Definition

A program where some or all of your debt is canceled, usually under specific circumstances. It can provide relief if you’re overwhelmed by debt.

What to consider

  • Check if you meet the criteria before applying.
  • Understand how forgiven debt might impact your taxes.
  • Use this as a last resort after exploring other options.

Real world scenarios

  • After lengthy negotiations, Laura meets the conditions of a forgiveness program, cutting her total debt nearly in half.
  • Niles discovers a nonprofit initiative that forgives part of his medical debt, significantly easing his monthly burden.
  • By complying with strict eligibility rules, Manny eventually has a large chunk of his unsecured debt wiped away.

Related terms

Debt & Loans