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.
You should get free debt advice before you consider taking out a secured debt consolidation loan, as they’ll not be right for everyone and you could just be storing up trouble or putting off the inevitable.
Before you choose a debt consolidation loan think about anything that might happen in the future which could stop you keeping up with repayments.
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.
There are two types of debt consolidation loan: Debt consolidation loans that are secured against your home are sometimes called homeowner loans.
You borrow enough money to pay off all your current debts and owe money to just one lender.
As you weigh the pros and cons, keep in mind that timing is critical.
With just a few exceptions, you get only one chance to consolidate with the government loan programs.
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.
Also, not all debts can be discharged in a bankruptcy. Collection accounts fall off your credit report after seven years.