The answer is no, but the good news is: There are powerful options regardless of your disability.

Question: Is there such a thing as credit card debt forgiveness for a disability? I’m in my mid-50s and have to live on a monthly disability payment of $685. I’m a widow, but blessedly, my husband had an insurance policy I used to pay off the remainder of our mortgage and car loan. Still, I can’t make ends meet on this amount, and I now have $12,000 on my credit cards. 

I have heard there are government programs that can make your credit card bills go away, and I am wondering if there are any that apply to those with disabilities. Do these programs cost anything? What’s the catch?

— Annie in Texas

Howard Dvorkin CPA answers…

While the federal government offers disability benefits, those don’t include specific policies about forgiving debt. Thankfully, there doesn’t need to be any. This country offers robust programs that can get you out of debt, whether you’re disabled or not.

There’s no “catch,” but there are pros and cons. Let’s review these quickly, then point you to the details…

Credit counseling

This first step costs you nothing. You simply call a nonprofit credit counseling agency, and a certified counselor will give you a free debt analysis. How do you find a reputable credit counseling agency? Three tips: Seek one that’s been around for at least two decades, has an A-plus rating with the Better Business Bureau, and has excellent reviews on sites like TrustPilot and Consumer Affairs. If you call, we can also refer you.

PRO: Not only is credit counseling free, but because you’re dealing with a nonprofit monitored by the government, a reputable agency will possess the expertise to outline all your options. From there, you’ll have more information to make an informed decision.

CON: Credit counseling requires some effort on your part. That counselor will seek details about your income and expenses, so do your homework first and draw up a budget for everything you spend money on.

Read more at What Is Credit Counseling And Why Do I Need It?

Debt management program

Also known as DMP, these programs cost you a small fee, but that’s nothing compared to the money you save. Essentially, a DMP is a professionally monitored debt-consolidation plan. Your credit card company agrees to reduce your monthly payments by 30 to 50 percent, and all your credit card bills are rolled into one monthly payment.

PRO: Besides one easy payment, you pay less interest, which means you pay off your debts much faster. Best of all, these programs have been around for decades, so there’s ample evidence they work.

CON: You can’t open another credit card account while you’re on a DMP. That only makes sense, since you’re paying off the cards you already have.

Read more at Debt Management Program Pros and Cons.

Let a certified debt relief specialist help you weigh the pros and cons of debt settlement based on your needs, credit, and budget.

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Debt settlement

Sometimes, your credit card issuer is willing to simply settle for less than you owe.

PRO: Obviously, you get out of your credit card burdens without paying the full amount. Unlike bankruptcy, you can preserve some of your assets. However…

CON: There are several. First, if you care about your credit score, it’ll take a huge hit. Second, the government says debt settlement scams are among the biggest frauds in the nation. If you pursue this route, use the same tactics to find a reputable company as I outlined with credit counseling agencies.

Read more at How (and When) Debt Settlement Works.

Bottom line, Annie, you have options. Before you do anything, start at the top and make that call to a credit counseling agency.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched I’m glad you’re here.

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