Consolidating debt a good

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.

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At that point, the delinquency stops affecting your credit. Your credit suffers tremendously in the meantime, and since you’re still legally obligated to pay the debt, a debt collector can pursue you until the statute of limitations runs out in the state where you live.

Which strategy will ultimately be the best choice for you depends on your own circumstances, and we can’t tell you what to do.

This statement may be viewed negatively by lenders who manually review your report.

Programs like this may lower your monthly bills, but because you are not re-paying the full amount owed on your accounts, your creditors will likely report those accounts as “settled” or “settled in full for less than the full balance.” Because it indicates that you did not pay the account as agreed, a status of settled on your credit report will impact your credit scores negatively, even if there are no late payments on the account.

Debt is costly and can prevent us from reaching financial goals (or at least prevent us from reaching them when we’d like to).

Some people consider credit card debt bad and mortgage or student loan debt good.

But the option we want to discuss here is paying off debt.

You may have heard that some creditors are willing to settle your debt for pennies on the dollar.

Even one late payment will have a negative impact on your credit scores.

Before entering into any debt consolidation plan, research the offer to make sure that the company is reputable and that you fully understand the terms and implications of the program.

Even if you fall in a low tax bracket, you could face a huge bill to the IRS.