Are you suffering from immense unsecured debts? Want to know how debt settlement consumer protection act will mean for you. Well, there is a lot to say about the act. The Federal govt, came up with the act after the US economy faced the problem of recession and a large number of people filed for bankruptcy. This caused a lot of trouble for the creditors. They began to lose their liquidity and lost their financial equilibrium. This created a situation of instability in the economy and the economy went further back into recession. This triggered some serious thoughts for the Federal govt. The govt. needed to make sure that the recession came to a halt. In order to do this, the first thing that was required was to make sure that the event of bankruptcy filing stopped. The govt. introduced bankruptcy laws which made difficult for the consumers to file for bankruptcy. They now needed to qualify for the same.
Along side the new laws, the govt. also pumped in billions of dollars into the economy. This money is known as the stimulus money. The creditors who agreed for debt settlement deals can enjoy this money. They can use the money for salary payments and other organizational costs. Also, the govt. announced tax breaks for the creditors who agree for settlement. This step was taken in order to reduce the tax burden for the creditors and make up for the loss that they incur by agreeing for settlement.
All these can be considered as a part of the debt settlement consumer protection act. This helped the consumers to believe that they can get rid of the unsecured debts that they have without any legal hassles. The consumers who have an overall unsecured debt of $10,000 or more now became more inclined for settlement deals because this not only eliminated a certain percentage of the debt that they have but also at the same time ensured that they don't lose their credit score. Once a consumer and a creditor reaches a settlement deal, the consumer needs to repay the remaining amount of the money to the creditor in one single payment. This is how the debt settlement consumer protection act helped the consumers to get out of debt!
Source by Percy Wilson