2. Debt Rcovery Debt Rcovery is an aggressive approach to debt reduction, which may be appropriate for debtors with serious amount of debt and are considering bankruptcy. The existing mechanism for this regard are different in various nations.In most nations these bussiness are done by debt settlement agencies.They negotiates with the creditors to settle the debt for a lower amount than owed, as the debtor saves their money for a lump-sum settlement payment. During the debt settlement process, the debtor will obtain a letter from the creditor stating the debt obligation was fulfilled. The creditor will typically make a report to the credit bureaus that the debt has been “Settled for less than full amount”, “Paid” or “Settled”.

3. Creditors will usually only settle for less than owed when the debtor is under serious financial strain because if the debtor chooses to file bankruptcy, then the creditor is at risk of receiving only a small portion of the original debt. If the debtor does not demonstrate financial hardship, the creditor may refuse to settle the debt and instead choose to pursue additional collection activities, including legal action.

4. Brief overview of debt recovery in different nations

5. India In India the debt recovery is actually a government dominated process. So far the government have made various legislations to give effect to debt recovery. The first one is Recovery of debts due to banks and financial institutions Act 2003. A debt recovery tribunal and Appellate is constituted by this Act.

6. America In America private agencies known as “debt collectors” carries on the business of debt recovery. "Debt collector" means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.THE FAIR DEBT COLLECTION PRACTICES ACT supports this process.

7. United Kingdom In UK also It is private agencies doing the business of debt recovery. There are legislations favoring this. In UK The Late Payment of Commercial Debts Regulations 2002 entitle to claim interest on late payments and to recover debt recovery costs.

8. Australia In Australia the debt recovery is a normal court process.All State and Territory courts in Australia offer a small claims division of their local court or tribunal that provides a simple debt recovery procedure. Advantages are that the process is relatively informal, and that costs awarded against an unsuccessful party are limited. A small claim is a claim: in respect of money, goods purchased or delivered, labor or a combination of these; and up to an amount of between $2,000 and $10,000 depending on the State or Territory in which the legal action is conducted.