The recent economic crisis has brought negative results not only for debtors but also for creditors. Due to recent financial instability, those financial institutions which were considered as financially sound and prudent compelled to declare themselves as bankrupt.
Before this financial instability, debtors were incurring massive unsecured debts because at that time, they were getting lucrative salaries and their small business was producing handsome profits. Due to such progress, they started to live a luxurious life on the basis of debts. They incurred massive debts by hoping that financial prosperity would continue for a long time and they will easily discharge their unsecured liabilities.
Unfortunately, their assumptions and hopes didn't realize and they had to face negative consequences of the recent financial turmoil. They lost their lucrative jobs, incurred massive losses in business and became helpless to repay their debts.
Due to nonpayment of their dues, they are being harassed and threatened by their lenders for the repayment of their liabilities. They must know that their problem of repayments could be turn in their strengths. Yes, they can use their weakness as their strength. Let me explain this.
Everyone knows that the recent financial instability has resulted in increased bankruptcy rate not only on corporate scale but also on consumer scale. Consumers' bankruptcy is directly related to corporate bankruptcy. If a large number of consumers become bankrupted then the corporations or lenders will also have to declare themselves as bankrupt because their money will be lost.
By considering this situation, creditors are ready to negotiate with their consumers as per consumers' own terms because creditors don't want their consumers to declare themselves bankrupt because through this, they will get nothing and their money will sink.
They are ready to offer huge reduction in consumers' debts so that they can repay their dues in a very affordable way and creditors can also secure at least half of their money from being sunk because if they do not extend such grants to consumers then they will have to lose their money.