Credit Card Debt Forgiveness – Fact Or Fiction?

in Credit Cards

With Americans still deep in debt and an economy still in trouble, rumors have popped up about an alleged Credit Card Debt Forgiveness Act 2010.  But are these rumors fact or fiction?  Many people believe the US government will do some sort of credit card debt forgiveness program as part of the current economic bailout. recently looked into these rumors.  As near as we could determine, there is no such act currently in effect or under consideration, at least in the USA.  A federal government sponsored credit card debt forgiveness plan appears to be wishful thinking.

The rumor seems to have its roots in bank and card industry recommendations for a credit card debt forgiveness program.  But the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 stopped short of implementing credit card debt forgiveness.  With $835.5 Billion in credit card debt in the USA, it is obvious that any credit card debt forgiveness act would have been massively expensive.

So what options do you have if you find yourself hopelessly buried in credit card debt and unable to meet your obligations?  You really only have a few:

  • You can try to consolidate your debt with a debt consolidation loan.  Be careful if you do this, as sometimes this requires you to secure the loan with collateral such as your home.  If you are in real financial trouble (or might be during the lifetime of the loan), this could be a mistake.
  • You can try to negotiate with the credit card companies (either by yourself or through an attorney or service).
  • Or if you are really in trouble, you may need to consider bankruptcy.  Although this should always be a final option, it is the reason why we do not recommend using your home as collateral on a debt consolidation loan.  Unsecured credit card debt might be eliminated by bankruptcy, but a secured loan or second mortgage could put your home at risk.

So unfortunately, the hopes of many for some sort of credit card debt forgiveness act seem to be completely unfounded, at least in the USA.  There does not appear to be any such legislation currently under consideration.  If you are in serious trouble paying your cards off, don’t wait hoping that such an act is coming.  Instead, take action now to solve your problems.  And of course, always seek competent legal help as necessary.

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