Consumer Debt Relief - How Stimulus Money Has Made Debt Relief Available

Assessing the current recession and the threat faced by financial institutions, the federal government came up with the idea of stimulus money. This money was given to financial institutions in order to save them from immediate ruin. These financial companies were facing bankruptcy because a large number of debtors were unable to repay their loans. If the creditors forced them to repay the loans, the debtors were forced to file for bankruptcy and the creditors had no way of recovering their money. But with the relief received in the form of stimulus money, the creditors abandoned their aggressive recovery tactics. They instead tried to save the debtors from bankruptcy and offered huge relief in the form of debt settlements.

The debtors could negotiate with the creditors who decreased the total amount payable to a much lesser amount than that which was originally payable. The debtors had the choice to repay this amount as a lump sum or in installments. Using loan consolidation, they could repay various small high interest loans with a single low interest loan. The debtors also had the option of converting the unsecured loans into secured ones. Secured loans usually have a much lower interest rate than unsecured loans. In this way the debts became affordable for the debtors and they could become debt free over a reasonable period of time.

Even the debtors who did not qualify for debt settlement had options like moratorium, debt consolidation; conversion of unsecured loans to secured ones etc. The common debtors took advantage of the popularity of debt settlement programs and the generosity of the creditors. Even those debtors who were not really faced with dire financial situations opted for debt settlements. Although these settlements affect the debtor's credit scores to an extent, they at least ease the stress of huge loans in these uncertain times.

It would be wise to not go directly to a debt settlement company but rather first visit a debt relief network. The top debt relief networks only allow debt settlement companies into their accredited organizations that prove a track record of successfully negotiating debts and have also been certified. They are free to use and offer helpful debt relief advice.

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