subject: Consumer Debt Settlement Protection Act - How The Government Is Making Debt Relief Easier [print this page] Consumer Debt Settlement Protection Act - How The Government Is Making Debt Relief Easier
Debt relief has become easier because of the help from the government. The federal government has announced a couple of policies for the creditors which is helping the consumers and on other hand the government has made the settlement industry a fair playground by eliminating the fraud companies from the market.
Initially the creditors were not ready for settlement because if the agreed, they took financial loss in terms of loss of principal money loaned out and in terms of income loss from the loss of interest earning. The first breed of problem was accommodated by the release of stimulus cash in the economy and declaring that the creditors who show proof of settlement will be allowed to use this money to cover their costs which include paying salary to the staff and organizational costs. However, the money could not be loaned out.
Loss of interest earning was accommodated by reduction in taxes paid by the creditors. Even for this, the creditors were required to show proof of settlement with the consumers. Once they showed the same, they required to pay less taxes than before. These two policies helped the consumers as the creditors opened for settlement and debt settlement relief became easier.
Again, the fraud settlement firms were eliminated by the introduction of the new law according to which the firms are required to first eliminate debt by negotiation and then ask for service fee. This way, the consumers benefited because they can get genuine help against the money they spend. This is how the government is making debt relief easier.
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.
