The economic stimulus payments received by households in 2008 is intended to increase consumer spending. It was designed to soften the recessionary pressures caused by the credit crunch.
Many consumers, however are using it to catch up on late bills. Debt collectors are finding that many consumers are receiving substantial stimulus payments, which could be used as a lump sum payment to settle an old debt.
Debt collectors have really honed their efforts to collect what debtors receive as a stimulus payment. They know that many families may receive hundreds or even a couple of thousand dollars through the economic stimulus payments.
Savvy debt collectors have long known that effective collection techniques involve tapping every available resource, including encouraging debtors to get loans from families or to sell property. Now they have a new source of potential funds to tap into.
One creditor has even set up a special debt settlement offer for consumers trying to pay off an old balance. Arrow Financial Services LLC has offered to help consumers settle outstanding debts at 80% of the outstanding balance if they qualify. This offer is designed for consumers that might be enrolled in a special plan. The offer has an expiration date of June 5, 2008, and there may be special circumstances that would warrant an extension or a settlement of less than 80%.
Settling on a debt can help save money and avoid legal action. However, consumers should realize that there can be many other consequences of debt settlement that can be very costly. A settlement is often reflected on credit reports to notify other potential lenders that the account was closed with less than the full balance repaid.
Additionally, using a debt settlement company can have many costly fees that offset much of the savings. Even the federal government may want you to pay taxes on forgiven debt! To find out more, discover the pros and cons of debt settlement.
Tags: Debt Settlement, stimulus payment
Arrow Financial Services, LLC is a bottomfeeder junk debt collector. Their “economic stimulus” debt settlement offer is a scam. Please see http://www.budhibbs.com for information on this company. The BBB rates them as UNSATISFACTORY and they have been sued by consumers many times. One consumer they harassed was awarded $100 in a lawsuit against Arrow.
Oops – that consumer was awarded $100,000. Just google this company. The results will flabbergast you.
Dear LT,
Thank you for your comments. As you likely already know, most debt collectors violate federal collection laws periodically. Many do this purposefully, while other violations are accidental.
You will likely find incidences of harassment claims and lawsuits filed with nearly every major debt collector. Given the magnitude of consumer debt that is placed in collections, violations are bound to occur.