Did you receive even a single cent from the stimulus money offered by the administration? If you are just an individual or a small business, chances are that are you would not have received even a single dollar. The bulk of the funds have been allotted to lenders and financial institutions.

Of course, they were in desperate need of the same. Collapse of these financial institutions would have spelt doom for the American economy. However, this does not mean you do not stand to gain anything from the federal stimulus money.

The presence of these funds in the market is the primary reason why lenders are offering generous settlements. What exactly does one mean by settlement of debts? This means that your debts shall be waived to and the debt remaining will range from around 30 - 50 % of the original amount owed. What will you have to do in return? Nothing! Lenders are going to bear the loss with the assistance provided by the Federal government.

Lenders save a lot on tax as well due to their high losses. Further, the accounting principles of lenders invariable involve writing off of such risky debts. Hence, recover of even 30% of the debt from written off loans will be presented as profits. The losses are not affecting the financial stability of the firms as the government is backing them and is ensuring they have access to cheap funds.

Apart from debt settlements, other options like debt consolidation and even repayment moratorium have become popular. This does not mean that lenders have changed the way they think and work. This is only the stimulus money talking. The approach has changed primarily because people were declaring bankruptcy in masses and were trying to escape their debts. The government worked through the lenders and prevented another round of bankruptcies from damaging the US economy.

At the end of the day, remove the stimulus funds from the equation and you will see a country where lenders and borrowers both would have gone bankrupt. The funds saved the lenders directly and saved borrowers indirectly in the form of cheap debt settlements.