Debt Relief Bailouts - How Consumers Are Getting Bailed Out Of Paying Unsecured Debt
Online, May 26, 2010 (Newswire.com) - New bankruptcy laws passed in 2005, which made bankruptcy more difficult to qualify for, have led to a rapidly growing debt settlement industry. Many refer to debt settlement as a bailout due to the fact that consumers are able to eliminate a significant portion of their debt balances. Debt settlement is an aggressive debt relief option and should only be considered by consumers that are experiencing a legitimate financial hardship and have at least $10k in unsecured debt. It is not intended for individuals simply looking to get bailed out of their unsecured debts.
Debt settlement is a debt relief option that lets consumers make a deal with their creditors to pay back less than they actually owe. Debt settlement has become more popular over the past couple years in large part due to the "bailout" attitude set in place by the federal government. If these large financial institutions are being bailed out then many consumers believe they can too. While debt settlement is not technically a bailout and definitely not sponsored by the government, it is a legitimate way for consumers going through a financial hardship to eliminate some of their unsecured debts. In 2009 the debt settlement industry was responsible for settling over $1 billion in unsecured debts saving debt ridden consumers nearly $600 million.
Getting bailed out of paying back unsecured debt through debt settlement does not come without consequence. Consumers will experience an increase in collection calls and also a drop in their credit score. Debt settlement programs typically last between 2-4 years at which time the consumer will not be making payments to their creditors but rather paying into a savings account until it builds up to an agreeable settlement amount. The average debt settlement is negotiated for 50% of the balance so if a consumer had $50,000 in unsecured debt they would save up funds until they had around $25,000 and then attempt to settle the debt.
The most important thing is to know how to locate legitimate debt settlement companies and avoid those which really don't have your best interest in mind. To find legitimate debt settlement companies it would be wise to visit a debt relief network . There, consumers will be able to locate the best debt settlement companies in the country and also receive a free debt consultation to determine what the best debt relief option is. These networks are free to use and have helped thousands of consumers avoid being ripped off.
To locate the top performing debt settlement companies in your area for free debt relief advice check out the following link:
