How can I make one payment for all of my bills that are years past due?
There are several possible solutions to your problem, depending on how old the debts are, your financial situation and how much money you can afford to allocate to your debts each month.
Before you decide how you want to proceed with resolving these debts, you should check to see if your state's statute of limitations for the collection of the debts has expired. A statute of limitations is a time period after which a creditor cannot sue you to collect on a debt. Once the statute of limitation expires, a creditor can still call you to try to collect, and can still report the account to the credit bureaus, but if it sues you, you will simply need to tell the court that the statute of limitations has expired, and the case should be dismissed. To read more about statute of limitations, and to find out if your debts are past your state's statute of limitations, see the Bills.com Statute of Limitations Laws by State page.
If you find the statute of limitations in your state has not expired, you may want to consider your other options for resolving these old debts.
If you own a home, a secured debt consolidation loan may be right for you. This type of loan is essentially a home equity loan which is used to pay off your other creditors. Secured consolidation loans help many consumers by consolidating all of their debts into a single monthly payment with a lower interest rate and payment amount. However, be careful before you borrow money against your home to pay off credit cards and personal loans; you are converting what was previously unsecured debt into secured debt. This could cause you problems down the road if for some reason you are unable to make your payments, or if life circumstances force you to file bankruptcy, as you may not be able to discharge the secured debt as you would unsecured debt. However, secured debt consolidation loans work for many people, so this is an option to consider carefully -- the Bills.com Savings Center is a great resource to help you find a lender for this type of loan.
Another option to consider is a Consumer Credit Counseling Service, or CCCS. CCCS companies offer numerous services, such as financial counseling and budget planning, as well as Debt Management Plans (DMPs). In a DMP, the CCCS would arrange a new payment amount with each of your creditors, usually based on a reduced interest rate. You would then make a single monthly payment to the CCCS which would distribute the funds to your creditors, based on the new payment amounts.
There are several drawbacks to CCCS, though. First, depending on your creditors, it may not be able to reduce your monthly payments enough to improve your financial situation. Second, it may have a negative impact on your ability to obtain a loan, so you may not wish to enter into a DMP if you anticipate any large purchases, such as home or an auto, in the near future. Third, the average DMP takes 5 years to pay off your debts, so you must be willing and able to commit to a long-term payment plan.
You may also want to consider the services offered by debt settlement firms. Rather than making monthly payments to your creditors, these programs negotiate lump sum settlements with your creditors, frequently reducing your debts by 50% to 60% of your principal balances. These programs usually take only 2-3 years to complete, so this is a good option for many people to rid themselves of debt in a relatively speedy manner. In many cases they can also reduce your monthly payment toward your debt.
There is one major drawback to debt settlement programs, though -- they will significantly damage your credit while in the program and for at least a year or two afterward. However, if you are currently unable to afford to pay your creditors, the hit to your credit may be worth the benefit of ridding yourself of credit card debt.
Depending on your income and the type and amount of debt, one of the several options I have described above may be able to help you. I encourage you to explore the Bills.com Debt Help page.
There you can read more about these and other options available to you. We want to help you Find. Learn. Save.