Who qualifies for credit card debt forgiveness? (2024)

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MoneyWatch: Managing Your Money
Who qualifies for credit card debt forgiveness? (2)

More than eight out of 10 adult Americans have at least one credit card in their wallets, according to theU.S. Government Accountability Office. And, many people don't realize how quickly credit card balances can add up — or how credit card debt can cause issues wheninflation skyrockets.

Given the high usage of credit cards nationwide, it's easy to see whycredit card debtis a common issue in the United States. But while credit card debt may be common, it can also be stressful.

So what can you do when your credit card debt gets out of control? Well,credit card debt forgiveness could help you get some of your debt forgiven, but who qualifies for it — and how?

Get access to the credit card debt relief you need now.

Who qualifies for credit card debt forgiveness?

When it comes to credit card debt forgiveness, you may think there are government programs that help get rid of debt. Unfortunately, there is no such thing as a government-sponsored program for credit card debt relief. In fact, if you receive a solicitation that touts a government program to get you out of debt, you may want to think twice about working with that company.

But the good news is that credit card debt forgiveness does exist — it's just not government-sponsored. While it's highly unlikely that any credit card company will forgive 100% of your debt without it being part of a bankruptcy, you may be able to negotiate a settlement with your lenders in which they forgive a percentage of the balance you owe. Moreover, nearly anyone who has a hard time making their credit card payments may qualify for forgiveness.

How to get your credit card debt forgiven

There are a couple of ways to get your debt forgiven by credit card companies. Those include:

Debt settlement programs

Debt settlement programs are a type of debt relief service. At the start of the program, a debt relief expert will typically analyze your debts and financial position. Using this information, the expert will create an affordable, effective payment plan.

When you make your payments to the debt settlement company, they generally hold the money in a special-purpose savings account. Once you've saved enough money to settle your debts, the debt settlement company starts negotiating with your creditors in hopes of reducing your principal balance. These negotiations are often successful, resulting in significant long-term savings.

But there are some potential disadvantages to think about before signing up for one of these services. For starters, debt settlement companies do not make payments to your creditors as you save for your settlement. That will likely hurt your credit score and impact the ability to borrow for some time.

Moreover, there's no guarantee that your credit card company will accept the settlement. If they don't accept it, you could end up with a larger debt burden than you started with, and if they do, you'll likely need to pay income taxes on the amount of debt that was forgiven.

Find out how a debt relief service can help you now.


If credit card debt settlement doesn't provide enough relief, it may be time to reach out to a bankruptcy attorney. Sure, bankruptcy will likely harm your credit score and ability to borrow in the near term, but as a last resort, it's oftenan effective way to get out of overwhelming credit card debt. You may be able to get your debt 100% forgiven through bankruptcy, giving you the ability to restart on a clean financial slate.

Debt forgiveness may not be your only option

Debt settlement programs and bankruptcy both have the potential to result in forgiven debt, but they're also likely to have a significant impact on your credit score and your ability to borrow. But there are other options to consider, too, including:

  • Debt consolidation loan: You may be able to take out a personal loan to consolidate your credit card debts at a lower interest rate. These loans usually come with fixed payment schedules, offering a clear path to payoff.
  • Use your home equity: Home equity is a relatively inexpensive way to access cash when you need it, and the average American homeowner has quite a bit of it. You may be able to tap into your home's equity to consolidate your credit card debts at a lower interest rate.
  • Debt consolidation programs: Under these programs, debt relief experts use your financial data to negotiate better terms with your lenders and create payment plans to help you pay your debts off faster.
  • Financial hardship programs: Many credit card companies offer financial hardship programs that could offer relief through lower interest rates and fixed payment terms. Signing up for these programs is often as simple as calling your lenders and asking for help making your payments more manageable.

The bottom line

Credit card debt can be overwhelming, but you don't have to deal with it forever. If debt consolidation loans are unavailable and debt consolidation programs don't offer enough relief, it may be wise to use a debt settlement company to try and get a percentage of your debt forgiven. But if debt settlement doesn't provide enough relief, it may be time to file bankruptcy and restart on a clean financial slate.

