Posted on June 28, 2009 at 10:33 pm Hi everyone. i just received my credit report and it has hit an all-time low. from an okay score it's gone down to the lowest of the low. i feel really bad about it but what can i do, my hours were cut from work. i owe $17000 on my credit cards and need to pay back all my bills. am open to suggestions on how to consolidate these debts. i'm jst concerned if i can qqualify for consolidation given my awful credit. hope someone can answer. thanks

Posted on June 29, 2009 at 2:04 am Hi, ladylove. Actually, one of the primary purposes of debt consolidation is to help consumers who are in debt, and therefor have bad credit. Of course the consolidation option  is not merely limited to consumers who have gone behind on their bills--some credit counselors actually suggest account holders to consolidate their debts, even if they're in current status."Consolidation" also loosely applies to debt relief options such as debt settlement, credit counseling, and acquiring a consolidation loan.

Posted on June 29, 2009 at 2:39 am One way of consolidation debt is thru filing a Chapter 13 bankruptcy. Thru this, consumers with a steady regular income devise a plan to repay a portion or all of their debts for a three- to five-year time period. One advantage of filing for Chapter 13 bankruptcy is  that you're given an opportunity to save your house from foreclosing. It also allows foreclosure proceedings to cease, and cure all delinquent payments as time passes. Of course you are still required to make timely all the mortgage payments that you're obligated to pay. Another advantage of a Chapter 13 is that it acts like a consolidation loan wherein the bankruptcy filer submits his payments to a trustee, who in turn forwards all the payments to the former's creditors. 

Posted on June 29, 2009 at 4:09 am I agree, CheetosLover, certain aspects of filing Chapter 13 can be advantageous; however, filing for this type of bankruptcy will also entail a bad record on your credit report for seven years. I may also be wrong, but this will also reflect on your public records for as much as twenty years.Another option that is available for you is credit counseling. Here you can get help on budgeting and financial management. Also the credit counselor may offer to enroll you on a debt management plan upon their discretion. When you're enrolled in a DMP, all your debts are consolidated into one loan, and you may pay off your loans for 24-48 months. Interest rates may also be lowered to a more affordable rate for you, and the late fees and other charges may stop once you're in the program.

Posted on June 29, 2009 at 4:41 am Don't go for the consolidation loan. More often than not it may entail putting your house at risk, given that the most common type of consolidation loan is borrowing against your home's equity, also known as a secured loan. Sure, the interest rate may be lower, but once you do that and fall behind on your payments, you may lose your house.It may seem to be such a quick fix to your problem, but think about it, it may do you more harm than good in the long run.

Posted on June 29, 2009 at 5:17 am thank you, everyone. how about bankrptcy, do you think it is the right option for me, too?

Posted on June 30, 2009 at 2:29 am well they did say earlier that bankruptcy wasn't so good. because of its effect on your credit report and public record..... it can help you in the short term but the long term effects are harder to deal with.... ive been there myself so i know.... and creditors charge me higher interest rates AFTER bankruptcy when they found out that i filed previoulsy...

Posted on July 22, 2009 at 4:33 am Debt consolidation companies aren't choosy as far as I know, especially in terms of credit. I may be wrong but credit counselors in particular prefer accommodating clients who have a steady source of income, so that they may be more consistent in paying their bills.If anything, I would recommend using credit counseling as an option for debt consolidation for people with bad credit. That's because it allows you to lower your interest rate and still be able to make payments on your loans. I also like the convenience of the one-time payment for all creditors. Of course in everything there are disadvantages and I know that it takes five years before the loans are paid off.... I guess that means you'll stay longer in debt until you have had everything paid off.

Posted on July 22, 2009 at 11:47 pm If consolidation loan and bankruptcy are not very good options for people with bad credit then what is?

Posted on July 23, 2009 at 12:35 am There is credit counseling if your debts are not that large but the interests are very high and then there is debt settlement if your debt amounts to $10,000 and up and you are past due on your accounts.