New Jersey considers debt resolution licensing to enhance consumer protections

A proposed bill in New Jersey aims to reshape the landscape of debt resolution, offering consumers an alternative to bankruptcy. During a recent Assembly meeting, key stakeholders emphasized the importance of this legislation, which seeks to establish a licensing regime for debt resolution companies while enhancing consumer protections.

The bill would align state law with existing federal regulations, notably prohibiting advanced fees from debt resolution companies until a settlement is reached. This means consumers will not be charged until they have agreed to a settlement and made a payment towards it. Additionally, the legislation ensures that consumers retain control of their funds throughout the debt resolution process, with access to their money at any time without penalties.

Natalia Brown, Chief Compliance Officer at National Debt Relief, highlighted the significant consumer benefits of these programs. She noted that many individuals entering debt resolution typically carry around $30,000 in unsecured debt, often due to unforeseen financial hardships. The proposed bill aims to provide a viable option for those who do not qualify for Chapter 7 bankruptcy and wish to avoid the long-term negative impacts of Chapter 13 bankruptcy on their credit reports.

Brown shared testimonials from clients who have found relief through debt resolution, emphasizing the program's focus on transparency and long-term savings. The bill is positioned as a necessary tool for New Jersey residents facing financial difficulties, aiming to empower consumers while fostering a more supportive economic environment.

As the Assembly continues to deliberate on this legislation, the potential for significant changes in how debt resolution is approached in New Jersey remains a focal point for both lawmakers and consumers alike.