Debt settlement consumer protection act has helped the consumers to get back their financial stability. The new laws have rendered the image of a perfectly legal method to debt elimination to the method of settlement. The creditors cannot decline a settlement deal and they are required to wipe out a certain percentage of the debt that you have in case you satisfy the conditions of settlement. Let us read between the lines of this new legislation and find out what the debt settlement consumer protection act to offer..
After the US economy faced the problem of recessions, thousands of people started filing for bankruptcy. This happened because of the fact that they lost their jobs and failed to repay their creditors. As the number of bankruptcy filing increased steadily, the creditors began to take a hit. They lost their liquidity and they failed to cover up their costs. This made the organizations unstable because they lost their financial equilibrium. As this continued to happen, the creditors slowly approached bankruptcy and this caused serious troubles. The economy began to roll back further into recession. The whole cycle was thus once again repeated.
To cure this ailment, the govt. announced tax breaks for the creditors. At the same time, the govt. also released billions of dollars into the economy. This money is known as the stimulus money. The creditors were asked by the govt. to open up for settlement deals. Once the creditors agree for settlement, they will lose a part of their money. This loss incurred by the creditors is covered by the stimulus money that is rolling in the economy. The creditors also enjoyed reduction in the amount of taxes once they agreed for settlement. This became a law and the consumers who have an overall credit due of $10,000 or more are allowed to go for settlement. Because of this new legislation, the consumers enjoyed a reduction in the amount of dues that have and are required to repay only a part of the total debt to the creditor. This is how the debt settlement consumer protection act helps the debtors.
Source by Percy Wilson