Should I Settle My Credit Card Debt? Here’s How to Decide

Falling behind on credit card debt can feel like you've lost your power. But you still have a lot of options for taking back control of your finances. Yes, including debt relief.

Some people may feel that debt relief is something to avoid, like it would be giving up. You might feel guilty or ashamed about looking for debt relief.   

In fact, the opposite is often true. Debt relief could be a strong step toward more solid financial ground. And looking for debt relief is nothing to feel bad about. Financial hardship can happen to anyone. Sometimes debt simply becomes too much for you to afford. 

Debt relief could be what lets you get rid of your credit card debt, and move forward with your financial life. Far from something to feel ashamed about, debt relief could be a hopeful, empowering experience. 

Let’s look at a few of the emotional reasons why you might decide to settle your credit card debt. 

Get Fired Up: Find Your Motivation for Seeking Debt Relief

The biggest reasons for deciding to settle your credit card debt are often emotional—not financial. You might seek debt relief because of a single moment that inspires you to make a change. Or you might spend a few months wondering if you should settle your credit card debt and eventually decide to take the leap.  

There’s no one right reason to settle your credit card debt. Here are a few motivating emotions that people may feel when deciding if they should settle their credit card debt.

Determination

Deciding to settle credit card debt could come with a strong sense of determination. Debt relief could help you feel more in control of your personal finances. If you’re tired of being contacted by debt collectors and feeling worried when you open your mail, debt relief could help you feel more in charge of the situation. 

Peace of mind

If you’re having trouble sleeping at night or you’re experiencing other mental health and wellness challenges because of stress and worries about debt, debt relief could help you get peace of mind. Having a path forward could give you a sense of hope and clarity. Taking action and committing to a debt plan could get you to a point in life where you can check your bank account balance free from stress. 

Enrolling in a debt settlement program could also help with peace of mind if you like knowing you have professional support. You would have help negotiating with your creditors and working out the details of a settlement offer instead of trying to manage the process on your own.

Responsibility 

Debt settlement could be a chance to take responsibility for part of your debt in a way that fits your budget. You may feel better about this part of the debt settlement process, because it lets you pay part of what you owe. 

Focus on the future  

If you’re struggling with unpaid debts, it might often feel like you’re stuck living in the past—still dealing with challenges from money that you spent years ago. Seeking debt relief could help you take big steps into your future. 

Sure, debt relief isn't an overnight solution. But your first debt could be settled in months, and all of your enrolled debts settled in two to four years. Once your debt settlement program is done, you can also start to rebuild your credit. Credit scores tend to recover more quickly after debt settlement than after filing bankruptcy. 

Freedom Debt Relief is not a credit repair organization and does not provide or offer services or advice to repair, modify, or improve your credit.

How to Know if Your Situation is a Good Fit for Credit Card Debt Settlement

Credit card debt settlement isn’t the right choice for everyone. You might be better off deciding to file bankruptcy or signing up for credit counseling. Here are some situations that could make you a good candidate for debt settlement:

• Change in finances. You borrowed money that you fully intended to pay back, but your finances changed and now you can’t repay it. 

• Financial hardship. You are experiencing financial hardship like unexpected medical bills, unemployment or reduction of work hours, ongoing medical conditions that keep you or a loved one from working, or other severe loss of income.

• Debt is becoming unmanageable and stressful. You might have already missed payments on credit cards or other debts. You might already be receiving calls and contacts from debt collectors.

• You want to get rid of debt faster. Minimum credit card payments aren't designed to get you out of debt fast and could leave you in debt for years depending on your balances. A credit counseling debt management plan usually takes three to five years to complete. 

• You don't qualify for Chapter 7 bankruptcy. Filing Chapter 7 bankruptcy is a quick process to discharge eligible unsecured debts, but not everyone has low enough income to qualify. You might need to file Chapter 13 bankruptcy, a court-ordered repayment plan that can take three to five years. And many Chapter 13 bankruptcies don’t succeed because people can’t always afford the payments. The success rate for Chapter 13 filings is only 40% to 70% based on the state. 

This information is intended for general informational purposes only. It shouldn't be taken as legal advice. For personalized legal advice, consult with a qualified attorney licensed to practice law in your state.  

If you’re having financial trouble, always remind yourself that you’re not alone, and you have several ways to improve your situation. One strategy could be getting debt relief. You might be able to settle your credit card debts in a way that fits your personal finances—and move on with your life.