Suze orman and consolidating debt
One important caveat: When you negotiate a lower payment, the IRS usually counts the forgiven amount (what you're not required to pay) as income, which means that you'll owe taxes on that money.Q: I've got ,000 in credit card debt, ,000 in student loans, a car payment and an interest-only, variable-rate home loan that will adjust in two and a half years. How will I ever be able to save for today, for retirement, for my sons' futures? A: Your overriding goal must be to stay current on all your monthly debt.When you find full-time work in your chosen field—and you will, stay positive—you can revisit buying a home.Q: My husband and I are working our way out of more than ,000 in credit card debt.Q: Since completing a Chapter 13 bankruptcy eight years ago, I've raised my credit score from 300 to 689, bought a house and a used car, and saved ,000.But recently, two collections for forgotten medical bills hit my credit report and dropped my score by more than 80 points. A: I generally encourage people to make good on debts when they have enough money to repay them.(We didn't pay our bills until we were about to be sued.) We've settled one balance for ,000, and we're in the process of reducing another one.
Step 3 – Add up all your minimum payments plus added for each card.But once a delinquency has been reported to a collection agency, paying it off won't help your FICO score.The damage has already been done, and the blemish will remain on your credit report for seven years.A: Your settlement was merely the second strike to your credit—the first was your delinquency.Honestly, I wouldn't look for a quick fix for your score right now.