subject: New Debt Settlement Laws - Why Credit Card Debt Is Now Easier To Settle [print this page] New Debt Settlement Laws - Why Credit Card Debt Is Now Easier To Settle
Credit card debt is now easier to settle because of the fact that the creditors are now much more open towards debt settlement deals. They have multiple reasons to be able to accept such deals. The first and foremost thing is that the creditors know that there are millions of people who are facing problems with unsecured loans and the problem of recession has only increased their sufferings. The creditors know that if they do not agree for settlement deals, the consumers will file for bankruptcy and once this happens, the creditors will lose billions of dollars which is not acceptable.
Moreover, the creditors know that there are government policies which will give them financial support when they agree for settlement. The first government aid that the creditors can enjoy is the stimulus cash. It is kind of a bailout for the creditors. As the creditors agree for settlement deals, they lose their principal money which the creditors use to cover the costs that they have. The stimulus cash helps the creditors to cover such costs and ensure that the financial equilibrium of the organization is maintained.
Next aid that the creditors enjoy is a reduction in the tax that they need to pay the government. The creditors are profit making organizations and they need to pay tax on their income. The income of the creditors come from interest earnings on the loans. With settlement, this income stops and hence, to compensate for the loss, the creditors are required to pay less taxes.
It is because of these policies of the government that the creditors readily agree for settlement and therefore, credit card debt is now easier to settle.
Debt settlement can make financial sense for consumers and small businesses that are experiencing a financial hardship and have at least $10k in unsecured debt. It is not the only option however.
