Consolodating credit cards
It won’t prevent you from getting credit in the future, but for a time some credit products will be unavailable to you and others will come at very steep prices.Also, not all debts can be discharged in a bankruptcy. Collection accounts fall off your credit report after seven years.If you’re already struggling to make your debt payments or your credit cards are maxed out, you may not qualify for a zero percent credit card balance transfer offer.Bad credit debt consolidation loans are available from some lenders but they are costly.The latter might come with a zero percent introductory interest rate, giving you several months or more to pay down your balance interest-free.The best debt consolidation solution is one that simplifies your financial life or lowers your cost of debt, or both.
If you manage to work out a debt settlement agreement, the creditor is all but guaranteed to report your forgiven debt to the IRS. The amount of tax you owe on the forgiven debt depends on your adjusted gross income and your tax rate.
The truth is that having any debt means you are financially beholden to a creditor and you can’t put your money in your own pocket until your obligation is met.
You’ve got several options when you make the decision to eliminate debt.
Debt consolidation makes sense for people who want to make one payment each month instead of several, and for those who can lower the amount of interest they pay by taking the new loan.
You can figure out how long it will take to pay off your debt using a debt payoff calculator like this one from CNN Money.