Many people in New Jersey struggle to cover their credit card payments. When times get tough financially, it can be difficult to continue making payments on time or even at all. If you feel that you might not be able to pay everything off, there may be another way you can manage your debt.
What is credit card debt forgiveness?
While credit card companies may not forgive the total amount of your debts, many might accept a smaller amount to settle your balances and forgive the rest. The general idea behind credit card debt forgiveness is that if creditors feel they won’t receive the full amount owed soon, they may decide that getting something is better than nothing. Debt collectors often only resort to forgiveness in extreme cases, sometimes after a person has missed several payments.
Are there any risks to credit card debt forgiveness?
The main consequence of credit card debt forgiveness is that it could negatively impact your credit score. If the credit card company writes off a portion of your debt, here are a few potential outcomes to be aware of:
- The write-off itself as well as delinquent payments could blemish your credit score.
- Your debt could be sold to a third-party collector that might sue you or contact you non-stop.
- It will be noted on your credit report that your debt was settled for a lesser amount, which could reduce your credit score.
Should you pursue credit card debt forgiveness?
Being in debt can be overwhelming, especially if you’ve borrowed from multiple companies. Fortunately, there are several ways you can get back on top of your finances. In addition to credit card debt forgiveness, you could learn more about how to declare bankruptcy or reach a debt settlement agreement. To make the best decision for you, consider speaking to an experienced debt relief professional.