Getting Out Of Debt - How The Obama Administration Is Helping Consumers Get Out Of Debt
Online, July 7, 2010 (Newswire.com) - There has been a lot of talk lately about Obama's debt relief program and how consumers can take advantage of this for getting out of debt. Online advertisers and debt relief companies have capitalized on this notion of the government debt relief bailouts however this concept is kind of misleading. The government is not sponsoring any debt relief program for consumers. However, they have enacted several policies and bills that make getting out of debt much easier.
The biggest debt relief help that is provided by the government is in the form of tax breaks. Creditors of unsecured debt don't agree to debt settlements because they are nice guys. All of the debt that creditors eliminate is compensated for in terms of government tax breaks. These government tax breaks encourage creditors to make debt settlement deals and with the massive amount of people currently in debt many think debt settlement filings will outpace bankruptcy in 2010.
When a consumer is unable to pay their unsecured debts it is in the creditor's best interest to settle the debt and recoup at least a percentage of their money. If the consumer were to declare bankruptcy the creditor would likely receive nothing. Knowing this, as well as the fact that there are more consumers on the verge of bankruptcy than ever before , creditors of unsecured debt are having no choice but to partake in debt settlement negotiations.
Debt settlement companies settled over $1 billion in unsecured debts in 2009 alone. This resulted in approximately $400 million being collected for creditors and $600 million being eliminated off the books for debt ridden consumers. Debt settlement negotiators are basically the middle men that try to find a common ground between the creditor and the debtor. Consumers are able to get rid of some of their unsecured debts while creditors are able to collect delinquent funds that they most likely would have never collected had it not been for the debt settlement process.
Debt Settlement is an aggressive debt relief tactic and does not make sense for everyone in debt. Consumers must be experiencing a legitimate financial hardship and have at least $10,000 to qualify for most debt negotiation programs. While government tax breaks are not the only part of Obama's debt relief plan for consumers, they have allowed creditors to be more flexible with their debtors.
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 relief companies in your area for free debt relief advice check out the following link:
