Credit repair / dealing with old debt. anyone help me?

Edwards Finance > Debt Recovery

Q. I am hoping there are some people in this forum that can help give me advice as to how to fix my credit the best way possible. I have searched the internet for tips but they seem more geared for if your credit problems are in an erlier stage. I'm 24 and have had various health problems and was out of work for a couple years and am just now dealing with debt from 4 credit cards and a few other things (medical bills, orthodonic work, cell phone, ...). I have put off contacting all these companies for two years or so. My total debt is somewhere around $15k. I don't have much money right now, but it is possible (depending how my work goes) that starting next month I would be able to put $500 a month toward my debt. If things go really well, then each following month I would be able to put more and more money toward my debt. It's hard to predict though because I am fairly unstable right now and keep thinking I don't want to live anymore. I today called my 4 old credit card companies and found out what collection agencies are being used. I talked to one agency today and the others were closed (i called too late in the day). The one I talked to told me a few things: 1) since they have now spoken with me, I have until the end of the month to settle the account, 2) the best they could do is to split payments up over 3 months toward a lower settlement, 3) if I didn't decide on a payment plan while on the phone then my credit card company would likely contact them and take over the debt and it would reflect a bit worse on my credit (i'm not sure I understood this right). i told them i didn't care and then she said she could put a 24hr hold on my account. that is were it sits now. 4) to pay each credit card debt off individually (because the monthly payments are high and from different collection agencies). 5) bankruptcy is not a good option. the lady told me she had to file bankruptcy 11yrs ago and still can't get a credit card - i have a hard time believing that, but i don't know for sure. Here are my current concerns and questions that I can think of: What does somebody knowledgable about credit repair think of what the lady working at the collection agency told me? Does it matter who I call in what order? It looked like at least one of the credit card debts has been passed to two different collection agencies and I wasn't sure which was first. I haven't talked to either one yet. How could I get an idea as to how different options would effect my credit rating? Like paying a settlement ammount vs total payoff for one of the cards. What about settling for lower ammounts on all of them? What about bankruptcy (my credit score is already really low and it would be better if I could put money toward my health)? I at one point did have all my credit cards being managed by a non profit organization called Christian Credit Counselors. Once my money ran out (after i stopped working) I wasn't able to keep that current and then my accounts went to collections. I called C.C.C. today but they said they can't help with consolidation once things go to collections. Are there other organizations that could help me consolidate into one monthly payment?

A. Negotiate. The collection agency is talking about their initial offer, not any law. And don't trust creditors to remove dings from your credit unless you get their agreement IN WRITING to do so before making any payments. Were I in your position, I'd try to get them to clean up my credit *BEFORE* I give them the payment, using an escrow agent who will turn over the payment only after the dings are removed. I don't know whether that's possible or not. I'm also not sure whether it is possible to get an agreement that as far as credit reporting is concerned, the account in question *NEVER EXISTED* (and therefore was never late). Your credit will get worse the longer you leave the debt unpaid. In your situation, this is pretty much unavoidable for a while, but at least you are trying to clean it up. There is nothing wrong with choosing the debt you got the best deal on and paying that off first. It's a negotiation. Make sure you only pay the one currently responsible for the debt. If you call both of them and they don't agree on who is currently responsible for handling the debt, don't pay either until they do. Short term, you don't need credit much, and your credit rating will suck. A few points either way in a credit score won't matter. You may be able to negotiate what the report will say. I think I have heard of someone managing to pay off 50 cents on the dollar and the credit report now shows 50 years of on-time payments that were never actually made (by someone under 30 to a company that didn't exist 50 years ago) and no late payments. The *number* of payments shouldn't be a big deal. It's the amount of them that matters. In general, given a choice of several cards to pay off, put money towards the one(s) that will avoid the most expense in terms of late fees, penalties, interest, etc. You're well beyond the point where you can make minimum payments on everything, then put any extra towards the card with the highest interest rate + late fees + penalties, since chances are they've all declared the balances immediately due. If one card will let you pay 50 cents on the dollar if you do it over the next 3 months, and the others are demanding payment in full, and you've got the money, take the deal.

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