subject: Personal Credit Card Debt Relief - How Tax Breaks Allow Consumers to Eliminate Credit Card Debt [print this page] Does Anyone Ever Help the Little Guy? Does Anyone Ever Help the Little Guy?
For as long as I can remember, I heard about tax loopholes for the rich, tax breaks for big businesses. Taxes were something we just paid and never got any benefit from. Sure, there were deductions and refunds but no loop holes no tax breaks for the working guy.
In 2008 when the financial crisis started to affect everyone, the government was bailing out everyone from AIG to General Motors, all the banks were being rescued and companies we never heard about.
The housing market collapsed and unemployment climbed. The stimulus bill which was supposed to help all of us seemed to disappear into the pockets of the few.
Everyone on the streets kept asking where is the help for Main Street, we helped Wall Street, we helped the Banks... when do we get help.
In 2009 and 2010 new laws and programs went into effect. Nothing to help the little guy, unemployment didn't come down, interest rates on credit cards continued to soar. Sure the banks and GM were showing huge profits, but the guy on the streets was farther in debt, barely keeping his head above water waiting for President Obama to do something to help.
With huge credit losses the financial institutions went crying to the government asking for a change in accounting procedures to help with their huge bad debts. The new tax code that came into effect in 2010 offered big tax breaks to the financial institutions to help them with these losses.
A Miracle a Tax Benefit for Main Street
Without knowing it, these new tax codes and accounting changes opened a big tax loophole that benefits the consumer. The banks can take huge write offs on credit card losses and can therefore share these benefits with the credit card holder. Through a process known as Debt Settlement or Debt Negotiation, the credit card issuer can negotiate or reduce the consumer debt and at the same time claim a loss on their taxes making up for some of that loss. This system makes it more attractive for the banks to offer better reductions on credit card debt to get the consumer to pay off these debts.
This process of Debt Settlement usually is handled by an attorney or a Debt Settlement Company, who will develop a repayment plan with the consumer and then enter into negotiations with their creditors reduce the debt as an incentive to pay the debt in full or with an agreed upon payment schedule.
Both parties benefit, the consumer gets a larger reduction of their debt and the creditor gets a larger tax deduction.
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. Check out the following link to locate legitimate debt help in your state.
Personal Credit Card Debt Relief - How Tax Breaks Allow Consumers to Eliminate Credit Card Debt
