How to Write Off Credit Card Debt? Quick Guide

Is paying your credit card debt causing you to worry? You are not alone – every month, over 170,000 people seek our guidance to find solutions for their debts.

In this easy guide, we’ll share clear and simple advice on:

• The legal ways to write off credit card debt in the UK.
• Steps to follow when you can’t pay your debt in full.
• Tips on how to pay off part of your debt.
• Choosing the best method to write off your debt.
• Other options if you’re struggling with unaffordable debt.

We understand how stressful dealing with debt can be. Whether it’s about writing off your debt in full or in part, we’re here to guide you through your options. We’ll explain how debt write-off works and help you understand when you might be able to write off some of your debt. Our aim is to help you make the right choices, so you can start to feel better about your money.

Let’s dive in.

Is It Possible to Write Off Credit Card Debt?

There are three ways you can legally write off credit card debt. And there are some other methods to write off some of your credit card debt. 

We’ll break these down for you here.

How to Write Off Credit Card Debt (In Full!)

1. Statute Barred 

Statute Barred is a legal loophole that allows you to write off older unsecured debts. If your credit card debt is six years old or more, and you have never received a CCJ to pay, or have not made a payment in the last six years, you will probably qualify.

The loophole blocks the credit card company from starting legal proceedings to force you to pay. And the bottom line is that without going to court, the credit card company can never make you pay or employ bailiffs to get the money.

The courts are simply too overwhelmed to be discussing old debts, which helps you not have to pay. Although the debt is not officially written off, the end result is the same.

2. Debt Relief Order

If your credit card debts are less than £30,000, you don’t own a property and you have less than £75 of disposable income each month after paying your necessities (rent, bills, groceries etc.), then you might want to use a Debt Relief Order.

A Debt Relief Order is a formal debt solution which would stop your credit card companies requesting payment for a full year. If your financial situation doesn’t improve by the end of this year then all your debts will be wiped. 

However, there are implications of choosing a Debt Relief Order. You can read all about them in this DRO guide. 

3. Bankruptcy

Bankruptcy is the even more serious option than a Debt Relief Order. Declaring yourself bankrupt will prevent you from having to pay off your credit card debts, but it will have significant consequences. You might struggle to get basic agreements like mobile phone contracts in the future and it will hinder you in many instances.

But it can also be the right decision. Learn more about Bankruptcy and when it is a smart choice in our simple bankruptcy explanation.

» TAKE ACTION NOW: Fill out the short debt form

How to Write Off Credit Card Debt (In Part!)

There are also ways to write off part of your credit card debt providing you commit to paying the rest of the debt instantly or over time. We’re referring to a debt settlement offer and an Individual Voluntary Arrangement, respectively.

1. Debt Settlement Offer

A debt settlement offer is an offer to pay a lump sum of the debt providing the creditor – in this case, a credit card company or bank – will write off the percentage of the debt you don’t pay. It is usually used by people who have most of the money but not quite all of it, or by debtors who are gradually paying off the debt and come into some money via an inheritance or a new job.

For example, you might owe a credit card company £2,000 and they have started asking for full payment or will take legal action. In this instance, if the debt is not Statute Barred you are likely to two smart options. You should either pay off the debt in full or use a debt solution to gradually pay it off.

The lesser-known third option is a debt settlement offer to pay off around 75% (£1,500) of the debt and ask for the remaining amount of debt to be written off. Some credit card companies will agree just so they access a lot of the money quickly and don’t have to enter into a monthly repayment schedule with you.

2. Individual Voluntary Arrangement 

But not all monthly repayment schedules mean you can’t write off any debt. An Individual Voluntary Arrangement is a legally-binding monthly repayment plan you may be able to use to pay off multiple credit cards.

It is for people in a lot of debt but also people who still have jobs to make much bigger repayments. Debts usually total over £15,000 and monthly repayments are at least £100 for six years. 

But once the six-year period ends, all remaining debt is wiped off. Some people use an Individual Voluntary Arrangement for their credit card debts and manage to wipe up to 85% of the total money owed.

Which Method Should I Choose?

There is no way of anyone telling you which method is the best one without knowing your exact situation, which includes your income, expenses and total debt. It is best to gather this information and seek free debt advice to know what move to make.

UK debt charities can provide this to everyone for free.

Thousands have already tackled their debt

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What Are the Other Options?

Other debt solutions can get you out of credit card debt, despite not wiping any of the debt away. Debt charities will also be able to identify these options for you.

Moreover, if you haven’t yet entered into credit card debt but think it is coming, you might be suitable for credit card consolidation. This is an early strategy to prevent your credit card debts spiralling out of control.

Read more about credit card debt consolidation now!

Learn More About Credit Card Debts, Here!

If you want more useful information to clear credit card debts, stay tuned to MoneyNerd!