As the economic recession hit the global economy, the financial system all over the world trembled. Thousands of people lost their jobs in United States alone. With no source of income for people to survive; many of them started filing bankruptcy as they were unable to pay off their debts. However filing bankruptcy is never a right decision. You should approach you debt settlement companies who can help you to negotiate your debts for a lesser amount.
Debt settlement is best alternative for people thinking about filing bankruptcy. Nowadays even creditors prefer debt settlement over bankruptcy. Debt negotiation is beneficial for both debtor and creditor. Depending upon various conditions the borrower can get 50 percent or more deducted from his loan. The following are the major reasons why creditors prefer debt settlement:
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1. Something is better than nothing:
In case of debt settlement the creditor at least gets back a part of money owed by the debtor. If debtor would have filled a bankruptcy then the creditor would have got nothing.
Even if the creditor sue the debtor, the legal battle could last for years and requires huge amount of money for paying lawyer and other legal formalities.
2. Financial packages provided by the government:
The United States government injected millions of dollars into the US economy to stabilize the trembling financial system. Many of these banks and financial organizations were bailed out by the US administration via giving them millions of dollars in grant. The financial institutes were made to negotiate its debts with various clients in exchange of these financial packages.
3. Tax refunds:
Negotiating debts with various clients is quite beneficial for creditors. The following are few of the benefits which they get for debt settlement:
• Financial organizations and banks gets tax relaxations from the US government in lieu of debt settlement with those people whose debt exceeds $10,000.
• The amount of debt which is deducted from the debtors amount is received back from the government is face of various subsides provided to these financial organizations and banks.
4. Flow of market is maintained:
Debt settlement is quite beneficial and helpful to control the flow of money in the market. In case of bankruptcy the debtor is no longer eligible for future loans which minimize the chances of various banks to find future clients. Through debt settlement cash flow in the economy can be increased and help fight recession.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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