© Nogwater
While debt relief programs have relieved a tremendous stress and burden for the debtor, one could wonder why the creditors agree to enter into negotiations rather than use other measures to gain a full return on their loan.
It is really quite simple. If a debtor is forced into bankruptcy due to overwhelming debt and an inability to pay, everybody loses. The creditor typically receives no payment and must write off the loan, and the debtor is burdened with a bad credit record for many years to come. The end result is the economy continues to suffer.
Given the state of the economy, many people who have made payments on their loans religiously, are now finding that they cannot continue to do so. By turning to a debt relief program, they can continue to make payments, but at a negotiated rate that takes into consideration their existing finances and ability to pay. Creditors are happy because they are at least seeing some returns on their investment and they don't have the cost of going to court.