Consolidating debt for

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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.

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.

Once an account is included in this type of program, the creditor will close 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.In reality, credit card debt forgiveness is rare and tricky, and can be very costly. Then you have to convince your creditors that you don’t have the means to repay your debt and your situation isn’t likely to change.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.

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