Every industry has faced a down slide due to the recession.
The debt settlement industry is the only one which has seen a boom.
This sudden popularity of debt settlement programs and companies has been caused by the stimulus money poured into the market by the federal government.
Debt settlement programs are equally popular with debtors and creditors.
This is because the creditors realize that if a debtor is forced to pay the money which he or she does not have, he/she will be forced to file for bankruptcy.
This situation will be very detrimental, especially to the lenders who provide unsecured loans like credit card companies.
Due to the fact that credit card loans are unsecured loans, there is no collateral attached to them.
If a debtor files for bankruptcy, there is no way for the credit card companies to recover their money.
Moreover, it is the strategy of most credit card companies to recover their money in the first few installments by charging very high interest rates.
Due to this fact they are even more flexible during a negotiation and settlement procedure.
The debtors with huge credit card loans can settle the debts themselves or hire a settlement company.
The card companies assess the current financial situation of the debtors and their actual paying capacity.
They then reach a settlement amount which is usually much lower than the original payable amount.
They even waive off the non payment and late payment charges.
Moreover, the debtor has the choice to pay off the settlement amount as a lump sum or in installments.
Debtors can also opt for debt consolidation and pay off various high interest loans with a single low interest one.
They can convert the unsecured loans into secured ones.
In this way the debtors can use the recession to become debt free.