Debt settlement consumer protection act has many benefits for the individuals. After the Federal economy was hit by the one of the biggest recessions, thousands of people became jobless in no matter of time. Many people had to go through great financial crisis. They were not able to repay their debts and became defaulters. They were eventually forced to file for bankruptcy and had to compromise with their high credit scores. Once they lost their credibility, they failed to get any good deals from the future lenders for the next 7 – 10 years that followed.
Debt Settlement Consumer Protection Act
On the other hand, the creditors also took the hit of the recession. As the number of people of people filing for bankruptcy was increasing alarmingly, the creditors lost their liquidity and they failed to manage their costs. The financial equilibrium was disbalanced and almost reached the verge of bankruptcy. The economy took the biggest hit of all times and rolled further back into recession. The federal government had to take immediate steps to curb this situation.
As a part of the debt settlement consumer protection act, the government introduced tax breaks for the creditors and also released billions of US dollars into the economy. It was made public that those creditors who will agree for settlement with the consumers will get huge discount in taxes and can use the stimulus money released in the market to cover up the costs and the loss that they incur.
As a result of these changes in the laws, many creditors offered debt settlement deals and wiped out a certain percentage of the debts of the consumers. They had to incur loss but that was later covered by the government policies of tax breaks and stimulus cash.
Debt
Consumers on the other hand, were able to reduce their debts by a great margin through debt relief options. The only condition that they had to fulfill was to have an overall consolidated loan of $10,000 or more. Anything less than that is not entertained for settlement. Once a good deal is offered to the debtor, they need to pay the remaining amount of the debt to the creditor in one single payment. In this way, many consumers were benefitted by the debt settlement consumer protection act.
People having significant amount of unsecured debt more than $10,000 can try the debt settlement option as a legitimate way of eliminating their debts. You can talk with a trained debt counselor and gain more knowledge in this regard. The debt counselor will point you in the right direction as per your situation.
Helpful Articles:
http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=3276&ChapterID=24
http://www.schumer.senate.gov/record.cfm?id=324295
http://www.sse.gov.on.ca/mcs/en/pages/alert_debt_settlement.aspx
