Credit cards have become an indispensable part of an average global citizen.
It ensures that the credit card holder has transacting power at all times.
At times people get carried away and spend more than what they can afford.
With the sudden onset of recession these credit card holders have found it impossible to pay back their credit card dues.
They are constantly haunted by the collection agencies giving them endless calls, reminding them of how much they owe the credit companies.
Being under financial pressure for a long time finally drives the debtor to consider bankruptcy.
Bankruptcy is in fact just a temporary solution to the massive problem that he is facing.
It is a legal process in which the debtor gets to eliminate his debts by selling off his assets.
Bankruptcy causes a debtors' credit points to hit an all time low.
This will affect his credibility among his peers, especially if he is into business.
He will not be able to avail any kind of financial help from any financial institutions for at least over a decade.
On the other hand when a debtor opts for a Debt Settlement program the debtor can be ensured that all his debts will be sorted out in the next couple of years.
A debt relief agency will work towards bringing down the amount payable by the debtor to almost 50 -70 % of the actual amount.
The debtors credit points will not be drastically effected and can easily apply for further loans once he finishes paying up all his dues.
A person who has $10,000 or more as debts can opt for debt settlement programs.
These agencies will take an assessment of the debtors income and fixed expenses.
The debtor will be counseled on how to live out of his pocket rather than to depend on credit cards for all his personal expenses.