Nonprofit debt consolidation companies help your with unsecured debts, like credit cards. Their services include counseling and debt management plans.
They approach debt management differently than for-profit organizations.
Watch out for scams with either type. Nonprofits should not ask for upfront fees or give you a sales pitch from the beginning.
Upside-down mortgage relief comes in a few forms. Which is best for you depends on if you want to stay in your home or walk away.
If you are underwater and have negative equity you can work with your bank to modify the loan or reduce the principal. You probably can’t refinance.
If its best to leave your home then you should consider a short sale rather than let the bank foreclose. Bankruptcy is also a better alternative.
Chapter 13 stay foreclosure immediately, while a mortgage modification get provide lower monthly payments and eventually stop the process.
You should file for bankruptcy if you have back payments that you can’t make.
You can modify your loan while you are in bankruptcy, and sometimes that is the best thing to do.
The IRS does have tax debt forgiveness programs under the Fresh Start Initiative.
Partial Payment Installment Agreements require income payments over time. Offers in Compromise take assets one time to pay obligations.
Both may reduce or forgive various amounts of your tax liabilities.
Does bankruptcy clear IRS debt? Courts do discharge tax obligations. How much depends on how much you have and how much you earn.
There is a 10 year statute or limitations for most tax liens, but authorities will probably levy your assets before then.
Only the federal government may garnish your 401(k) funds.
If you take money out of your retirement accounts to pay debt you pay fees and taxes. Each type has its own exceptions for different hardships.
Only use retirement savings if its a dire emergency, though. You limit compounding and take away your retirement funds.
If you have trouble paying your student loans, don’t ignore them and hope they go away. They won’t
Talk to your lender about changing the loan terms. Also, look into forgiveness programs.
Credit card refinancing vs. consolidation depends on how much debt you have, how good your credit is, and how how much income you have.
Both only address symptoms of your problem, though. Interest rates and loan terms aren’t the real issue, debt is.
The Mortgage Forgiveness Debt Relief Act excludes qualified loan forgiveness.
The IRS does count forgiven liabilities as taxable income, but you can avoid these with proper tax planning.
If you consolidate credit card debt on your own you may lower your credit scores for a short time, but its worth it to pay off your balances.
You should pay off your revolving debts or consolidate them.