 TITLE: What is Debt Forgiveness? CONTENT: Different Types of Debt Forgiveness\n-----------------------------------\nBeyond declaring bankruptcy, there are only a few ways to get lenders to forgive your outstanding debt. While not available for all types of debt, here are some of the programs and details on how to navigate them.\n*   **Student loan forgiveness**. These programs are really the last true way to get a creditor to forgive your outstanding debt with no consequence. These programs only apply to federal student loan debt, and are crafted in ways that make it very difficult for people to qualify. They also usually involve you making your loan payments for a certain repayment period before the debt is forgiven.The Public Service Loan Forgiveness program, available through the U.S. Department of Education, is one of the better-known options for student loan forgiveness. It works by forgiving the loans of eligible borrowers employed in certain industries for specific periods of time. Qualifying for this program can be extremely difficult and may require you to stay in a certain job for an extended time. If you can weather the initial 10-year repayment period and other requirements of this program, at the end, your remaining federal student loans could be forgiven.\n    Another type of student loan forgiveness is income-driven repayment, an option that can clear federal student loans after 25 years of repayment. While this method forgives your remaining federal debt at the end of the repayment period, you will be taxed on the amount forgiven.\n    It's important to note that these programs are specifically for federal student loan debt and do not apply to any debt you may have with private lenders. To find out more about your student loan forgiveness options, check out the guide provided by the U.S. Department of Education or contact your loan servicer.\n*   **Mortgage debt forgiveness.** While mortgage debt forgiveness does not exist as it did a decade ago—when the housing crisis resulted in lenders clearing loads of debt—there are still some ways to adjust or reduce your mortgage burden. Much of this will depend on your financial situation, and options vary from lender to lender. Because mortgage loans are secured—meaning lenders have collateral (your house)—outright debt forgiveness almost never happens anymore.A mortgage modification can happen, however, if your lender agrees to adjust your original loan to accommodate your current financial situation. This won't wipe your debt outright, but it could be a good strategy to lower your monthly payment and in some cases shave some principal off your total balance. Modification is offered by many conventional lenders, and is also available for FHA-issued mortgages. For assistance in determining whether you are eligible, you can call the FHA or consult the Homeownership Preservation Foundation.\n*   **Credit card debt settlement.** If you find yourself severely behind on your credit card bills, negotiating a debt settlement may be a way to clear your outstanding debt—but not without consequence. Debt settlement is not debt forgiveness—rather, it's a process where you negotiate an agreement with your creditor to pay back less than what you owe using a third-party debt settlement company. This option might sound good, but it can hurt your credit score and can cost you in time and fees.Some debt settlement companies have you stop making payments while they negotiate, which can cause you to rack up missed payments and late fees. Once the debt settlement company reaches an agreement with your creditor—and it's possible they never will—your credit score will probably be in bad shape and in most cases you will owe the settlement company a fee for their service. This is a last resort option, reserved for people who can see no other way to get out from under their debt. Debt settlement, while it could clear some or all of your debt, is not the same as debt forgiveness and should be treated very differently. If you're considering using a debt settlement company, be extremely diligent about finding a reputable firm. Before turning to debt settlement, consider creating a repayment plan or consulting a credit counseling service to help you tackle your debt without hurting your credit.\nOther Debt Relief Options\n-------------------------\nWith debt settlement a last resort and debt forgiveness programs harder to find, there are a few other options to consider when trying to get on top of your debt. If you're thinking about trying to use either of these methods, it's important that you continue to make payments on time so that your credit scores remain intact. Payment history is the most important aspect of your credit score, and even one late or missed payment can negatively impact your score.\n*   **Debt management plan.** If you are having trouble managing your existing debt, consider consulting a credit counselor to create a debt management plan (DMP). With a DMP, a credit counselor will help you outline and stick to a plan to tackle your debt. Depending your plan, a DMP can help you consolidate payments, possibly reduce interest rates, and help you get an idea of when you'll be debt-free. As long as you make all your payments on time, this method could be a good way to tackle debt.\n*   **Debt consolidation**. This is another popular method of tackling debt and involves wrapping all of your debt into one low interest loan. Consolidation can save you money on interest over time and can help you streamline your finances by letting you pay fewer bills each month.\nIf you're considering either of these options, it may be good to get a free copy of your credit reports and scores so you have an idea of what your credit looks like. Understanding your credit picture will help you avoid damage to your credit as you try to get rid of your debt. You can get a free copy of your report and score from Experian.\n* * *\n**Want to instantly increase your credit score?** Experian Boost™ helps by giving you credit for the utility and mobile phone bills you're already paying. Until now, those payments did not positively impact your score.\nThis service is completely free and can boost your credit scores fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report. END