Settling Credit Card Debt

• 

  got it posted: 15 May at 7:36 am

  I would only wake up one company at a time.

• 

  CatDad posted: 15 May at 8:04 am

  It’s too late to catch up now….after 6 months of non-payment your creditors are required by law to close and charge-off your accounts as bad debt.
  - When a credit card is charged-off as bad debt, you need to understand that the damage to your credit is already done and there is no undoing it. Don’t make the mistake of simply cutting a check to whatever collection agency has the debt for the charge-off and assume that your credit rating will be magically restored…Doing so will not remove it from your credit reports. It will simply be updated to a “Paid Charge-Off,” which, while slightly better, is still a seriously derogatory item. Per the Fair Credit Reporting Act, a charge-off, whether paid or not, can remain on a consumer’s credit reports for up to seven years. This does not mean that you will have bad credit for the entire 7 years though.

  - Renewing contact with debt collectors out of the blue for old credit card debt can stir up all sorts of problems. It’s my position that a tiny increase in your credit score is not worth the risk of triggering aggressive collection activity against yourself. Your effort could be met with threatening, abusive collection calls…threats of lawsuits…and once they find out that you are willing to pay they will probably add on all sorts of fees and they’ll come after you for two or even three times the original amount of debt. Even worse, they might decide to take you to court to try to get a judgement against you for the debt…leading to possible wage garnishment of 25% of your wages.

  - There are two reasons that you may want to consider paying back a charged-off account:
  1) You are applying for a new mortgage, loan or apartment and the creditor is insisting that all defaulted items be paid off
  2) There is a confirmed lawsuit pending on the debt

  If neither of these apply, then it’s often best to take a “Don’t Ask/Don’t Tell” approach…just sit tight and let the charge-off fall off your credit report naturally in 7 years. The main damage of the charge-off to your credit should be over in 2-3 years.
  ————————————
  If you’re going to pay off old-charged-off debt anyway, then you might as well negotiate the lowest, rock bottom settlement you can possibly get, being that the negative charge-off notation is going to stay for 7 years on your credit report, regardless of whether the charge-off is paid or unpaid. …Offer 25%

  DO NOT admit in writing to owing the debt…if you do you might trigger a lawsuit against yourself. Mail them a vaguely worded statement like:

  I am willing to settle this matter for 25% of the original amount. This is in no way an admission of this debt, but rather an attempt to settle this matter. Your firm must send me a written agreement on your company’s letterhead that you will accept this amount as “payment in full” and that this issue will be settled. Upon receipt of this agreement, I will mail you a money order for this amount.

• 

  Matthew posted: 15 May at 8:05 am

  You know my wife and I were deep in debt for so many years and we even tried some debt consolidation agencies, but they are all out there to make some money. I will tell you what, getting debt paid off is hard sometimes but is very possible. I got my Bachelor degree in Finance for this specific purpose. To reduce our debt. I have written an article that is all about getting rid of that debt and I hope you take a moment to read it. This reduced our debt to zero within a couple years. If you are looking for quick debt relief the only thing that will happen is further debt by getting loans or paying someone to take care of it for you. Don’t do that, it is all right in my article what you need to do and the best part is that it is totally free advice. Can’t beat that. I speak from experience. My knowledge today comes from trial and error. Good luck.

You must be logged in to post a comment.