Joshua Rodriguez

Joshua Rodriguez is a personal finance and investing writer with a passion for his craft. When he's not working, he enjoys time with his wife, two kids, three dogs and 6 ducks.

Who qualifies for credit card debt forgiveness? (2024)


Do we receive credit card debt forgiveness? ›

To be clear, debt forgiveness does exist, and it's possible to settle your debt for less than what you owe. But to get it totally erased is rare, and it usually requires an extreme measure, such as bankruptcy.

Is there really a debt relief program? ›

There are also debt relief companies that will negotiate for you. This, however, typically involves paying a fee to the company that's helping you to get loan relief or credit card debt relief. Also, keep in mind that you typically need to be past due before a creditor will consider settling a debt.

Is the government helping with credit card debt? ›

Unfortunately, there is no such thing as a government-sponsored program for credit card debt relief.

Can I ask my credit card company to forgive debt? ›

Credit card companies rarely forgive your entire debt. But you might be able to settle the debt for less and get a portion forgiven. Most credit card companies won't provide forgiveness for all of your credit card debt. But they will occasionally accept a smaller amount to settle the balance due and forgive the rest.

How do I know if I qualify for debt forgiveness? ›

If you have loans that have been in repayment for more than 20 or 25 years, those loans may immediately qualify for forgiveness. Borrowers who have reached 20 or 25 years (240 or 300 months) worth of eligible payments for IDR forgiveness will see their loans forgiven as they reach these milestones.

How can I clear my credit card debt without paying? ›

No, you really can't get rid of credit card debt without paying. Filing bankruptcy for credit card debt will indeed lets you escape credit card debt. But if you're asking, “How can I get rid of credit card debt without paying anything to anybody?” the answer is still: You can't!

Is debt hardship relief legit? ›

The email claims to be from a government agency or organization that offers financial assistance to those in need. The email says you have been approved for financial support and to call a phone number to finish enrolling in the program. However, it is all fake.

What is the disadvantage of debt relief program? ›

Cons of debt settlement

Creditors are not legally required to settle for less than you owe. Stopping payments on your bills (as most debt relief companies suggest) will damage your credit score. Debt settlement companies can charge fees. If over $600 is settled, the IRS will view this debt as a taxable income.

What is the debt hardship elimination program? ›

Credit card hardship programs explained

Often, through these arrangements, lenders or banks agree to temporarily reduce or eliminate interest charges, lower your payments, waive late fees and extend payment due dates. You may even be allowed to temporarily suspend payments altogether under certain conditions.

How do I ask for debt forgiveness? ›

The borrower can apply for debt forgiveness on compassionate grounds by writing about the financial difficulties and requesting the creditor to cancel the debt amount.

What is credit card forgiveness program? ›

Credit card debt forgiveness is when some or all of a borrower's credit card debt is considered canceled and is no longer required to be paid. Credit card debt forgiveness is uncommon, but other solutions exist for managing debt. Debt relief and debt consolidation loans are other options to reduce your debts.

What percentage will credit card companies settle for? ›

Credit card companies may settle for anywhere from 10% to 50% of the amount owed.

How long does it take for credit card debt to be forgiven? ›

The bottom line. Credit card debt forgiveness usually takes anywhere from two to four years on average. However, that time frame may vary depending on the amount of debt you owe, how much money you can afford to pay per month and the company you work with.

Does credit card debt forgiveness hurt your credit? ›

Credit card debt forgiveness could hurt your credit

You stop making payments to your creditors as you save for your settlement. Creditors typically report the debt as "settled" rather than "paid as agreed" on your credit report once it's paid off. This shows that the creditor wasn't able to collect on the full debt.

What is a credit card debt relief program? ›

1 Credit card debt can be a significant burden for many people, but some options may offer relief. The best debt relief companies can negotiate with card issuers to lower the amount you owe on your credit cards in exchange for a fee based on the amount settled.

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