subject: Federal Stimulus Money and Debt Relief - How You Can Benefit From Stimulus Money to Aid Debt Relief [print this page] Federal Stimulus Money and Debt Relief - How You Can Benefit From Stimulus Money to Aid Debt Relief
Debt relief and the recession are very closely related to each other. Most of the people are surmounted with huge debts because of the recession. Since they are down in debt they are out looking for debt relief. The recession has forced them to clear their debts as fast as possible. They can not survive without clearing their debts. Thus it is a wave of events triggered by the recession.
The dark days of the recession have had the following typical affects that are affecting the economy as a whole:
- Most financial institutions have bitten more than what they can chew. They have lent out more money than they could afford.
- Unsecured debt has created the bigger problem. Secured debt has a back up but unsecured debt does not have any assets backing up.
- As a result financial institutions are finding it very difficult to survive.
- If there are large scale defaults by Credit Card users, the financial institutions will go broke.
- The recession has dimmed the hopes of recovering any money from the debtors.
- If 50 to 60 percent file for bankruptcy the financial institutions will be beyond recovery.
- If the financial institutions break down the federal government will no options of reviving them.
Keeping this dark scenario in mind the government has introduced debt settlements with the help of stimulus money. The stimulus money is to help the financial institutions to recover. With the help of stimulus money the financial institutions are able to offer a bail out package to the debtors. This is termed a debt settlement. The debtors are motivated to pay up to 50 percent of their debt in one go. Thus the Credit card companies get to recover 50 percent of the bad debt. Once a delinquent account is closed with 50 percent recovery, the company is free to move to the next settlement.
So make hay when the sun shines. Jump for a debt settlement.
Debt settlement is a viable alternative to filing bankruptcy. Most consumers are able to eliminate at least 60% of their unsecured debt while avoiding many of the negative consequences with filing bankruptcy. If you are over $10k in unsecured debt you will be eligible for debt settlement.
