Can I get all of my credit card debt forgiven?

Credit card debt: Those three words can frighten even the most financially savvy people, and for good reason. Between today’s record-high average credit card rates — which are hovering near 23% — and the nature of compound interest, it doesn’t take much for credit card debt to become a source of serious financial stress. 

But despite the pitfalls of credit card debt, it’s a growing issue nationwide, with the total card debt sitting at over $1.14 trillion and the average cardholder carrying a balance of nearly $8,000 right now. When you factor in the interest charges, even the average amount of card debt can result in a hefty credit card bill each month — one that could become tough to keep up with as the interest charges compound over time. As a result, many cardholders are wondering if there’s a way to make their credit card debt disappear.

One possible solution is credit card debt forgiveness, which involves working with your creditors to pay off a portion of your debt in a lump sum, with the creditor forgiving the remaining portion of the balance. But while debt forgiveness can offer some relief, it’s not a guaranteed path to financial freedom. There are limitations to this type of debt relief, so before considering this route, it’s essential to understand whether it’s possible to have your credit card debt fully forgiven.

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Can I get all of my credit card debt forgiven?

It’s highly unlikely that you’ll be able to get all of your credit card debt forgiven through debt forgiveness. While it can, in some instances, result in dramatic reductions in your credit card debt, that won’t be the reality for every cardholder.

When you pursue debt forgiveness, either you or the debt relief company you work with tries to negotiate with your creditors to get them to accept a lump sum payment that’s less than the full amount you owe. The idea is that creditors would prefer to receive some payment rather than risk getting nothing if you were to file for bankruptcy or simply default on what you owe. However, creditors are under no obligation to settle, and many are reluctant to forgive large portions of debt, especially if they believe you have the means to pay.

But even if you do manage to settle some of your debts, you’ll still typically have to pay a large portion of what your current balance is. That’s the compromise with debt forgiveness. You pay a portion of your balance in return for the other portion being forgiven. That way, the creditor can recoup at least part of what’s owed on the account. No creditor will simply wipe the slate clean and fully forgive the debt, though — especially if you have a large balance. 

Debt forgiveness also typically only works with unsecured debts that are significantly past due. If you’re current on your credit card payments or have only recently fallen behind, your creditors are less likely to consider settlement offers. They may instead suggest other options like hardship programs or payment plans — which could make your debts cheaper by temporarily lowering your interest rates or reducing fees, but that won’t result in any of your balance being “forgiven.”

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How much of my credit card debt can be forgiven?

While getting all of your credit card debt forgiven is unlikely, it is possible to have a portion of your debt reduced by pursuing credit card debt forgiveness. On average, successful debt settlements typically result in a reduction of about 30% to 50% of the original debt amount — though it can be higher in some cases. 

For example, if you owe $10,000, you might be able to settle for between $5,000 and $7,000, meaning that somewhere between $3,000 and $5,000 may be “forgiven” by the card issuer. However, it’s important to remember that these figures are not guaranteed, and the results can vary significantly. That’s because the amount of debt forgiveness you qualify for typically depends on several factors, including:

• Your financial situation: If you can demonstrate genuine financial hardship, creditors may be more willing to settle for a lower amount.
• The age and status of the debt: Older debts that are seriously delinquent are often easier to settle.
• The creditor’s policies: Some creditors are more open to debt forgiveness than others.
• Your negotiation skills (or those of your debt relief company): Effective negotiation tactics can potentially lead to better outcomes, which is part of why so many people opt to use a debt relief company. The experts they employ are typically experienced with these types of negotiations, which can increase your chances of a positive outcome.
• The lump sum you can offer: Generally, the more you can pay upfront, the more likely you are to reach a favorable agreement.

It’s also important to factor in the fees charged by debt relief companies if you choose to work with one. These fees can eat into any savings you might achieve through debt forgiveness, sometimes to the point where the benefit becomes negligible.

The bottom line

Debt settlement can provide a path to reduce your credit card debt, but it is not a guaranteed or simple solution. It’s unlikely that you will get all of your debt forgiven, as creditors are usually not willing to wipe out the entire balance. However, if you are facing financial hardship and are at risk of defaulting on your payments, debt settlement could offer a way to reduce the amount you owe, typically by 30% to 50%, which can make it a smart option for the right person.