It’s a great tool to see just how many years it takes to pay off debt, especially high interest credit card debt on which you make a small minimum monthly payment.
You can get rid of credit card debt in several different ways. You can also take out a home equity loan (or a cash-out refinance) from your mortgage lender, or you can open a new credit card and transfer the balances over.
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.
The plan is designed to get you out of debt in three to five years, after which all of your accounts should be reported as paid-as-agreed.
If you’re financially drowning, of course you can declare bankruptcy.
The problem is that bankruptcy is a serious derogatory mark on your credit.
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.