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7 Credit Card Debt Forgiveness Options

Last updated 03/15/2024 by

Erin Gobler

Edited by

Fact checked by

Credit card debt can be fully or partially forgiven by negotiating with your credit issuer, enlisting the help of a debt settlement company, or filing for bankruptcy. There are also several alternatives that can help you manage your debt without having it forgiven.
If you’ve ever found yourself saddled with a large amount of credit card debt, you know just how overwhelming it can be. Because of the notoriously high interest rates on credit cards, it’s hard to get ahead, and it may seem like your monthly payments barely move the needle on your balance.
There are multiple methods to deal with credit card debt, such as debt consolidation, balance transfers, and debt management plans. However, if your situation becomes unmanageable, you may find yourself wondering what debt forgiveness or relief options there are available.
There are a few ways to have your credit card debt either partially or fully canceled. However, those options come with major downsides, including high fees and an impact on your credit report and score. The good news is there are also some alternatives that can help you manage your debt with fewer negative consequences.

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Can credit card debt be forgiven?

The answer to whether credit card debt can be forgiven is a complicated one. There’s no easy way to apply for credit card debt forgiveness, nor are credit card companies in the business of forgiving customers’ debts. Josh Richner of National Legal Center, a law firm that helps people resolve debt without bankruptcy, understands how damaging these “tips” can be.
The internet likes to think there are tricks and tactics that can eliminate debt,” said Richner. “In reality, they rarely work, and the risk is a debt collection lawsuit, so it’s important to be intentional and mindful of your strategy.”

Credit card debt forgiveness options

With all this in mind, there are some forms of debt relief that allow you to have your credit card balance either reduced or eliminated.

1. Call your creditor

If you’re having a hard time making your credit card payments, your first step should be to call your creditor. No, it’s not likely they’ll forgive your debt outright. But they might be willing to offer other types of debt relief to make your debt balance and payments more manageable.
“You can ask and hope for complete debt forgiveness, but it is more likely that they’ll begin with a settlement offer of less than the full amount owed,” Richner said.
Some ways your credit card company might be able to help include reducing your interest rate, waiving fees, lowering your monthly payment, or even settling your debt for a lower amount than you currently owe.

2. Debt settlement

Debt settlement is a process where an attorney or company works on your behalf to settle your debts for a lower amount than you owe.
Unfortunately, credit card debt settlement can have a serious negative impact on your credit. To give you the best chance at settling, a debt settlement company will often advise that you stop making payments on your debt. Because creditors would rather recoup some of their losses than none, they then settle for a lower amount.
If you’re considering debt settlement, you can choose between a debt settlement company or a debt settlement attorney. And while companies can be a good option for consumers with simple debt situations, it’s also important to be cautious since the industry has been known for scams.
“When debt settlement companies had their heyday in the 2008 financial crisis, consumers were harmed,” Richner said. “High upfront fees were charged without [a] real strategy or protective measures for the consumers. To protect yourself, only work with companies that are certified by a trade organization like IAPDA so you know they meet industry standards.”
To ensure you find a trustworthy debt settlement company, compare your options and user reviews using the tool below.

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3. Bankruptcy

Bankruptcy is generally considered a last resort for debt relief, but it’s also the most effective way to truly have your credit card debt forgiven.
Chapter 7 bankruptcy, which is what most people would use, can fully wipe out certain types of debt. When you file, a bankruptcy trustee will work with you to make a list of your assets and liabilities. Some of your assets will be seized and liquidated to pay off creditors.
Any credit card debt that remains after the liquidation will be fully forgiven. However, it will also have major negative consequences for your credit. Bankruptcy acts as a fresh start for your debt, but it remains on your credit report for ten years. It will also likely prevent you from qualifying for credit cards, loans, and other forms of credit for quite a while after you file.

Pro Tip

While some assets are liquidated during bankruptcy, others are exempt. Examples of exempt property include your vehicle, your home, jewelry, retirement accounts, public benefits, and certain personal property up to a specific dollar amount.

Consequences of credit card debt forgiveness

The forms of credit card debt forgiveness we discussed above can help relieve the financial stress that debt causes, but they also come with some major downsides.
First, not repaying your credit card debt, regardless of the debt forgiveness method, can impact your credit score. Debt settlement and bankruptcy can cause your credit score to drop hundreds of points, and it can take years for your credit to recover fully.
Next, debt forgiveness often comes with fees. Debt settlement agencies, in particular, are known for the high fees they charge. While they might be able to settle your debt for thousands of dollars less than you owe, you could also end up paying 20% of the balance in fees.
Finally, credit card debt forgiveness could affect your tax bill. The IRS generally considers canceled debt to be taxable income, but there are exceptions, such as for debt canceled in bankruptcy. If you have $10,000 of debt forgiven and have an effective tax rate of 14%, you could end up paying $1,400 in income taxes.

