Obama's Debt Relief For Consumers - How Government Tax Breaks Can Help You Eliminate Debt
Coming off one of the worst recessions in US history many consumers find themselves on the verge of bankruptcy and desperately in need of debt relief. There are several debt relief options for consumers due in large part to government tax breaks.
Online, June 16, 2010 (Newswire.com) - The United States and many of our citizens are massively in debt. For nearly two decades, the lending practices of this country were very irresponsible. Now coming off one of the worst recessions in US history many consumers find themselves on the verge of bankruptcy and desperately in need of debt relief. With Wall St. banks and large financial institutions getting bailed out, many Americans are left wondering "Where's Obama's debt relief for consumers".
Consumers are not the only ones feeling the pain. Creditors of unsecured debt are extremely concerned about collecting on their ever increasing delinquent accounts. Credit card companies and other large banks know that if a consumer were to file bankruptcy they would likely receive none of their money back. Knowing this, creditors are resorting to other collection practices. One of these collection practices includes debt settlement.
Debt Settlement or "Debt Negotiation" allows creditors to collect at least a percentage of their unsecured debt back. The average consumer debt settlement in 2009 was negotiated for 50% of the balance. While the debt negotiation process is certainly not perfect, it is a legitimate alternative to avoid bankruptcy and eliminate debt.
So what about Obama's debt relief for consumers? 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 Americans ask about Obama's debt relief plan for consumers they should not be fooled. Obama or the federal government has not directly endorsed debt settlement plans. They have, however, created an economic environment where the debt negotiation process actually makes financial sense for both the consumer and the creditor. Creditors are able to collect a percentage of their unsecured debt back from consumers who are on the verge of bankruptcy, while consumers are able to avoid bankruptcy and still eliminate debt.
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 in unsecured debt to qualify for most Legitimate 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.
If consumers are struggling with paying back credit card debt or any other unsecured debts there is legitimate help out there. Whether it's credit counseling, debt consolidation, debt negotiation, or bankruptcy, it would be wise to speak with a debt relief professional to determine which option makes the most financial sense.
To talk with a legitimate debt relief service for free help check out the following link:
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Tags: credit card debt, debt negotiation, debt settlement, government tax breaks, Obama's debt relief, unsecured debt
