Growth of debt settlement solution market is directly proportional to the scope and size of consumer debt on a global level. As people become unable to pay debts, the availability of debt settlement solutions has become more and more attractive in the global landscape. Growth of this debt settlement solution market has its share of restraints. Legitimate debt settlement solution providers are being tarnished by fraud and abuse rampant throughout the arena.
Many debt settlement solution and service providers are functioning in poorly regulated environments and the lack of enforceable regulations and standards has eroded confidence in debt settlement solutions and services among consumers and regulators. Legislators and debt settlement solution providers are adopting enforceable regulatory standards and seeking apt oversight from regulatory committees to ensure that the market remains relevant during the forecast period and debt settlement solutions and services succeed as efficient options for indebted civilians facing over a longer term.
Impact of Ongoing COVID-19 Pandemic on Debt Settlement Solution Market
The International Monetary Fund (IMF) and the World Bank have called for suspension of repayments of loans owed by some of the poorest nations of the world. This initiative was undertaken to help the nations and their citizens manage the severe impact of COVID-19 pandemic. G20 (Group of Twenty) members agreed to completely or partially suspend debt servicing for a temporary period for more than seventy eligible nations, out of which 30 nations are part of the Commonwealth. In order to help these nations benefit from the moratorium service, the Commonwealth Secretariat issued guidelines and standards pertaining to the use of its debt management system. These guidelines not only maximize benefits of debt relief, but also help create manageable loan repayment schedules.
For instance, Commonwealth Meridian is a web-hosted debt management solution that is being used by a multitude of member nations to manage their debts. The new proposed guidelines are making it easier for eligible nations to navigate debt settlement solutions that are being offered by G20 members and other multilateral authorities as a response to the COVID-19 crisis. These guidelines also help understand different options for restructuring and settling debts, and apply debt relief initiatives to ensure long-term sustainability.
Debt Settlement Solution: Market Dynamics
Debt settlement solutions are a better alternative to consolidated loans, avoiding creditors and bankruptcy for civilians experiencing severe financial hardships. Consumers can enhance their debt-to-income weightage ratio and control the process of clearing debt by using debt settlement solutions to reconcile their debt. Legitimate debt settlement solution and service providers advocate only for their clientele to help them get out and stay out of debt.
Consolidating debt is another alternative to avoid bankruptcy. Consumers pursue the process of consolidating their debt as they prefer paying off existing debts using fixed debt payment plans. However, debt consolidation requires existing assets to be used as collaterals, unlike debt settlement. Debt consolidation requires consumers to transfer debts from unsecured to secured loan that involves repayment of entire debt in fixed installments over a period of several years, with added administrative fees and interest.
There have been reports of consumers procuring debt settlement solutions and services experiencing financial hardships due to life events like job loss, chronic illness or divorce. Such challenges often limit available and disposable cash flow required to pay or service minimum payments, thus making consumers incapable, rather than unwilling, to pay off debts. Though financial hardships stemming from unfortunate and unexpected life events are not contained in a solo income level, consumers in lower-to-middle income levels, and ones who lack collateral are susceptible to dealing with severe debts and are the most in need of debt relief provided by debt settlement solutions and services. Consumers able to fulfill debts may not find debt settlement solutions and service to be that lucrative. Therefore, debt settlement solution providers tend to carefully screen prospects seeking to participate in debt settlement programs.
Debt Settlement Solution Market: Segmentation
The global debt settlement solution market can been segmented on the basis of component and end-user.
With respect to component, the global debt settlement solution market may be segmented into:
With regards to end-user, the global debt settlement solution market may be segmented into the following:
Debt Settlement Solution Market: Competition Landscape
Some of the key players in the global debt settlement solution market are National Debt Relief, Guardian Debt Relief, Accredited Debt Relief, Pacific Debt Inc., Oak View Law Group, CuraDebt, Premier Debt Help, Freedom Debt Relief, and New Era Debt Solutions, among others.
Following are some key strategies incorporated by companies operating in the global debt settlement solution market:
The Debt Settlement Solution market report is a compilation of first-hand information, qualitative and quantitative assessment by industry analysts, and inputs from industry experts and industry participants across the value chain. The report provides in-depth analysis of parent market trends, macro-economic indicators, and governing factors, along with market attractiveness as per segment. The market report also maps the qualitative impact of various market factors on market segments and geographies.
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Regional analysis includes: