Debt Settlement Offers Consumers ‘The Most Immediate Form of Debt Relief Available’
New Study Finds Debt Settlement Offers Consumers ‘The Most Immediate Form of Debt Relief Available Today’
This is a highlighted version of an article posted by PRWeb. The entire article is linked below.
(Vocus/PRWEB ) September 23, 2009 — A new academic white paper released today finds that the debt resolution practice known as ‘debt settlement’ offers “the most immediate form of debt relief available to consumers in today’s tenuous economy,” and may even improve the odds for a sustainable economic recovery.
Written by Dr. Bernard Weinstein of Southern Methodist University and Dr. Terry Clower of the University of North Texas, “Debt Settlement: Fulfilling the Need for an Economic Middle Ground” is the second study of its kind released in recent months documenting the consumer benefits of debt settlement, a form of debt relief that offers financially struggling consumers an alternative to filing for bankruptcy.
This paper does that in a way that should assist legislators and regulators at both the state and federal levels. It is the most immediate form of debt relief available to consumers in today’s tenuous economy
Debt Settlement: Fulfilling the Need for an Economic Middle Ground
The United States Organizations of Bankruptcy Alternatives, a leading trade association that promotes the availability of debt resolution options for consumers, sponsored this new study and plans to make it available to the public and to policy makers (USOBA).
Other key findings in the Weinstein/Clower paper include:
- The main advantage of debt settlement over other alternatives is that consumers can satisfy outstanding obligations while paying less than the full amount of their unpaid balances.
- Since debt settlement companies are labor intensive and incur substantial ongoing costs while helping clients through the payoff process, restrictions on the imposition or collection of fees could drive legitimate firms out of business.
- Debt settlement companies can help correct some of the nation’s financial imbalances, improve access to credit, and thereby contribute to the process of economic recovery.
- Debt settlement companies can help consumers avoid a bankruptcy filing, which can impair credit scores for many years. And unlike bankruptcy, the consumer does not have to turn over all of the household’s nonexempt assets to a bankruptcy trustee.
- Creditors who work with debt settlement companies find that their liquidation rates improve while their overall expenses to work accounts decline.
- As with credit counseling, debt consolidation does not reduce the total amount outstanding. A consolidation loan probably isn’t a viable option for most households with high levels of difficult-to-service debt obligations because these consumers lack a decent credit rating for home equity loan access. ($10,000 in consumer debt is a good minimum amount.)
- Debt settlement can be viewed as part of the healing process to get distressed U.S. households back on a sound financial footing and thereby improve the odds for a sustainable economic recovery in the years ahead.
Read it here
