Finance Roll

A number of consumer protection laws regarding debt has been introduced by the Federal government to help the consumers to get out of debt. These laws have proved to be fruitful and they have helped thousands of consumers to get out of debt. So, if you want to know how you may benefit from new financial laws, you need to keep reading...

After the recession, thousands of people lost their jobs and they failed to repay their debts. They became defaulters and this led to a condition where they started filing for bankruptcy. Once the consumers file for bankruptcy, they lose their credit score and they fail to get any further credit from the creditors for the coming 7-10 years because the report of bankruptcy filing continues to show up the credit history for that time frame. This actually happened and the creditors also began to suffer. They lost their liquidity and failed to cover their costs. They became financially unstable and eventually they moved towards bankruptcy. This made the economy unstable and it rolled further back into recession and the whole cycle started all over again. The consumers suffered a lot. To stop this, the Federal government designed new financial laws according to which the consumers required to go for credit counseling sessions with the counselor appointed by law if they wished to opt for bankruptcy. The consumers now were required to qualify for bankruptcy and therefore people started moving away from this option. This happened because the success rate of bankruptcy filing fell because most of the consumers failed to qualify.

On the other hand, the government wanted people to get out of debt and thereby announced that the creditors who agree for debt settlement deals will be allowed to have tax relief and they will be allowed to use stimulus money (released in the market by the government) to cover up the costs that they have. The creditors when open up for settlement, they lose their money and the profit earnings but the government aid helped them and they readily opened up for settlement deals. The consumers started gaining from this and they managed to get out of their debts easily with the help of settlement deals. This is how you benefit from the new financial laws.