Debt Problems
How to fix a credit card/debt problem?
Over a year and a half ago I was experiencing some difficulties in life and I also had to move. I ended up maxing out some of my first credit cards and got caught up in payments and never pulled through. I am not sure what the total of my debt is. It is probably about 1600 all together. The company I was with ended up getting bought out eventually, and eventually I got sent to collections. I heard people say that for that amount they're not going to sue me or anything but I'm not sure. I am still not financially stable otherwise I would've paid it off but I'm willing to try to work something out if it's for my benefit. Do collection agencies settle for a lesser amount or work out payment plans? I've heard people say not to bother paying them off for such a small amount because it will stay on my credit report for a while either way and it won't look good either way. Anyone have any tips or suggestions?
Public Comments
- It is always best to pay off your debts. If they really wanted to come after you they could garnish you wages. It will also stay on your credit for 7 years. If in the next 7 years you want to buy a house a lender will not give you a home loan with ANY bad debt. Call the collection agency. They will either work out a payment plan or accept a lump payment for a fraction of what the debt is. On $1600 you could prob settle with a payment of $800-$1000. Good Luck!
- I heard on TV or in the papers or Internet that those credit fix companies are a scam. You pay them money and they don't pay any one, they hold onto it, maybe even use it, as long as you keep paying they wright it down and in the end, they pay everyone. Of course they take a cut of it along the way and you end up paying longer. So be careful.
- They will sue you for any amount because they will tack on all kinds of late fees and additional interest. For such a small amount you would be better off to contact whoever is collecting them and pay them off. It's not worth totally ruining your young credit, because it is very hard to rebuild and takes a long time. Please for your future sake and to prevent being sued and having to pay court fees on top of everything else, pay your debts off.
- You need to do your best to pay this debt or work out an agreement with your creditors. There is a very reputable agency called Consumer Credit Counseling Services. I'm assuming you're in the U.S.; you just said your debt is "1600" so I'm assuming that's $1600. Consumer Credit Counseling Services is a not-for-profit agency which helps people with credit problems solve their debt problems. They don't charge you a fee; I believe they are supported by the government or maybe by the credit industry. Creditors would rather have partial payment than no payment, and would rather get their money sooner by cooperating with you rather than later by having to hire collection agencies and/or lawyers, so it's a good deal for everyone. A counselor will sit down with you and examine your current debt, income, expenses and help you establish a budget you can actually live on while paying off your debt. They can negotiate terms with your creditors that will help you. Good luck!
- I myself had a horrible run in with negative debt. Trust me when I say that credit repair is the only truly effective way to remove that debt. The company I used is totally legit and does everything by the book. Case in point...my score 10 months ago was 410. I suffered through a failed restaurant effort. I have had 36 derogatories removed. My score is now 770. The company uses loopholes to in the system to force the bureaus to research the negative debt. If the debt is unverifiable (and most are) it is removed from your credit report. That's it, it is that simple. Hope it all works out for you.
