3 ways to have your credit card debt forgiven this October

Today's challenging economic landscape has left many Americans with little excess room in their budgets. One issue is that the cost of consumer goods has been driven up significantly over the last few years, leaving many people with less money for essentials like groceries, gas and housing. That, coupled with other factors, like a weakening job market, has placed a hefty burden on the average person's finances.

One of the most glaring consequences of this financial strain is the record-high level of credit card debt, which recently reached $1.14 trillion nationwide. After all, with consumer goods costs as high as they are, more people have had to rely on their credit cards to make ends meet. But while credit cards can offer a temporary solution, they come with a significant downside: interest rates that are sitting at nearly 23% currently. 

At that rate (or higher), any unpaid card balance can balloon quickly, turning what may have been a manageable debt into a much larger financial burden. If you find yourself in this situation, it makes sense to search for solutions to manage your card debt, like credit card debt forgiveness. With this option, the goal is to settle your debt for less than what you owe, but how can you pursue this type of debt forgiveness this October? 

Find out more about debt forgiveness and your other debt relief options here.

3 ways to have your credit card debt forgiven this October

If you want to pursue debt forgiveness this month, there are a few options for doing so.

Negotiate directly with your credit card company

One way to try and have a portion of your credit card debt forgiven is to negotiate directly with your credit card issuers. If you're behind on your payments and struggling to catch up, most creditors would prefer to receive some payment rather than nothing at all. In turn, they may be willing to work with you to come up with a plan.

So, if you're experiencing financial hardship, reach out to your credit card company and explain your situation. For example, if you've lost your job or incurred unexpected medical expenses, providing details can strengthen your case. Your creditors may offer different solutions in return, including settling the debt for less than you owe.

Why it works: Credit card companies understand that if you declare bankruptcy, they may get little to none of what you owe them. By negotiating for a lump-sum settlement, they can recoup a portion of the debt.

Don't let your credit card debt problems get worse. Find the right debt relief solution here.

Enroll in a debt forgiveness program

Debt forgiveness programs are offered by debt relief companies and are designed to help you reduce your outstanding credit card debt. When you enroll in this type of program, the debt relief company negotiates with your creditors to try and have a portion of your debt forgiven in return for a lump-sum payment. 

During this process, you'll stop making your credit card payments and will make monthly payments to the debt relief company instead. That money is held in an account and when enough has accrued, the funds are used to offer lump-sum settlements to your creditors. While there's no guarantee that negotiations will be successful, in many cases, this type of debt forgiveness can result in paying 30% to 50% less than what you owe. 

However, debt settlement comes with some downsides. There are fees tied to these programs and the process may negatively impact your credit score, too. The IRS also views the forgiven portion of your debt as income, so you may still be responsible for taxes on any forgiven amount.

Why it works: Debt settlement companies are often able to negotiate larger reductions because they are experienced in dealing with creditors. They know which strategies are most effective and can sometimes secure settlements for pennies on the dollar.

Consider bankruptcy as a last resort

While bankruptcy should always be considered a last resort, it can sometimes result in credit card debt being forgiven. For example, filing for Chapter 7 bankruptcy can discharge most, if not all, of your unsecured debts, including credit card debt. Chapter 13 bankruptcy, on the other hand, involves creating a repayment plan to pay off part of your debts over three to five years, after which remaining eligible debt may be forgiven.

The downside of bankruptcy is that it has a severe and long-lasting impact on your credit score. Filing for bankruptcy can also affect your ability to qualify for loans or credit cards in the future.

Why it works: Bankruptcy provides a legal process for wiping out or reducing your debts, giving you a clean financial slate. It's especially useful if your debt has become completely unmanageable and you see no way of repaying it.

The bottom line

While complete credit card debt forgiveness is rare, there are practical and effective ways to reduce or eliminate your credit card debt this October. But whether you decide to negotiate with your creditor, enroll in a debt forgiveness program or consider bankruptcy, the key is to take action quickly. Otherwise, compounding interest charges may cause your debt to grow, making it even more difficult to get rid of your balances.