Debt Settlement Consumer Protection Act - What Does it Mean For Me?
Debt settlement consumer protection act means a lot for every consumer in America who is burdened with unsecured debts. This means that if you have unsecured debts and if you are an American citizen, the debt settlement consumer protection act will make sense to you. But how? What exactly happens because of this act? Let us find out!
After the US economy went into recession, the consumers, the creditors and the economy as a whole suffered. Thousands of people lost their jobs and they found it difficult to repay their debts. As a result, they became defaulters and finally filed for bankruptcy. Once the consumers successfully filed for bankruptcy, the creditors lost their liquidity and they failed to manage their costs. It is because of this reason that the creditors lost their financial equilibrium and they will eventually reach the verge of bankruptcy. This forced the economy to roll further back into recession. This is a critical situation and to cure this ailment, the Federal govt. announced tax breaks for the creditors and alongside this, the govt. also released billions of dollars into the economy. It announced that the creditors who agree for settlement deals will enjoy a reduction in the taxes and can use the stimulus money released into the market to make up for the loss that the creditors bear.
It is because of this reason that the creditors opened up for the debt settlement deals. The loss that they bear because of the money that they lose due to settlement is covered by the govt. policies. The consumers began to benefit from this. Those who have an overall credit debt of $10,000 or more can get settlement and elimination of the debt by a certain percentage. The consumers are then required to repay the remaining amount of the money to the creditor in one single payment. Once they pay off this balance, they become debt free. This is what debt settlement consumer protection act will mean for you!
