Some people consider credit card debt bad and mortgage or student loan debt good.
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.
A company will manage the plan and negotiate some cost reductions with your creditors, such as waived fees or a lower interest rate.
You can figure out how long it will take to pay off your debt using a debt payoff calculator like this one from CNN Money.
It’s a great tool to see just how many years it takes to pay off debt, especially high interest credit card debt on which you make a small minimum monthly payment.
Which strategy will ultimately be the best choice for you depends on your own circumstances, and we can’t tell you what to do.
But the option we want to discuss here is paying off debt.
Also, not all debts can be discharged in a bankruptcy. Collection accounts fall off your credit report after seven years.