Is Credit Card Debt Forgiveness Legit? Everything You Need To Know About Debt Forgiveness

Is credit card debt forgiveness real?

When you have a credit card, it is possible for the debt to pile up. At some point, the debt might pile up, making it seem like you can do only a little. And a little is not enough to pay off your large pile of debt. That is when you consider credit card debt forgiveness.

Getting back to the question ? is it real? Well, the answer is yes. But these debt forgiveness are uncommon. It is safe to say that they are rare. Follow through this article to learn more about credit card and debit card debt forgiveness.

What Is Credit Card Debt Forgiveness?

Wouldn?t it be nice to have all the credit card debts that piled up on your credit cards be canceled? You don’t have to pay off the debt that piled up on your credit card, and you can live a happy life after that.

But, it is only a fantasy. Yes, there are circumstances under which your debts are paid reduced but never erased completely. You can settle the amount of debts you have to pay, but there is no way to actually erase your credit card debts. But, in some rare cases, the debts can be forgiven. But that would require you to declare bankruptcy.

This is quite a harsh and unfair means of getting rid of your debts. It also affects your wallet and your credit score. But there are options that you can consider. There are many non-profit credits and counseling organizations that can help you meet your debt settlement.

How Does Credit Card Debt Forgiveness Work?

To understand how credit card debt forgiveness works, you need to go through an example. For example, say you have a doubt of $15000, and you are six months behind the calendar. The credit card company, at this point, will sell your debt to a debt collection agency. Now, instead of the credit card bank, you will be negotiating with this agency.

These agencies will help you reach an agreement, and you can reduce your debt to some amount. For example, you may have to pay them $12000 of the debt in a lump sum, or you can opt for installments. The rest of the debt is forgiven. But it may come back to bite you later because you might end up paying taxes on the forgiven debt.

Thankfully you can take some steps and avoid dealing with a debt collector.

Is Credit Card Debt Forgiveness Real? 

There are specific examples of debts being forgiven. Student loan debts and credit card debts are often forgiven. However, in most cases, the credit card company uses a debt collector to collect the debt. The creditors or the collection agencies also often file a lawsuit against the borrower. The whole process results in the borrower getting their wages garnished in some selected states.

Debt Relief Vs Debt Forgiveness

When Googling about Debt forgiveness, you may also come across the term debt relief, and assume them to be similar. But they are different. Debt relief only postpones your debt for a certain time. Later on, you have to pay the entire debt under a specific payment plan restructured for your benefit. But debt forgiveness is the restructuring or the omission of a certain amount of debt from the pile of credit card debts you have amassed.

Different Debt Relief Options 

Yes, your debt cannot be erased completely. But there are different workarounds that you can try. Here are different ways of dealing with your credit or debit card debts ?

Debt Management

No credit card debt forgiveness, but debt relief is the solution you can try. The debt management program allows you to pay off your debt within the tenure of three to five years. On top of that, you may also benefit from a reduced rate of interest. But for these services, you need to look for credit card debt management agencies. There are both legitimate and fake agencies for debt counseling, so keep your eyes and ears sharp before choosing one.

Debt Settlement

If you want to settle your debts ( credit or debit card debts), you can take help from debt settlement companies. These companies will ask you to stop paying debts. This will make your credit card accounts go into default. This is when the debt settlement company steps in to settle the debt.

Although it may seem intriguing to have your debts settled by these companies, your credit scores will be affected in the process. Also, according to the Federal Trade Commission, these debt settlement companies are fraudulent, and they follow many unfair practices. They also might charge you fees upfront, guaranteeing you that a massive amount of your debt will be removed. But you should not be swayed by them.

However, if you want to take help from such an organization, you should consult with your state attorney general?s office.

Negotiate With The Agency By Yourself

You can try another option, which is negotiating with the debt settlement company on your own. But you should also be careful about what you say to these collectors. There is no need to be intimidated by their claims and approaches. Thanks to the FTC, the borrowers are protected by the Fair Debt Collection Practices Act, which the FTC enforces upon debt collectors.

Government Help For Credit Card Debt Forgiveness

Most people cannot access the “government debt relief programs.” But on the bright side, the government can take steps you to protect the borrower from unfair debt collection practices. They also help you with services for paying your own bills. The Consumer Financial Protection Bureau exists to help borrowers from getting into any unfair financial practices. If you are confident that any wrong practices victimized you to have unrealistic financial debt, you can contact and file your complaint to the CFPB.

Bottom Line

The truth is, you cannot completely erase your credit card debts from your credit card. But there are specific ways of managing your debts. In the most rare cases, a borrower may declare themselves and have their credit card debts forgiven. But these cases are still rare. There are lots of debt settlement companies you can take help from, but you should be very cautious about their legitimacy.

I hope that you have found your solution. However, let us know if you have any similar queries that you want us to answer.

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