Question 1

Do credit card companies forgive debt?

Accepted Answer

Debt forgiveness is when a credit card issuer or another lender cancels some of or all of a borrower's outstanding balance, so the borrower no longer owes that debt amount. Examples of debts that a lender may forgive include credit cards, student loan debt, medical debt, a mortgage (through foreclosure), or even a personal loan.

Question 2

What happens if credit card debt isn't forgiven?

Accepted Answer

When you fall behind on your credit card bill, the credit card company typically tries to collect the debt through an internal debt collection department first. If the card issuer still doesn't receive a credit card payment, an external debt collector or collections agency may try to collect the unsecured debt. If the creditor or collections agency still can't collect the outstanding debt, the credit card company may file a lawsuit. A successful lawsuit may result in a judgment. In some states, consequences for a judgment from a debt collector may include garnished wages to repay the balance. You may be able to avoid these consequences by contacting the credit card company to discuss the situation, or seeking assistance from a nonprofit credit counseling organization. Some credit card companies, like Discover®, offer hardship programs that may help you meet your financial obligations.

What Is Credit Card Debt Forgiveness?

Key Takeaways

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