Latest study indicates Debt Settlement programs create the “greatest consumer welfare”.

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) September 18, 2009 -- Nationwide Debt Center, a California –based debt settlement company announced the latest study published by Southern Methodist University which indicated that debt settlement programs “create the greatest consumer welfare of any approach,” especially when compared to consumer credit counseling.

Among the interesting findings from the was that almost “30% of the cancellations are due to the consumers either directly paying off the debt or being forced into bankruptcy” and that “debt settlement company has an increasing higher value to customers with higher amount balances and higher total debt, but lower number of accounts, which was what Tony Sabri, CEO of Nationwide Debt Center has been explaining for years.

According to the report's author, Richard Briesch, PhD and Associate Professor of Southern Methodist University's Cox School of Business, the aim of the study was to understand different approaches to debt relief and analyze consumer benefits for each approach.

“Debt settlement companies like Nationwide Debt Center caters to consumers with overwhelming credit card debt,” said Tony. “It gives consumers an alternative that they can work with, and it fills a debt relief void between credit counseling, which many consumers cannot afford, and bankruptcy.”

Tony explained that even though credit counseling is a valid way of getting out of debt for some people, debt settlement is specially designed to assist people to overcome their overwhelming debt. This is especially important given that the long-term unemployment rate in May 2009 was triple the number at the start of the recession, according to the U.S. Bureau of Labor Statistics.

The report made several suggestions to be used in the debt settlement industry. It encourages sufficient industry regulation for the debt settlement industry, a suggestion Nationwide Debt Center embraces. As a member of TASC (The Association of Settlement Companies), Nationwide Debt Center is committed to promoting good industry practices and uniform legislation.

“Many people fail to realize that the credit counseling industry is primarily controlled by creditors who do not always look out for their clients’ best interest and as a result, most Americans who enter into a debt management program through credit counseling do not complete it,” explained Tony. "In actuality, debt settlement is the only model that works exclusively for its clients, and debt settlement firms don't get kicked back monies from the creditors like credit counselors do”. He feels that both the credit counseling industry and debt settlement industry should work together to work towards the common goal of helping the American people get out of their debt.


Prior to Briesch's report, some of the benefits of debt settlement were also discussed in a multi-year study by the National Conference of Commissioners on Uniform State Laws.

To read the report in full, visit http://www.consumercreditchoice.org/.

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