Why Debt Settlement Programs Are Better Than Filing Bankruptcy

Today, debt has become the forbidden truth

Today, debt has become the forbidden truth. We suffer from indebtedness and this is the new social stigma that has us all worried for our livelihood. Credit card debts are categorized as unsecured debts which have extremely high interest rates attached to them.

This makes it even more difficult to eliminate the debt. But unfortunately, when debtors' accounts turn into defaulting accounts, then, credit card companies also face deficit in liquidity. Consequently more and more choose to declare bankruptcy. But this choice goes unfavorably for both the creditors and debtors. This is because the creditors get nothing in the process in the form of recovery money. While debtors also loose market rating which pushes them further to losses in business and weakened capacity to pay bills. The poor state of financial affairs poses badly for the country's economy too.

As result, to save the country from further damages to its economy in these testing times of recession, the Government has come up with stimulus money in the market presented to save all money lending organizations. When these companies get surplus money they are in a position to carry forward this gift to their debtors too in the form of debt settlement. The situation leads to help both debtors and creditors as they jointly come up with a reduced amount which can be paid as recovery amount. The credit card companies feel that at least they end up getting something if not the full amount. While debtors go scot free with lesser amounts. They have the satisfaction of eliminating their debts which seemed impossible till now. Most of the settlements passed are generally for cases where debtors are actually on the verge of going bankrupt, anyway.

Debtors need to keep an account of settlement procedure in the written form. This way they can rule out any chances of the creditors going back on their words after receiving money from them. Like for example, while asking the creditor for lowering the outstanding amount, debtors can do so by giving the request in the form of credit card debt settlement letter. This method of credit card pay off saves the day and prevents bankruptcy filing as an option for debt relief.

Why Debt Settlement Programs Are Better Than Filing Bankruptcy

By: Burgess Arnold

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