Pro Tip

Unlike other forms of debt cancellation, bankruptcy has no income tax consequences. The debt that was discharged isn’t considered taxable income.

Credit card debt forgiveness alternatives

As we’ve discussed, there are several methods that can allow you to have your credit card debt either fully or partially forgiven. However, there are downsides to those options, and they aren’t right for everyone.
The good news is there are alternatives that can help you manage and pay off your debt without having it forgiven.

1. Debt snowball or avalanche

The debt snowball and debt avalanche are the two most popular methods for paying off debt. This debt repayment method was made famous by Dave Ramsey, but many financial experts prefer the avalanche because of the financial advantages.
The debt snowball is a debt payoff strategy where you prioritize your smallest debt. First, you make a list of all your debts, including their balances, monthly payments, and interest rates. Each month, you make the minimum payment on all your debts except the smallest one. Any extra money you can put toward debt each month should go toward your smallest debt.
Once you’ve repaid your smallest debt, you’ll take all the money you were putting toward it and start putting it toward the next smallest debt. You continue this until you’ve repaid all your debt.
The debt avalanche works very similarly to the debt snowball. You make the minimum payment on all your debts except one. But with the debt avalanche, you always prioritize the debt with the highest interest rates. As a result, you’ll end up paying less interest overall.
Related reading: To learn more about the debt snowball method, take a look at our article “How to Decide Which Credit Card To Pay Off First,” which takes a closer look at debt repayment strategies.

2. Debt consolidation

Debt consolidation allows you to combine several smaller debts into one large debt. For example, if you have multiple credit cards with balances on them, you could consolidate that debt by taking out a debt consolidation loan — a type of personal loan — and using it to pay off all the credit cards.
Debt consolidation has several advantages. First, it allows you to go from having several monthly payments to just one, which simplifies your finances. Additionally, personal loans usually have lower interest rates than credit cards, which can make your payments more manageable and ensure that more of your money is going toward your principal balance instead of interest.

3. Balance transfer

A balance transfer allows you to transfer the balance of one credit card to another. Many credit cards have balance transfer offers that allow you to pay reduced interest — or even 0% — on your transferred balance for a period ranging from six months to two years.
As long as you pay off your transferred balance within the 0% introductory period, you won’t pay any interest on your debt. But if you continue making only the minimum payments and still have considerable debt when the introductory APR period ends, you could find yourself in the same situation you are today.

Pro Tip

If you’re using a balance transfer, do the math to figure out how much you would have to pay each month to have your debt fully paid off by the time the introductory APR ends. Committing to paying that amount could save you thousands of dollars in interest. Take a look at some of the balance transfer cards below to get a better idea of the terms you could be eligible for.

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4. Debt management

A debt management plan is a type of debt repayment tool that some credit counseling organizations offer. With this type of plan, the agency reviews your situation and goes through your options with you.
If you work with a debt management plan, they negotiate with your creditors on your behalf. They often agree to new payment plans, waived fees, reduced interest rates, and more. Then, you’ll make one monthly payment to the credit counseling agency, which will then distribute it to your creditors.
When you use a debt management plan, you’ll still be expected to pay off the full balance. Additionally, you’ll likely pay a monthly fee to the credit counselor along with your normal debt payment. To keep these fees as low as possible, use the tool below to compare credit counseling agencies.

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Is there a credit card debt forgiveness program?

There’s not technically one overarching credit card debt forgiveness program, but there are ways to have some or all of your credit card debt canceled.

How do I get rid of credit card debt without paying?

You can get rid of some or all of your credit card debts by negotiating with your creditors, working with a debt settlement attorney or company, or filing for bankruptcy.

Do credit card companies offer debt relief?

Credit card issuers rarely agree to forgive someone’s debt outright. However, they might offer other types of relief such as lowering your interest rate, waiving fees, or settling your debt for a lower amount.

Key Takeaways

  • While credit card companies don’t generally forgive balances, there are ways to have your balance reduced or eliminated.
  • Methods like debt settlement and bankruptcy can relieve your debt burden but also come with major downsides and aren’t right for every situation.
  • Credit card debt forgiveness can harm your credit score and often comes with high fees.
  • Alternatives to credit card debt forgiveness include the debt snowball or avalanche, debt consolidation, a balance transfer, and debt management.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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Erin Gobler

Erin Gobler is a Wisconsin-based personal finance writer with experience writing about mortgages, investing, taxes, personal loans, and insurance. Her work has been published in major outlets, such as SuperMoney, Fox Business, and

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