Settlement Market

Laws are made to protect the rights of everyone. This is how a balance in a society is maintained. A law which helps one party while putting the other in jeopardy makes it an imbalanced law. Same is true with the bankruptcy laws. Previously the law supported the debtor which in many cases if not proven a fraud would end up with the creditor losing. The amendments in chapters 7 and 13 of the bankruptcy code have brought about changes as to how things will be interpreted in the future. This is how new bankruptcy laws has led to a massive debt settlement market.

The changing economic situations in USA led to the revision of the bankruptcy code. Many people got away from paying even a single cent to their creditors and got to keep their assets as well. The current wave of economic entrenchment raised the concerns for the safety of the financial institutions as people suffered losses due to recession and in return they simply filed insolvency. This completely shifted the financial burden on to the banks while the debtor walked away clean to get a fresh start.

The changes in the code now clearly mentions that no matter if you file a bankruptcy under chapter 7, 11 or 13, you will be liable to pay at least some part of the debt to your creditors with an exception of a few rare circumstances. The amendment also has a clause that you might be declared bankrupt and still be made to pay the entire amount even after all your assets are liquidated.

This is how new bankruptcy laws has led to a massive debt settlement market. People have realized that getting a poor credit rating for filing insolvency and still having to pay the debt is a cost too high to pay. On the other hand it is very convenient to get a debt settlement. Those who play it right get huge reductions in their accumulated credit card bills and also get to save their credit score from a major damage. This step is also favorable for the banks as the processing time for a settlement is shorter in comparison to a bankruptcy case and they do get something to continue business as usual. With mass awareness and better information masses are turning towards debt settlements to get financial freedom.