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Which debts can be consolidated?

Debt consolidation is often used by people with multiple high-interest credit cards with high balances. But credit cards are not the only type of debt that can be consolidated. All unsecured debt, as well as a few special types of secured debt, can be consolidated.

Debts that can be consolidated:

  • Credit cards [1]
  • Retail card bills [2]
  • Department store cards [2]
  • Gas card bills
  • Student loans [3]
  • Unsecured Personal Loans (or "Personal Signature Loans")
    Loans for which you were not required to execute a security agreement or mortgage.
  • Pay day loans
  • Personal Lines of Credit
  • Finance company loans
  • Medical bills
  • Hospital bills
  • Court judgments, when not yet enforced
    Court judgments that have not yet been enforced through collection remedies such as garnishment or attachment.
  • Back rent
    (except in states that allow landlord liens)
  • Utility Bills (telephone, electric, gas, cable, and other utility bills)
    If you are late paying your bills, the company may disconnect your phone or utilities. However, they are not entitled to any of your assets or belongings.
  • Cell phone bills
  • Home Improvement Loans (only in some cases)
  • Auto Repossession Overage Balances
  • Short Pay Mortgage Balances
  • Income taxes [4]
  • Any other type of loan or credit that was extended without a collateral requirement
  1. Unless the bank required you to post property or cash as collateral for debts incurred on the card. But this not the common case for credit cards.
  2. Unless the department store claims a security interest in all of the products and goods you bought with the store credit card. Be sure to check the fine print of your department store card agreement to see if this applies to your case.
  3. Unless the student loan is federally-insured, in which case the Department of Education can garnish a percentage of your disposable income without a court judgment.
  4. Unless the taxes due have gone into collection and become subject to a governmental lien. If this is the case, refer to "IRS Debt" in the secured debt category below.


Debts that can NOT be consolidated:

  • Mortgage
  • Home Loans
  • Home Equity Lines of Credit
  • Auto Loans (new and used)
  • Boat Loan
  • Recreational Vehicle Loan
  • Government Loans
  • Lawsuits
  • IRS Debt and Back Taxes
    IRS debt is often secured with the filing of a Notice of Federal Tax Lien.
    Only an Offer in Compromise might allow you to settle your tax debt for less than the full amount you owe.