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Basic rights of debt consolidation laws – A brief guide

In the event that you are someone who has a lot of debts to repay, then chances are you will be looking for some kind of debt settlement or debt relief options to help you in this respect. These options are special services which are designed to bring a person out of debts. There are a lot of people who are forced to taking a lot of loans in order to help support themselves financially, however when the time comes to repay the loans; they find themselves unable to sustain themselves and repay the loans. It is for these purposes; debt management and debt relief services are created. These services also have certain legal regulations which they are required to follow for the consumer's benefit, and in this article, you will learn about them.

Using debt relief services

The debt relief services include several methods of debt repayments which can be really beneficial for a lot of people who find themselves in financially difficult situations. The specific services include debt management plans where a company will offer you specifically designed plans to help you manage your finances to repay your debts. Debt relief also includes debt settlement services where a company will be negotiating with your creditors on your behalf and try to reduce your debts and settle your credit. A lot of companies promise to reduce the debts by up to 50 percent. Another popular debt relief service is debt consolidation loans.

Debt consolidation loans involve consolidating all your loans which you have taken from different creditors and then consolidating into one loan and repaying that to a single creditor, in this case, the debt consolidation loan offering agency, in simple monthly installments. A lot of people prefer debt consolidation loans as a debt relief service because it will reduce the interest amount that they have to pay their creditors and also extend the duration for the loan repayment. This will put more financial control in the hands of the consumer.

Legality of these services

The services for debt relief are quite legitimate. However, there are a lot of agencies and financial institutions which indulge in fraudulent activities in order to dupe the consumers and cheat them of their money. It is for this reason that a lot of people feel apprehensive about using these services.  It is for these reasons; there are certain government rules in place to protect the consumers.

The main purpose of these laws is for protecting people from getting disturbed by either creditors or the financial institution which had promised to offer debt relief. These laws help to ensure that the process of collecting the loan amount does not involve harassment of the consumer.

Some of the provisions of these laws:

  1. Although you may be owing a lot of money to a creditor, you will still have to get fairly treated and with respect when the collection is going on.
  1. When the collection firm first contacts you, they are required to inform you about who they are and why they have called you up. They must also let you know the creditor whom they are representing and the amount of money that you owe them. Also, they must provide you with their contact details in order to let you know how you will be able to contact them.
  1. When this first correspondence has been made by the telephone, the agency is required to send you a written letter stating all the details that they had discussed with you in the telephonic conversation. This will generally be taking place within a week after this phone call was made.
  1. You shall have the right to inform your collection company how they will be able to contact you again. You must do this when you have the first telephonic conversation with them. You should be requesting them only to contact you and not contact anyone from your family. Legally, they are not supposed to be calling you either too early in the morning or too late in the evening.
  2. You will also be getting a right to let them know if you do not want them to call you anymore, this is irrespective of whether you have a debt or not. They will be required to send you written letters stating the amount of money to be collected from you and informing you of the action which they will take in case you do not repay the amount within the date specified.
  3. In order to protect the consumer more and help them to give proofs when they have to file any complaints against the debt collection agency, it is essential that all the correspondences of importance, be put in writing. Each correspondence will have a specific reference number. The consumer will have the right to demand written correspondences for every important transactional detail that the company makes with them.
  1. You must request to get a complete breakdown regarding the fees and the rates of interest on that amount which you have to pay the agency.
  1. The debt collection agency will not be permitted ever to use any abusive language or threats or abuse the consumer in any manner whatsoever at any stage under any circumstance.

You can visit reviews in order to learn more about debt relief services and what you should do in order to come out of your specific financial problems.

Conclusion

A lot of people are forced to take loans for different purposes in order to better their situations in life. A lot of people take loans in order to help set their businesses up also. But whatever the reason, people often fall into trouble when they have to repay the loans. Under these circumstances, they can avail of debt relief services to help them alleviate these debts. Knowing the laws regarding these debt relief services will help people to know their rights better when they avail these debt relief services. Hopefully, the information mentioned in this article will have helped you.

 
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