Don't qualify for debt forgiveness? Here are your other options

If you're buried in credit card debt, you may have looked into debt forgiveness as a way to get some much-needed relief. After all, when you're juggling multiple payments, watching interest compound and fielding calls from creditors, the idea of negotiating to pay less than you owe can be pretty appealing, especially considering that you could end up paying as little as 50% of the original balance. But qualifying for a debt forgiveness program offered through a debt relief company isn't as simple as just being in debt. 

To be eligible for a debt forgiveness program, you typically need to have a significant amount of unsecured debt — generally at least $5,000 to $10,000 — and be behind on payments. You also need to demonstrate that you're unable to repay what's owed. That's because creditors are more likely to negotiate a settlement when they believe there's a risk they won't be repaid at all. So, if you're still current on your payments or your total debt load is relatively low — or if you don't have enough income to make the monthly payments to the debt forgiveness program — you may not qualify. 

So what happens if you're denied or find that debt forgiveness just isn't a good fit for you? Well, there are other strategies that can help you get out from under your debt, often with fewer risks and more long-term benefits. Below, we'll take a look at what to consider next.

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Don't qualify for debt forgiveness? Here are your other options

If debt forgiveness isn't available to you or doesn't make sense for your situation, these alternatives could offer the relief you need:

Consolidating your debt into one loan

Debt consolidation involves combining multiple debts into a single loan with a lower interest rate. This can help simplify your payments, reduce your overall interest costs and make it easier to pay down what you owe. You can consolidate debt using a personal loan, a specific debt consolidation loan or even a home equity loan or home equity line of credit (HELOC) if you're a homeowner.

Unlike debt forgiveness, you're not asking creditors to forgive part of your balance. Instead, you're essentially refinancing your debt to make it more manageable. So, this strategy works best if you have decent credit and steady income, which are two things lenders typically look for when approving consolidation loans.

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Entering a debt management program

A debt management plan is part of a structured debt repayment program that's arranged through a credit counseling agency. When you enroll in this type of program, the agency works with your creditors to reduce your interest rates and waive certain fees, then sets up a single monthly payment that you make to the agency, which distributes it to your creditors.

The benefit here is you can pay off your debt faster and at a lower cost, usually within three to five years. Unlike debt forgiveness, you're still repaying the full amount you owe, but under better terms. Debt management plans don't hurt your credit score the way debt forgiveness can, either. However, you may need to close your credit card accounts during the program, which could impact your credit score temporarily.

Using a balance transfer to temporarily wipe out interest

If you have good to excellent credit, using a balance transfer credit card with a 0% introductory APR to temporarily wipe out interest can be a powerful approach. These cards let you move high-rate balances to a new card with a temporary interest-free period (usually between 12 to 21 months). During that window, you can pay down your debt without interest piling up.

Keep in mind, though, that balance transfers generally come with a fee (typically 3% to 5% of the amount transferred), and you'll need to pay off the balance before the introductory period ends to maximize the savings. Still, it's one of the cheapest and most effective short-term options if you qualify.

Work with a credit counselor

Talking to a certified credit counselor can be incredibly helpful even if you're not ready to commit to a debt management plan. These professionals offer free or low-cost sessions, where they'll review your finances, help you create a budget and walk you through your options for tackling your debt. A credit counselor can also explain the pros and cons of each strategy based on your unique situation. While they can't erase your debt, they can offer clear guidance and connect you to tools or programs that make the process less overwhelming.

The bottom line

Debt settlement can sound like an easy fix, but it's not always available or advisable. If you don't qualify or feel uneasy about the risks, that's okay. There are still several reliable ways to get out of credit card debt and put your feet back on solid financial ground.

Whether you consolidate your debt, transfer balances, enter a debt management plan or seek expert guidance from a credit counselor, you've got options. You'll want to act sooner rather than later, though, and stay consistent and committed to a plan that fits your situation. With the right strategy in place, you can take control of your debt and your financial future.