Consolidating debt bad credit rating
You’ve got several options when you make the decision to eliminate debt.If you’re financially drowning, of course you can declare bankruptcy.Some people consider credit card debt bad and mortgage or student loan debt 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.Bad credit debt consolidation loans are available from some lenders but they are costly.They may simplify your payment without significantly lowering your cost of debt.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.Even if you fall in a low tax bracket, you could face a huge bill to the IRS.
Even though you have bad credit, you may still be eligible to consolidate your debt into an unsecured personal loan.
Also, not all debts can be discharged in a bankruptcy. Collection accounts fall off your credit report after seven years.
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.
Credit and you'll receive fair interest rates and flexibility to pay off all of your debts - even if you have bad credit.
Consolidating your credit cards, auto loan(s), and other bills into one fixed rate personal loan relieves the confusion of bill clutter - envelopes piling up on your table, bill collectors calling, and remembering multiple 'Due By' dates.