Debt collections and forgiveness: What borrowers need to consider now
Summary
Many Americans have high credit card debt, which is hard to pay back due to rising interest and other costs. Debt forgiveness can sometimes be negotiated before an account goes to collections if the borrower faces financial hardship, but this depends on the lender’s policies and the borrower's situation.Key Facts
- Credit card debt in the U.S. increased by $21 billion in the second quarter of 2026, reaching $1.26 trillion.
- New credit card delinquencies remain high, even though overall delinquency rates improved slightly.
- Debt forgiveness does not always require the debt to be in collections.
- Lenders may accept a partial payment if the borrower shows real financial hardship.
- Being current on payments can make lenders less likely to forgive part of the debt.
- Accounts in collections may be easier to settle for less, but this is not guaranteed.
- Letting debt go to collections can cause more fees, hurt credit scores, and risk legal actions.
- It can be risky to let accounts become delinquent on purpose to try to get better debt forgiveness offers.
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