subject: Debt Relief And Stimulus Money - How Debt Relief Has Finally Reached Main Street [print this page] It can safely be said that the current recession has helped in debt relief reaching the common man. Earlier if a debtor was unable to repay a loan, the creditors used aggressive tactics to recover their money. If the debtors were really in a difficult financial situation, the only alternative left to them was bankruptcy. But bankruptcy was detrimental to both the debtors and the creditors. The debtor's credit scores were ruined almost irreparably and all his assets were liquidated to repay at least some of the loans. In this case the creditors like credit card companies, who provided unsecured loans, lost all their money.
In the current recession, unemployment, salary cuts and lay offs are rampant. Due to this many debtors are really unable to repay their loans. If a large number of debtors file for bankruptcy, the creditors too will lose large amounts. This may drive the credit providers to bankruptcy. The federal government realized that if this happened, the finance industry would collapse completely. Other industries and the nation's economy would be adversely affected by this. Hence the government came up with the idea of stimulus money to bail out the financial institutions. Once the stimulus money saved them from immediate ruin, the creditors decided to pass on this benefit to the debtors.
The creditors assessed the debtor's actual paying capacity and negotiated the payable amount accordingly. In this way the debtor was saved from bankruptcy and the creditors could recover at least some of their money. This was done in such a way as to cause minimum damage to the debtor's credit scores. The debtors who did not qualify for settlement were given the options of moratorium, consolidation and conversion of unsecured loans to secured ones. Hence stimulus money made debt settlement popular amongst both the debtors and creditors.
It would be wise to not go directly to a debt settlement company but rather first visit a debt relief network. The top debt relief networks only allow debt settlement companies into their accredited organizations that prove a track record of successfully negotiating debts. They are free to use and offer helpful debt relief advice.
