Question

Reducing Debts at Credit Solutions of America

7th Edition pages 339 -343 8th Edition pages 282 - 286

1. In your judgement, should it be illegal for companies to attempt to settle or reduce customers' debts in the way the CSA attempted to do?

Answer 1

It is definitely considered illegal to settle debt of customers who have been engaged incredit default payments specifically who are in huge amounts as they add to non performing assets and eventually lead to write off for many organisations.

This eventually leads to collapse in financial sector as we saw in Great Recession 2009 and similar sort of activity should be held illegal wherein companies write off debts and clear all dues if customers.

As this has serious implications on economic development because of lack of Liquidity and high premium Interest rates which slow down growth in real GDp eventually.