Is consolidating your debt a good idea

Haring holds a Bachelor of Journalism from the University of Missouri.

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

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

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.They will instruct you to stop paying your bills, which leaves you open to lawsuits by your creditors.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 problem is that bankruptcy is a serious derogatory mark on your credit.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.

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