Debt Settlement Today.

During the late 1970s and early 1990s the booming third party collection industry grew and expanded throughout Canada and the United States.

These agencies assisted banks and commercial business in the collection of debts. With charge offs increasing, the banks began to create settlement departments and policies which continue to this day. The collection agencies were empowered to negotiate settlements with defaulted card holders to reduce the outstanding balances in hopes to recover funds that would otherwise be lost if the card holder filed for a chapter7 bankruptcy. The settlement negotiation or practice revival spread to all unsecured debts, And companies providing debt arbitration sprung up overnight.

However these companies were new to the game and created havoc forcing the Federal Trade Commission to investigate false and misleading statements and in several instances shutting down a few companies. Consumer debt had reached an all time high. With the introduction of several trade organizations and debt management regulations, the debt settlement industry is recognized today as a viable alternative though heavily regulated in order to protect consumers.

The Bankruptcy Reform Act of 2004, making it more difficult for the average consumer to be free from debt, has forced many into the debt settlement option. As our economy worsens and the middle class disappears, debt settlement will continue to grow as a burgeoning industry.