I Need Some SIMPLE Advice To Pay Off Our Current Debt...
We will be able to pay off our 30k debt (mostly credit cards) in the next month or two. All of our debt is in collections or close to it. I read about "cutting deals" w/creditors and collectors....do I attempt this when I know we owe the $$$? I don't want to waste our $$ that we'll have to pay off the debt, so I do want to know how to best resolve this. Also, what is the safest, quickest and smartest way to begin rebuilding our credit scores so we can purchase a home someday soon? Thanks in advance for the helpful advice.
I would first pay off everything that is not in collections, or has not charged you off.
After that, call the collection agency's (or wait till dinner time, they'll call you ) Tell them that you have the money to pay it off in cash, and that you will agree to pay it if they agree to remove it completely from your record. no matter what they say, they do have the power to do it.
If they say they can't, tell them to talk to their supervisor...
If your goal is to buy a house, you may be able to do so even if you are in collections or near bankruptcy. It really depends on your scores. If your scores are above 500 I may be able to help. It would also help if you have a steady income and some money in the bank.
Let me know if I can help...
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After reading the post, you said the debt will be gone within two months, so if you have the lump sum to pay the creditor(s) we suggest you have your credit file pulled from the major bureaus. This will give you a current status report. With this report, verify unknown collection attempts. I would contact the unknown groups and request clarity and request the negative information be removed in exchange for an agreed amount. Once you have paid the collection agent dispute the item with the bureau(s).
The goal is to have an updated credit report at the three bureaus. (Process takes about 45-60 days) In the meantime, save a small down payment/reserve. Once the information is updated properly at the bureau your credit scores should be favorable. Finally, once you are out of debt, slowly rebuild and manage your expenses.
Good luck,
Eric and Rosa
[addsig]
Thanks so much for the helpful "how to's." We appreciate it. It's important to us to take care of our past mistakes correctly, and insure that we manage our finances extremely better in the future. It's a difficult lesson, but we're at least sensing we're going in the right direction. Again, thanks everyone for your insights.
Have you considered filing for Chapter 13? For credit purposes its much better than a Chapter 7 (or credit counseling services for that matter) as you will be making your payments, under the approved repayment plan, to your creditors. At the end of the term (usually 3 years) you will have paid off your creditors. Your unsecured debts get restructured. Repayment under a Chapter 13 looks much better than a loan in default for 120+ days for credit purposes.
I couldnt agree with jorge121 more. This sounds like a very solid Chapter 13 case in my opinion.
Make your chapter 13 payments on time for 12 months and you can qualify for an FHA loan with little to nothing down (if you are a first-time home buyer.)
You should at least look into it.
offer 50 cents on the dollar with full removal on all credit reports...no negatives at all. get it in writting before paying.....
They will do it.... if not...wait....next contact offer 45 cents on the dollar same terms.... it works I've done it.......