When you're living on a low income, even a small credit card balance or unexpected medical bill can feel like a financial emergency. Owing money when you can barely cover rent and groceries is incredibly stressful, and as the interest charges pile up and the late fees kick in, that debt can feel impossible to manage. But in today's high-rate, inflationary environment, this situation is not uncommon. Lots of people have fallen behind on their debt payments and are now looking for a way out.

Unfortunately, the path forward isn't always obvious, especially when debt collectors are calling as the bills keep piling up. But the good news is that there are debt relief options that can help, some of which are designed specifically for people in tight financial situations. These programs and strategies can reduce, restructure or even eliminate a portion of what you owe, making it possible to regain control of your finances, all without needing a high income.

If you want to take advantage of what these programs can offer, though, you'll need to know which options you might qualify for and how to access them. So, what are the debt relief strategies worth considering when your income is limited? Below, we'll detail four worth knowing now.

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4 debt relief options you can qualify for with a low income

Here's a closer look at several unsecured debt relief options you may qualify for if money is already stretched thin.

Credit counseling and debt management

Best for: Those who are still current on bills or only slightly behind but struggling to keep up with high interest rates.

Many credit counseling agencies provide free or low-cost services that can help you better navigate your debt. When you take advantage of this option, a certified credit counselor will review your financial situation and may help you create a personalized debt management plan that provides a structured route for getting out of debt. 

One of the main benefits of a debt management plan is that it allows the credit counseling agency to work with creditors on your behalf to secure reduced interest rates and waived fees. While that won't lower the total balance you owe, it can make the debt more manageable on a limited income. And, the nominal fees that are charged for these services may be easier to fit into your budget than the fees that come with other options. 

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Credit card debt forgiveness

Best for: Those who have already fallen behind on payments and have access to some funds (or can save them up) to settle debts.

Pursuing debt forgiveness involves working with a debt relief company (or on your own) to negotiate lower lump-sum settlements with your creditors. If successful, the remainder of what you owe is "forgiven," allowing you to get rid of your debt without paying the full balance owed. This option can reduce your balances by an average of 30% to 50% (provided that your creditors agree to settle). 

However, it's not without tradeoffs. You'll need to either have enough money on hand to offer lump-sum settlements or have enough in your budget to save up for them. And, the debt forgiveness process can hurt your credit score. Creditors aren't obligated to accept an offer, either, and you may face taxes on any forgiven debt. But if you can reduce your debt substantially, the tradeoffs may be worth it, especially if your income is limited.

Credit card hardship programs

Best for: Those experiencing short-term financial hardship but want to keep accounts current.

Many credit card companies and lenders offer hardship programs for borrowers who are facing legitimate financial challenges. These programs can be beneficial when your income is limited because they can result in temporarily lower interest rates, waived late fees or paused payments.

To explore this option, you'll need to contact your creditors directly and explain your situation. Not all lenders will agree to these arrangements, but it's often worth asking, especially if you're trying to avoid falling deeper into delinquency and can provide proof of the hardship you're facing.

Chapter 7 or Chapter 13 bankruptcy

Best for: Those with more debt than they can reasonably repay, especially if they're being sued or face aggressive collections.

Bankruptcy can sound like a drastic approach, and, given the serious repercussions of filing, it can be. But for some people, filing for either Chapter 7 or Chapter 13 bankruptcy is also the most effective way to eliminate overwhelming debt. Both options come with credit impacts, but they also provide legal protections from collections, lawsuits and wage garnishment.

Chapter 7 bankruptcy is designed for those with low income and minimal assets, and if you qualify, most unsecured debts, like credit card balances, medical bills and personal loans, can be discharged completely. Chapter 13 may be an option if you have a steady income and want to reorganize your debt into a three-to-five-year repayment plan. 

The bottom line

If you're living on a low income and struggling to manage your unsecured debt, it's important to know that you're not stuck. From credit counseling and hardship programs to debt settlement and bankruptcy, there are proven ways to lighten your financial load. Each option differs, though, in terms of the relief it can provide and the potential downsides you could face, so take time to consider which one fits your situation. Don't wait too long to act, though. The sooner you get started, the faster you can start building a path toward financial stability.