Personal Debt Relief - How Obama's Government Stimulus Money is Helping Consumers Eradicate Debt

During the recent economic slowed own many companies have incurred heavy losses

. This loss has dribbled down to the common man in the form of unemployment and reduced pay. This has resulted in many bankruptcy filings. Bankruptcy affects the economy as a whole and hence the government has given out huge amount of bailout money to the large financial institutions to cover up their losses. This situation has enabled the financial institutions to settle debts of those customers who are finding it extremely difficult to pay off their debts.

Those customers who have been missing out on their payments for at least 3 to 4 months are an ideal candidate for debt settlement. If the debt amount is high the creditors will be willing to work with them to settle the account.

Most creditors do not show interest in settling lower amounts of debts as they think that the debtor will keep making payments or he will lose credit rating for a small amount. Typically, a debtor needs ten thousand dollars or more in unsecured debt to be considered as a potential candidate for debt settlement.

A debtor can hire the services of a settlement company to negotiate a settlement amount with his creditors. The settlement companies usually start by offering to pay a small part of the total debt. The starting percentage is usually 25 % of the total debt. A skilful negotiator will generally close his deal by getting a reduction of at least 50 % to 60 % of the total outstanding amount. A debtor needs to pay the remaining amount in single down payment hence he needs to be ready with that much fund at the time of negotiation. In case the debtor does not have enough savings the settlement company helps him to open a third party account to save money in it.

Personal Debt Relief - How Obama's Government Stimulus Money is Helping Consumers Eradicate Debt

By: Bowen Alfie

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