During the recession period, a large number of people had lost their jobs. The situation was such that everyone was facing financial emergency. Thus, most of them incurred huge amount of debts in the form of credit card debts, personal loans, payday loans, etc. This had further messed up their lives. Most of them were on the verge of filing bankruptcy in order to get rid of their debts. In such a situation, the Obama government came up with the Stimulus Program which will provide stimulus money to the people in order to give them some relief from their debt problems.
In 2009-2010, the government provided stimulus money for debt relief to those people who had $10,000 or more in unsecured debts. Not only individual borrowers, stimulus money was also given to the financial institutions that were on the verge of collapse due to the recession. The government realized that if all the major financial institutions collapsed, then the economic situation of the country will further deteriorate.
During the recession, both the financial institutions and the government realized the fact that if creditors forced the borrowers to pay the money which they did not have, they will go forward and file bankruptcy. In that case, the creditors will have no other option to get back their dues. However, with the stimulus money and debt relief programs, the borrowers will not be forced to file bankruptcy. Thus, the creditors will also have an option to recover their dues. Mostly, the borrowers were given the option of debt settlement in this case. So, in the meantime, this option of debt relief also became quite popular. The situation is such that even now credit card companies are pro-actively offering debt settlement option to borrowers.
Credit card loans are the most difficult unsecured loans to pay off. The main reason for this is that they have a very high interest rate. Not only that, a borrower who has a credit card debt will also have other debts like home loans, auto loans, personal loans, etc. Thus, he or she will be burdened with a huge debt liability. In adverse situations, these loans become a huge burden. In such a situation, the stimulus money was a great relief to get rid of the unsecured loans.
At that time, those people who had more than $10,000 into debt would speak to the local debt settlement companies in order get help in this regard. A legitimate debt settlement company used to speak to the creditors and the borrowers and try to settle the debts. It had been noted that there were many debt settlement companies who helped the borrowers in eliminating as much as 60% of their unsecured debts.
However, to be successful in debt settlement or any kind of other debt relief option, it is important that you choose the right debt relief company. Not all of them are legitimate. Before you choose the company, search about them online. Speak to other people who have taken help from them and get an idea about the company.
