subject: Debt Settlement Reduction - How To Take Advantage Of Obama's Debt Relief Tax Breaks [print this page] Debt Settlement Reduction - How To Take Advantage Of Obama's Debt Relief Tax Breaks
Before Obama's government, debt settlement process was not a popular option. Debt settlement companies used to charge fees even before successful debt settlement. Due to this, there were many fake debt settlement companies which diminished the consumer confidence. Government aim is to improve the economy by reducing the bankruptcy cases.
President Barack Obama released huge stimulus money in the recession period to help the economy of the nation which was severely hit by the recession. This plan is considered one of the best financial plans ever implemented successfully.
In this plan, you might get 40-50% reduction from overall debt including taxes and penalties. This reduced amount is paid by government using the stimulus money. You might have to pay the remaining debt amount to the creditor. This way creditor will get the full debt amount and you might have to pay just half of the debt.
If your unsecured debt is more than $10k, then you can opt for a settlement option. In this process, you can negotiate with the creditor to get debt reduction of up to 60% of the total debt amount. You can also approach a settlement company to get help in debt negotiation. Then the concluded reduced amount becomes the final settlement which consumer has pay to the creditor. The settlement amount could be paid immediately or in monthly installments. The final settlement amount includes all the taxes, penalties and interests.
The creditors also provide Tax Breaks in order to free consumers from their tax. Due to these Tax Breaks, consumers can also improve their credit score.
In bankruptcy, consumers might get freed from their heavy debts. But, this is very time consuming and expensive process. Debts will be cleared if consumer succeeds in the court but their credit history will be ruined.
Debt settlement works out best compared to filing bankruptcy. Consumers can be free from 60% of their total debts and can even maintain their credit score. Because of the success rate of debt settlement process, bankruptcy cases have significantly got reduced which in turn improved the economy of the nation.
Debt settlement is a legitimate alternative to filing bankruptcy. Consumers can expect to eliminate around 50% of their unsecured debt with the help of a legitimate settlement program. With the new FTC laws recently passed in July 2010, debt settlement is a much less risky option. If they don't settle your balance you don't have to pay a dime.
Check out the following link for free help from a certified debt relief specialist:
