A debt relief program is a method for managing and paying off debt. It typically involves hiring a debt relief company to employ one or more strategies that help you get debt under control, such as by reducing the amount you owe, lowering your interest rate, or securing better terms.

Those who have been on repayment plans, hold federal direct loans or federal family education loans and have completed 20 or 25 years of qualifying months are eligible for forgiveness, depending on when the loans were originated, the type of loan borrowed and the specific type of plan.

Debt relief companies, sometimes called debt settlement companies, are one option for those struggling with credit card debt, tax debt, personal loan debt, and other types of unsecured debt. These companies can help you manage certain types of debt, but they won't be the right solution for everyone.

To qualify for the debt relief program, individuals must have had an annual income below $125,000, while married couples or heads of households must have had an income below $250,000.

If you have loans that have been in repayment for more than 20 or 25 years, those loans may immediately qualify for forgiveness. Borrowers who have reached 20 or 25 years (240 or 300 months) worth of payments for IDR forgiveness may see their loans forgiven in Spring 2023.

Debt relief actions may have an impact on your credit, but it depends on which method you choose. Even if your credit score has taken a hit as a result of financial hardship or mismanagement of debt, it's not too late to get relief and prevent any further damage to your credit.

Your current income, assets, and cost of living are all taken into account, as is the total size and makeup of your family. As a general rule, if it is determined that your situation makes it unlikely that you could pay off the total debt within twelve months, you may qualify for the debt reduction program.

You must have current outstanding debt on federal student loans, including parent PLUS loans, obtained before June 30, 2022. You must earn less than $125,000 a year for individuals, or $250,000 for married couples and/or head of households.

Private student loans Only loans that are part of the federal direct loan program are eligible for PSLF. Private student loans aren't eligible. You can consolidate other types of federal student loans - Federal Family Education Loan loans or Perkins loans - to make them PSLF-eligible.

But not all loans are included in the plan: Borrowers with loans administered through the now-defunct Federal Family Education Loan program or who have Perkins loans are no longer eligible for federal debt relief.

Working with a debt settlement company may lead to a creditor filing a debt collection lawsuit against you. Unless the debt settlement company settles all or most of your debts, the built-up penalties and fees on the unsettled debts may wipe out any savings the debt settlement company achieves on the debts it settles.

100 points How Many Points Will My Credit Score Drop if I Settle a Debt? The exact impact of a debt settlement on your credit score will depend on factors like the amount of debt. A debt settlement can stay on your credit report for seven years and your score could drop by more than 100 points.