subject: Personal Debt Relief - Why Getting A Personal Debt Bailout Is Possible In A Recession [print this page] Personal Debt Relief - Why Getting A Personal Debt Bailout Is Possible In A Recession
People wonder how is it possible to get a personal debt bailout in a recession. The only thing that they can think off is that because of recession, they have lost their jobs and now they are in financial trouble which means that they cannot get out of debt without filing for bankruptcy. This very notion that bankruptcy is the only method of getting out of debt is a wrong one. There are other alternatives which have been promoted by the Federal government and these relief methods have done well in terms of helping the consumers to get out of debt.
Since the consumers have a notion that bankruptcy is the only way out of debts during recession, it was found that during the recent recession, the number of bankruptcy filings increased at a massive rate. The whole economy had a take a hit because of this. The sad story started with the consumers and then moved on to the creditors and then to the economy as a whole.
When the consumers filed for bankruptcy, they suffered from loss of credit score and they lost their eligibility to get new and fresh loans from any lender for a period of 7-10 years. On the other hand, the massive increase in the number of bankruptcy filings led to a situation where the creditors lost billions of dollars and they found out that their financial equilibrium was lost. Since the creditors lost their financial equilibrium, the whole economy suffered and the economic equilibrium took a hit. In order to stop this, the Federal government came up with new policies and laws that helped the economy.
Filing bankruptcy is made difficult with new bankruptcy laws. The consumers are now required to qualify for bankruptcy by clearing means test. If they fail to clear means test, the consumers are not allowed to file for bankruptcy. On the other hand, the government announced that the creditors who accept the settlement offers made by the consumers will be allowed to use stimulus cash to cover their costs and also they will have to pay less taxes in order to make up for the loss of interest income due to settlement. These two policies helped the creditors to open up easily for the debt settlement deals and the consumers in turn started getting help. The consumers made their way out of debts through settlement deals. This is why getting personal debt bailout is possible in a recession and the consumers are advised to go for debt settlement!
Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement.
