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5 times credit card debt forgiveness is worth it

It may be worth reaching out to a debt forgiveness expert if you're struggling to make your minimum payments.  Getty Images

Credit card debt can be a significant financial burden, especially in today's high interest rate environment. And, if you're dealing with hefty amounts of debt and are looking for debt relief options, you may have come across credit card debt forgiveness programs. These services negotiate your principal balances to try and get lenders to forgive a percentage of what you owe, but there are some drawbacks. 

For example, credit card debt forgiveness can negatively impact your credit score. It can also come with tax implications related to debts that are forgiven. So, given the potential downsides, is a credit card debt forgiveness service worth it? Here's what you should know.

Find out how a credit card debt forgiveness program could benefit you now

5 times credit card debt forgiveness is worth it

Here are five times it may be worth reaching out to a credit card debt forgiveness expert: 

When you can't make your minimum payments

When you make just the minimum payments on your credit cards, the money primarily goes toward the interest charges — not the principal. This can result in a long timeline for paying off credit card debt. And, given today's high-rate environment, it also means your credit card minimum payments are higher today than they were a couple of years ago. 

If you can't afford to make your minimum payments, the late or missed payments can harm your credit score, and if a lender discharges your debt, it can come with tax consequences. And, the potential consequences of using a credit card debt relief company are similar — so if you're in danger of missing payments, using a credit card debt forgiveness service could make sense.

Find out how credit card debt forgiveness could help you now

When it's going to take many years or decades to pay off your debt

Depending on the size of your credit card balances, it could take decades to pay off what you owe — especially if you only make minimum payments. So, if you can't pay your debts off within the next three or four years, it may be time to reach out to a debt forgiveness expert. 

When you have to choose between debt payments and emergency savings

It could be a good idea to reach out to a credit card debt forgiveness company if you're torn between building an emergency fund or making your credit card payments. An emergency fund is an important — and fundamental — part of any solid financial plan, and being unable to put money toward your emergency savings because you're paying off high-interest debt could be a sign that it's time to get some extra help.

When you receive debt collection calls and letters

When the collection process starts, it can quickly become aggressive, and collection calls and letters may be followed by these actions: 

  • Mediation: You may be served a summons to appear in court. If so, you may be required to go to mediation before the court date, which involves a mediator trying to help you and the lender settle the debt. 
  • Court: If you're unable to settle your debt in mediation, it could escalate to a court hearing. If the judge finds in the lender's favor, you could end up with a judgment against you. 
  • Liens and garnishments: Once the lender has a judgment against you, they may take further action to collect the debt. This may include garnishing your wages or bank account or putting a lien on your property.  

When you enroll in a debt forgiveness program, your provider will typically inform your lender of your willingness to save and settle your debt. This could put an end to collection actions that are being taken against you.   

When you can't afford small splurges

If you're making significant sacrifices to afford your credit card payments, it may be time to reach out to a debt forgiveness specialist. For example, if you can't afford to enjoy a monthly meal with friends, it may be time to consider credit card debt forgiveness. 

The bottom line

Credit card debt forgiveness isn't for everyone, but it could be the right move for you if you're having a difficult time making ends meet as a result of your high-interest debt. If that's the case, it may benefit you to get in touch with a credit card debt forgiveness expert now

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