process which include: potential lawsuit, creditor harassment, negative credit ratings and that the creditors were not necessarily getting paid until settlement ( some companies actually deceive people into thinking they are staying current with their creditors during a debt settlement program ).

So you may be wondering at this point where I am going with all this and what it is due to "debt settlement attorneys", just continue on and will also be enlightened.

The Lawyers Fee Loophole & Deceiving Spin!
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