Consolidating credit card debt student loans
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.They may simplify your payment without significantly lowering your cost of debt.A great way to consolidate debt, especially if you have bad credit, is to enroll in a debt management program, which we’ll discuss in a moment.If you want to pay off debt fast, the best way is a two-pronged approach: Debt consolidation means taking out one new loan large enough to repay some or all of your outstanding debt.
The best debt consolidation solution is one that simplifies your financial life or lowers your cost of debt, or both.
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.
Debt consolidation companies like National Debt Relief and Freedom Debt Relief offer to help you through the process for a fee (eating into your savings).
They will instruct you to stop paying your bills, which leaves you open to lawsuits by your creditors.Even if you fall in a low tax bracket, you could face a huge bill to the IRS.