The credit card debt is an unsecured credit; you did not guarantee it with any kind of asset, which means that your financial obligation is not collateralized by a lien on some types of assets of the debtor in the case of a liquidation or bankruptcy.
In other words, if you file for bankruptcy, the bank loses all the money you could have paid them if you either paid them all of the debt on time or just a fragment of the initial debt established through a debt settlement.
In the chaotic recession context, more and more people get lower wages or even loose their jobs.
Therefore, the credit card companies have learned to lower their expectations and reduce their funds drastically.
Despite receiving governmental stimulus money that prevented many of this kind of companies from total collapse, the financial situation of these credit card companies is not way easier.
If you are drowning in bills and have lost hope to ever pay them all, you can take advantage of one of the programs offered to you by the settlement companies.
For a certain fee, usually a percentage of what they help you save, these companies can perform some services for you.
The most popular one is the debt negotiation, also known as the debt settlement.
There are several steps you need to follow when considering a settlement: If, from various reasons like lack of experience or information you cannot negotiate directly with the credit card company, you must contact a liaison - the settlement company.
Then you must start saving up money and deposit it into a settlement fund.
The settlement company will negotiate with the credit card firm to lower your debt, sometimes with 50-60% of what you initially owed them.
Once the deal is made, you will transfer the money saved to your creditor and the debt will be paid off completely.