But under modern personal bankruptcy code, lenders get a "workout" of debts owed and usually the bankrupt has to pay back or work out a schedule of payback of debts over a fixed number of years such as five years. Since the lender has already collected a lot of interest, there's no incentive for them to reduce the balance on the debt.
Again, this gets back to the poverty stories posting I mentioned earlier. Poor people and unsophisticated people - usually the same people - believe that there are secret tricks to getting wealthy and all you need to know the secret handshake or the right person to "get lucky" and become wealthy.
(It is sort of like Ontario's experiment in guaranteed income which comprises sending $16,000 to random people in the province. This is not really so much a guaranteed income program, but a lottery for a lucky 4,000 people in the province. If I wasn't one of the 4,000, I'd be plenty pissed, that's for sure! Similarly, randomly and unevenly "forgiving" debts is not fair, either, which is why it is not commonly done).
Now if you think these sorts of organizations are scam artists and scoundrels and criminals, I have to agree with you. And the fact that they advertise on the radio and television and billboards does make me sick. But then again lawyers and doctors have her ads on billboards these days, too - and I probably would advise against using the services of either.
As soon as you start thinking that there are easy ways to get out of your debt situation, you are prime fodder for some sort of con-artist. If you think there is easy money to be made in MLM schemes, you're going to get ripped off. If you think you can make a lot of money by having special secret knowledge or knowing the right people, chances are, you are going to get fleeced.