Most credit card companies like Navy Federal Credit Union have internal hardship programs. On a hardship plan, banks will temporarily lower your interest rate and sometimes lower your payments for usually 3-12 months to help you get back on track. Your financial hardship reason must be compelling to qualify for the benefits. Some creditors may reduce your credit limit or close your account when you are placed on their hardship plan.

Most credit card companies do not have a formal forgiveness or settlement program. In order for a creditor to forgive a portion of your debt, you would need to be severely delinquent. Usually more than 6 months behind where your credit is ruined. At that point, most creditors would be willing to receive a lump payment of 40-60% of the balance and forgive the remaining balance. However, the amount forgiven would typically be considered taxable income by the IRS.

Navy Federal Credit Union (NFCU) works with nonprofit credit counseling agencies to help their clients experiencing financial hardship. They typically offer their clients lower payments and lower interest rates. Contact DebtWave Credit Counseling at 888-686-4040 for more information. Or Get Help Online.