Bankruptcy is the legal way to eliminate your unpaid loans and this is a traditional way adopted by many people in the previous years. Few years back the process of declaring bankruptcy was so simple and easy and many people thought it was very easy and declared bankruptcy to eliminate their debts at once.
The bankruptcy was a total loss for the financial institutions and the institutions are a part of the country’s economy. This is the pillar of our economy and people do not care about thins thing. Initially they take loans on their own; after using bank money they declare themselves bankrupt and do not pay any money back to banks. Banks do not call people to come and take loans, people come themselves to get loans and the bank does not know the inner financial conditions of the consumer.
Keeping this bankruptcy in view, the government in 2005 amended laws of bankruptcy. According to the new laws the process becomes difficult and certain tests were introduced before it gets approved.
When the bankruptcy became difficult to be adopted then people started searching some other legitimate legal ways to get out of their credit card debts. After a long search and struggle one thing became more popular and effective and that is debt settlement programs.
By going through debt settlement processes, it is not difficult to eliminate debts in installments or lump sum and get reduction over outstanding amounts. Debt settlement is a process of negotiation which is