Who qualifies for credit card debt forgiveness?

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Updated on: March 13, 2026 / 12:53 PM EDT/ CBS News
The U.S.

economyshed over 92,000 jobsrecently, inflation has held stubbornly above the Fed's 2% target, and food prices, as well as other basic living expenses, are running substantially higher than they were just a year ago.

That combination of issues has that has left millions of Americansleaning harder on credit cardsjust to cover the basics.

So, while carrying a balance used to be an occasional inconvenience, it's increasingly becoming a way of life for many borrowers.

But there's a point at which carrying a balance tips from manageable to genuinely dangerous — typically whenminimum paymentsstart to feel out of reach, and interest charges are outrunning any real progress on the principal.

That's when borrowers often start asking aboutcredit card debt forgiveness, which is a process that involves negotiating directly with a creditor or debt collector to settle an account for less than what's owed.

If successful, a reduced lump-sum payment closes out the debt entirely.

That can sound like a lifeline, and for some people it is.

Butdebt forgivenessisn't without consequences.

It can damage your credit score and complicate future borrowing.

So, before you decide on this path, it's worth understanding both what it offers and whether you're the right type of borrower to take advantage of it.

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

However, this doesn't mean that credit card debt forgiveness is entirely out of reach.

While not backed by the government, certain types of credit card debt forgiveness do exist.

While it's highly improbable that a credit card issuer would completely erase your debt outside of bankruptcy proceedings, you might have the option to negotiate with your creditors for a partial reduction of your outstanding balance.

In fact, nearly anyone whois having a hard time making their credit card paymentscould qualify for forgiveness.

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

Those include:
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 yourcredit scoreand 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 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:
Credit card debt can be overwhelming, but you don't have to deal with it forever.

If debt consolidation loans are unavailable and debt management 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.

This story has been updated to clarify the difference between debt management and debt consolidation programs.

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