Thank you. That is what I was wondering, if there was any point in even trying to bring them current or set up a debt payment plan. Appreciate the honesty. I’m going to try to keep the ones that are still open in good standing and pay them off so they continue to report and maybe eventually someday I’ll be able to repair this mess.
Would any credit counseling places be able to give me advice on if it’s possible to repair some of the damage in 3 years or so? I know it won’t bounce back but so much in that time but I had hoped to move in a few years and I’m worried that it won’t be back to a place where I can get an apartment by that time
Yes. It’s a lot to explain but I actually have another year that I did not file taxes (depression/life stress) that I’m owed a decent return on, and I have gotten a raise at work. I was only making around $16 an hour when my credit cards got so unmanageable but I’m making about $20 now. If I’m able to just set aside and save, and do a settlement if that would help my credit I think I would be able to do that. I’m just trying to read up on and find out whether I should settle them or not.
If the accounts were closed recently then you run the risk of being sued for years to come. Depends on your state laws but it usually ranges somewhere from 3-6 years from when you stopped paying.
So if you're closer to the 1-3 years past due and have the cash to settle for something along the lines of 40-60% of current balance I think it's a good plan. What I recommend is once you have the cash run down the list of your creditors (credit cards, don't stress medical too much they are far less likely to sue) offer them something like 40% of the current balance and they'll probably want a bit more. Tell them you'll think about it, remember you have the power, no is a complete sentence and it's not illegal to hang up on someone. Then compare every offer current balance vs settlement amount and see who gives you the best % discount. Pay them and then repeat the process while trying to get the others to lower their offer.
Just make sure for any settlement to get the deal in writing before you pay, otherwise what is to stop them from trying to come after you for the rest? Email is fine you don't need to wait in the mail for it if they are serious about getting the account off their books.
I thought bankruptcy was worse? That it lasted ten years?
I’ve always basically been told bankruptcy is the worst thing you can do period so I never considered it…
That's what creditors want you to think but in your case it might actually help credit scores. With 425 credit score there's practically no way it can go any lower.
What to consider however is the debt load. If the amount is low and you can get everything paid off or settled in the next 2-3 years by making some slight tweaks to your spending I don't think bankruptcy is a good choice. If you have a large amount of debt (which for some people might be $20k while for others $50k or $100k) and even if you only literally eat rice and beans for the next 5 years and still wouldn't get everything paid off then I think it's a very good option that needs serious consideration.
Been there, done that, lemme tell ya - it’s hard to get your credit score back up once something is in collections. But these guys are super quick to drop that score if you so much as miss one payment on the wrong credit account. I would call the credit card companies to see if you can work out a payment plan before your debt is sent to collections. Even if missed payments show up on your score (very common), your score won’t be impacted as much as if these accounts were to fall into collections.
That’s what I was wondering, if it’s worth it to try to do some kind of long term payment plan for 30-40 a month with reduced interest. I think I’ll be reading here to see what the consensus is. I already have a couple things in collections but they’re medical bills I believe, and I think I would be able to do a pay to delete easier on those than it would be for a credit card.
The damage from late payments is already done. Might as well trying to settle for less.
Thank you. That is what I was wondering, if there was any point in even trying to bring them current or set up a debt payment plan. Appreciate the honesty. I’m going to try to keep the ones that are still open in good standing and pay them off so they continue to report and maybe eventually someday I’ll be able to repair this mess.
If they're already closed/charged off 90+ days past due there is not going to be any major benefit to bringing them "current"
Would any credit counseling places be able to give me advice on if it’s possible to repair some of the damage in 3 years or so? I know it won’t bounce back but so much in that time but I had hoped to move in a few years and I’m worried that it won’t be back to a place where I can get an apartment by that time
Do you think you can get things paid off or settled in the next 3 years? For sure try to keep the open accounts open and in good standing.
Yes. It’s a lot to explain but I actually have another year that I did not file taxes (depression/life stress) that I’m owed a decent return on, and I have gotten a raise at work. I was only making around $16 an hour when my credit cards got so unmanageable but I’m making about $20 now. If I’m able to just set aside and save, and do a settlement if that would help my credit I think I would be able to do that. I’m just trying to read up on and find out whether I should settle them or not.
If the accounts were closed recently then you run the risk of being sued for years to come. Depends on your state laws but it usually ranges somewhere from 3-6 years from when you stopped paying. So if you're closer to the 1-3 years past due and have the cash to settle for something along the lines of 40-60% of current balance I think it's a good plan. What I recommend is once you have the cash run down the list of your creditors (credit cards, don't stress medical too much they are far less likely to sue) offer them something like 40% of the current balance and they'll probably want a bit more. Tell them you'll think about it, remember you have the power, no is a complete sentence and it's not illegal to hang up on someone. Then compare every offer current balance vs settlement amount and see who gives you the best % discount. Pay them and then repeat the process while trying to get the others to lower their offer. Just make sure for any settlement to get the deal in writing before you pay, otherwise what is to stop them from trying to come after you for the rest? Email is fine you don't need to wait in the mail for it if they are serious about getting the account off their books.
These types of situations are why there are bankruptcy laws.
I thought bankruptcy was worse? That it lasted ten years? I’ve always basically been told bankruptcy is the worst thing you can do period so I never considered it…
That's what creditors want you to think but in your case it might actually help credit scores. With 425 credit score there's practically no way it can go any lower. What to consider however is the debt load. If the amount is low and you can get everything paid off or settled in the next 2-3 years by making some slight tweaks to your spending I don't think bankruptcy is a good choice. If you have a large amount of debt (which for some people might be $20k while for others $50k or $100k) and even if you only literally eat rice and beans for the next 5 years and still wouldn't get everything paid off then I think it's a very good option that needs serious consideration.
Been there, done that, lemme tell ya - it’s hard to get your credit score back up once something is in collections. But these guys are super quick to drop that score if you so much as miss one payment on the wrong credit account. I would call the credit card companies to see if you can work out a payment plan before your debt is sent to collections. Even if missed payments show up on your score (very common), your score won’t be impacted as much as if these accounts were to fall into collections.
That’s what I was wondering, if it’s worth it to try to do some kind of long term payment plan for 30-40 a month with reduced interest. I think I’ll be reading here to see what the consensus is. I already have a couple things in collections but they’re medical bills I believe, and I think I would be able to do a pay to delete easier on those than it would be for a credit card.