Where these debts come from? These are created by the consumer themselves because they were the one to make the transactions from the credit cards.
These credit cards debts are unlike the debt card; that only charge the service charges to the money.
These are the loans that a person has for the everyday use and it is usual that the loans have an amount additional as the profit of the bank or the financial institute called as the interest on the debts.
People used to take thousand of dollars of debts from the bank and financial institutes so that they can have a very luxurious life but they become unaware of the situation that they need to return the debts.
At last the situation of the bankruptcy occurs but that is a very risky business because these cases are uncertain regarding their results and what ever the result be they will cause loss to one party either creditor or the debtor.
Therefore why not to share the loss mutually among the creditor and the debtor? That is the reason that the debt settlement program came to the scene; eliminating the chances of bankruptcy.
It works simply by sharing the debt of the debtor with the creditor.
The debtor will be paying only half of the amount of the debt and the interest on the debts will also be decreased to give him a relief.
The payment method of the debt settlement programs is much easier.
When a person applies for the debt settlement the creditor opens an account in the bank on the behalf of the debtor so that it would collect all debt installments.
If the debtor cannot pay the installment then the financial institution refers the case to collection agencies who that take care of the matter.
The creditor is pleased because of the recovery of the amount that he has lent and the debtor enjoys the relief from the debts and the easy payment method.
In about three years usually all the debts of the debtor will be gone and he can enjoy a debt free life without filing for bankruptcy.