subject: How Obama's Government stimulus money Helps Consumers Bargain Debt settlement services [print this page]
The credit card debt since has no collateral attached to it is unsecured in nature and hence attracts high interest rate. A consumer reeling under difficult financial circumstances is unable to keep up with the payment timelines. The credit card debt in turn attracts penalty charges, late payment charges; thereby increasing the total outstanding amount due to the creditor. The creditors in an effort to recover their money started pressurizing the debtors. With no means to repay this outstanding and unable to manage the pressure on their financial condition, the debtors started looking for an alternative and that was filing for bankruptcy.
If a large number of people file for bankruptcy, the lending institutions themselves would get into solvency problems because the money that they had given out to the creditors are not able to pay them back. One of the sources of income of these lenders is the interest on this credit and of course the principal amount. However, the default on the payment poses a threat to their existence itself which actually happened to a lot of creditors.
To overcome the situation where the creditors themselves were being forced into bankruptcy which has a cascading negative impact on the economy, the Obama government came up with the stimulus money of $775 billion to begin with. A part of this stimulus money is used to help the people with credit card debt. The government's stimulus money allows any of the debtors with an outstanding of $10,000 or more to apply for credit card debt settlement. With the help of this program, the debtors can reduce their outstanding almost by half and the rest of the amount can be paid to the financial institution as one lump sum or in equated monthly installments (EMI) over a certain stipulated period.
This stimulus is definitely a win-win situation to all where the creditors are able to recoup a percentage of their money and debtor is able to pay off his debt and becomes debt free.
How Obama's Government stimulus money Helps Consumers Bargain Debt settlement services
