Help with debt (2024)

FAQs

How do I get out of debt I can't afford? ›

Debt relief companies, also known as debt settlement companies, are an option if you're struggling with a lot of unsecured debt — like credit card bills, personal loans or private student loans. Agents can negotiate with your creditors and possibly get your balance lowered.

Outside of bankruptcy or debt settlement, there are really no other ways to completely wipe away credit card debt without paying. Making minimum payments and slowly chipping away at the balance is the norm for most people in debt, and that may be the best option in many situations.

You can either do the job yourself or go through a third-party debt-settlement company that negotiates with creditors on your behalf. Depending on the terms of the agreement, you could end up paying less than what you owe (through a lump sum) or see interest rates and fees reduced or waived.

Key Takeaways

There aren't any free government debt relief programs for credit card or personal loan debt other than bankruptcy. Many types of government debt relief exist in the form of grants and low-interest loans for specific purposes.

One would permit automatic relief of up to $20,000 of the amount by which a borrower's loans currently exceed what they owed upon starting repayment. This relief could be provided automatically to all types of student loans held by the Department, including parent loans, consolidation loans, and loans in default.

The bottom line. While credit card debt forgiveness can offer a path out of overwhelming debt, it's not without its drawbacks. The impact on your credit score can be significant, potentially affecting your ability to obtain credit, secure favorable interest rates or even rent a home in the near future.

How to get out of debt living paycheck to paycheck? ›

While debt settlement may be worth a lower credit score for some, it may not be for everyone. You should avoid debt settlement if: You can afford your monthly payments. You haven't explored options like debt management and consolidation.

The borrower can apply for debt forgiveness on compassionate grounds by writing about the financial difficulties and requesting the creditor to cancel the debt amount.

Get professional help: Reach out to a nonprofit credit counseling agency that can set up a debt management plan. You'll pay the agency a set amount every month toward each of your debts. The agency works to negotiate a lower bill or interest rate on your behalf and, in some cases, can get your debt canceled.