The Ministry of Healthcare has formulated and launched a set of debt relief plans for the public. Though these are in the initial stage these are very helpful for the consumers who already have taken on a few debts in their name or the ones who are contemplating taking on a few. Whether you take on a personal loan or a student loan these relief programs will help you in a great way if you are finding it difficult to keep up with your debt repayment schedule. Governments earmark a significant amount in their annual budget to provide such relief to their tax payers for this purpose.

The most interesting fact about these debt relief programs is that you can also use it for your health or medical debts as well. Several private and public hospitals along with health care facilities have signed up with these relief schemes issued by the government so that it helps both the patients to make their payments easily and them to get their amount due.

Rise in awareness and the different stages

Most consumers now opt for such debt relief programs when they want to find an easy alternative to get rid of their debts. The gain in popularity of these debt relief plans is primarily due to the increased awareness among the consumers about the pros and cons of debt settlements which was till date the first choice of most of the consumers.

Over time however and after checking through the several honest and accurate debt consolidation reviews consumers have found that it is even better to continue paying their debts in a low monthly payment rather than reducing the debt amount as well as their credit score.

If you too are thinking of trying out a specific type of debt relief there are a few specific facts and points that you should know and consider. These are:

• These debt relief plans have three different stages but it is important according to the law that the older debts are first in line to be repaid.
• If you want to avail such a debt relief and join a particular scheme you will need to qualify for it and fulfill the set requirements and series of obligations.
• It is also required that you meet a recovery plan to make your effort successful as well as set up proper supervisory bodies.

These supervisory bodies usually oversee the entire process and if it is found that any organization is not abiding by set of rules as per the agreement, they will face penalties which may also include cancellation of sanctions.

The law also requires that the debt relief is completed in a year and also requires the creditors to verify their claims.

The criticism regarding it

There is no reason to believe that the debt relief plans are well accepted in the industry and beyond. On the contrary and just as any other government rule that is passed there are a lot of criticisms for the debt reliefs as well. Especially, the criticisms come most from the social insurance company though the creditors are not far behind.

They seem to have been hit hard by these new laws regarding debt collection, money lending and debt relief programs all of which are primarily formulated with the intent to relive the stress of the debtors and chances of being victimized by the creditors.

However, the creditors and insurance companies find these schemes discriminatory and a few major organizations have even gone a step further to complain against these plans to the Constitutional Court. However, their complaints cannot be overlooked downright as they do have a few fair points for dissent such as:

• The huge amount that must be provided by then to join such debt settlement plans
• The coverage of the maturity chain of receivables and the compromising factors.

The only point that may provide the creditors some respite is that it is a voluntary decision to join and these debt relief options do not classify anybody.

• Adding fuel to the fire, there are even a few critics who take the side of the creditors and insurance companies and support their view. These critics say that the debt relief plans send a wrong signal typically to these organizations.
• They also say that at the same time demotivate them in their work because they cannot manage their portfolio as well as their business responsibly.
• Lastly, they are also against the strictness of the fact that one will lose the sanctions if they break the rules.

Federal debt settlement laws

Just as the debt relief schemes are governed by specific laws of the government to allow the consumers to get more accessible and easy reliefs, there are also specific rules to protect them from any unfair practice during collection of debts.

The Telemarketing Sales Rule or TSR is the most significant federal law enforced by the Federal Trade Commission. It was originally passed in 1995 with several amendments over time.

The most significant of all was passed in 2010 which states how the debt settlement companies must operate. This is most significant because it imposed a ban on advance fees and specifies that fees cannot be collected until:

• The company successfully negotiates, reduces, or changes the terms of at least one debt of the consumer
• There is any written agreement for settlement or debt management plan between the creditor and the consumer
• The consumer agrees to such an agreement and
• The consumer makes at least one payment to the creditor after the agreement is negotiated by the debt settlement company.

There is also a Fair Debt Collection Practices Act or FDCPA that governs the third party debt collectors and attorneys and not your creditors directly. According to the law a debt collector can:

• Contact a friend or family member but cannot reveal that it is for collecting debt
• Contact you only between 8 a.m. and 9 p.m. unless you permit them to call at other time
• Not make any false statements, threaten or harass you and
• Not call you if you ask not to.

This law however applies to personal debts and not business debts.