Using a credit card is a good practice, according to most of the financial experts. However, the experts also suggest people pay their credit card bills timely. Impulsive purchase is a common problem with new credit card users. Instead of being impulsive about buying things on credit cards, people should use their credit cards for meaningful purchases. Despite following this, some people fall into a debt trap due to financial emergencies. In such cases, credit card debt forgiveness can be an excellent option. The following section will discuss the procedures, eligibility, and other details related to credit card debt forgiveness.
Is Credit Card Debt Forgiveness Real?
Credit card debt forgiveness exists, though it is not available for everyone. Under certain terms and conditions, your credit card debt can be partially or totally forgiven. Similarly, student loans and personal loans can also be forgiven. A person eligible for debt forgiveness should follow a proper procedure.
How Does the Process Work?
The credit card debt settlement program does exactly what it says. The borrower should reach out to the creditor in this regard. The procedure depends on negotiations between you and the creditor. If you have filed for bankruptcy recently, you can obtain credit card debt forgiveness. People undergoing financial crunch due to urgent hospitalization and other emergencies can also apply for forgiving their credit card debt.
The creditor will verify your application minutely and may ask you to submit certain documents. The approval for debt forgiveness depends on the seriousness of your financial crunch. Moreover, you will get approval in case of a personal injury or other serious health issues. In this case, you must show relevant documents to prove your health emergency.
Eligibility for Credit Card Debt Forgiveness
Are you eligible for the credit card debt forgiveness program? The answer depends on various factors, which creditors take into consideration before giving approval to a debt settlement request. The eligibility of your credit card debt forgiveness depends on the following things.
- You need to create a detailed application to let the creditors know about your financial hardship and attach all related documents to back your claim.
- The creditor must be on the list of law firms, banks, and debt collectors. A creditor not listed with such institutions cannot offer debt forgiveness.
- If you have missed bill payment deadlines for the last few months, you would not qualify for the debt forgiveness program offered by your creditors.
- A full debt forgiveness depends on your negotiation skills. No creditor would like to offer full debt forgiveness.
Credit Card Bill Payment Deadline Extension
Choosing the debt forgiveness plan will affect your credit score, and you will not be eligible to use credit cards any further. Once your credit score goes down, it becomes extremely difficult to build a healthy credit score again.
Therefore, instead of the debt forgiveness program, you can apply for extending your credit card bill payment deadline. The extension will help you to plan your expenses in a better way and gather money to clear the debt.
The Alternatives to the Credit Card Debt Forgiveness
Instead of applying for credit card debt forgiveness, you can choose the other alternatives. Some alternatives are discussed in the following section of this article.
1. Debt Consolidation Loan
Applying for a debt consolidation loan is an excellent way of settling your unpaid lump sum debt. The loan fetches a lump sum amount, which helps pay off all your current debts. After settling all your debt, you need to manage loan repayment for only one debt. Therefore, it becomes easier to plan the expenses in this case.
2. File Bankruptcy
Filing bankruptcy is the last option for a person, who cannot pay his or her unpaid debt. Once you file for bankruptcy, you will not be eligible for loans and new credit cards anymore. So, people suffering from extreme financial crunch should only file bankruptcy to settle their unpaid credit card bills.
3. Undergo Credit Counseling
Credit counseling is an effective way of managing your unpaid debts. You can find various services that offer credit counseling so that you can improve your credit score and settle bills timely. Undergoing credit counseling also increases credit awareness, which is crucial to building and repairing credit scores in the future.
Final Words…
Credit card debt forgiveness is a viable option when you do not have money to pay your credit card bills. Creditors keep this option to forgive the unsettled debts of their borrowers, who have recently undergone unexpected financial hassles. Before applying for debt forgiveness, you can consult a debt settlement expert to learn more about the procedure and complete the process with precision.
