Experts criticize and deride the hype surrounding debt settlements.
They often point out that debt settlements were popular even before the current recession took place.
If not very popular, at least debt settlements were not completely unknown.
There is no denying that settlement existed even before the recession occurred and the Federal stimulus money was pumped into the economy.
However, instances of settlement of debt were too few and too far between to make any impact on the debt problems of ordinary individuals.
There was a time when borrowers were scared of approaching lenders for assistance.
Borrowers tried to hide their financial problems to ensure lenders did not take advantage of the information.
When any borrower approached credit card issuer for debt settlement in the past, the issuers retaliated by taking legal action.
The lenders realized that the request for settlement is proof of financial irresponsibility.
They took action to recover their money knowing that the borrowers will have to suffer.
Today, if you walk into your creditor's office and seek a settlement, chances are high that you would be offered a seat and requested to explain your problem.
If you satisfy your creditors, you would be offered a waiver that ranges from thirty to seventy percent of the original amount owed.
What has brought about this change? The stimulus money pumped in the economy is the primary reason why this change has occurred.
The government has influenced credit card issuers to go slow on their aggressive tactics.
The lenders too have realized that their attempt to retain customers for as long as possible to earn maximum interest was not working.
It only pushed people towards bankruptcy.
This is the reason why numerous financial institutions collapsed in 2008.
With the Federal money still in the economy, nobody wants to antagonize the administration.
The lenders quickly realized the direction in which the wind was flowing and decided to pass the benefits they received from the Federal stimulus to ordinary customers.
This has been done in the form of generous settlements.
This process shall continue for as long as the recession continues.
Once the recovery starts, the stimulus money will be withdrawn and settlements too will disappear.
They often point out that debt settlements were popular even before the current recession took place.
If not very popular, at least debt settlements were not completely unknown.
There is no denying that settlement existed even before the recession occurred and the Federal stimulus money was pumped into the economy.
However, instances of settlement of debt were too few and too far between to make any impact on the debt problems of ordinary individuals.
There was a time when borrowers were scared of approaching lenders for assistance.
Borrowers tried to hide their financial problems to ensure lenders did not take advantage of the information.
When any borrower approached credit card issuer for debt settlement in the past, the issuers retaliated by taking legal action.
The lenders realized that the request for settlement is proof of financial irresponsibility.
They took action to recover their money knowing that the borrowers will have to suffer.
Today, if you walk into your creditor's office and seek a settlement, chances are high that you would be offered a seat and requested to explain your problem.
If you satisfy your creditors, you would be offered a waiver that ranges from thirty to seventy percent of the original amount owed.
What has brought about this change? The stimulus money pumped in the economy is the primary reason why this change has occurred.
The government has influenced credit card issuers to go slow on their aggressive tactics.
The lenders too have realized that their attempt to retain customers for as long as possible to earn maximum interest was not working.
It only pushed people towards bankruptcy.
This is the reason why numerous financial institutions collapsed in 2008.
With the Federal money still in the economy, nobody wants to antagonize the administration.
The lenders quickly realized the direction in which the wind was flowing and decided to pass the benefits they received from the Federal stimulus to ordinary customers.
This has been done in the form of generous settlements.
This process shall continue for as long as the recession continues.
Once the recovery starts, the stimulus money will be withdrawn and settlements too will disappear.
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