Credit And Debt Counseling Charge Off

I havent paid my bills in like a year. My credit report says they're charged off as a bad debt, and there are 3rd parties trying to collect on the debts. I have come into steady income and I would like to repay the debts. The 3rd party collectors want lump sum settlements and don't want payments. Can I use a consumer credit counceling service to setup a payment plan to pay these debts off? Or is it too late for that? I was considering a chapter 13 to get everything straightened up and on plan, but my coworkers think that's a bad idea since I will not be saving any money from the chapter 13 as far as my financial numbers work out. (disposable income vs total debt after 5 years of payments).

I think one of my creditors (discover) may be preparing to sue me. They issued a complaint to a local courthouse, but the sherrif hasn't been able to track me down to serve the papers yet.

I do this for a living, let me try to help. First, let's take a look at your overall goal, then I will attempt to get you there. 1. you want to avoid a suit. 2. you want to pay your bills 3. you want to repair your credit. Is that the correct order? This is a business, you need to approach the situation with the mind set of 'what makes a good business decision for everyone'. 1. Contact discover. Start with that bill since it is escalating. Offer them a monthly payment AND STICK TO IT ! Make it low enough to be affordable yet high enough to make it worth while. In other words, why would they involve the cost of suit if you are willingly sending them money? Another approach, arranged with them in advance, is to pay them a large upfront payment, to get their attention and show your sincerity, then small monthly payments. Again, it must be high enough to be cost effective not to sue and garnish. 2. Paying your bills can be done easily BUT since you are making efforts to improve your credit, get the most out of it. Consumer Credit is a great organization to assist you with budgeting, getting the bills paid and overall, improving your credit. In addition, as long as you are enrolled and following the program, the suits and garnishments will stop. So, this may be an option for you. However, if you can work it out with Discover, and you can create and follow your own budget, you won't need Consumer Credit. About what the bill collectors want: I want a BMW sport convertible, but lets be reasonable. Send the payment arrangement that works for you. Something is better than nothing. 3. If you are able to pay your bills, avoid bankruptcy. It will haunt your credit for a long time. You can pay your bills and repair your credit at the same time. Even on a budget, DO NOT settle for less on accounts if you don't have to. This eliminates advantages for you down the road in repairing your credit. You can approach it from paying one bill at a time or small payments to everyone. However, in advance, you should work out an arrangement with each so as to achieve the goal of deletion from your credit report, once paid in full. This is done with a lot of work on your part. I hope I have helped. The fact you are now in a financial situation to correct the past year's downfall is great. My hope for you is that you get the best credit available under the circumstances. Please feel free to email me with any additional questions. I am happy to assist you.

2007-08-21 11:01:53 by vort3xyz

To get an R9 charge-off removed from a credit report, dispute inaccurate charge-offs, try to settle the debt with the lender, or simply wait for ...

I am a 20-yr old student, halfway through college. When I began college, I recieved all of those "college" credit card offers mailed to my house. I made the mistake of not cutting up the cards and just threw them away and now someone in my family has used the cards to rack up between $15,000-$20,000 of debt in my name. I do not wish to press charges on them since they are in my family, and my creditors have told me that is the only way I can claim "fraud" on the accounts.

Now I have 4 credit cards in my name that are 6 months or more overdue in payments and I only work part-time at a daycare since I am in school. My parents/relatives will not loan me the money, nor can I drop out of school to work full-time. Creditors are calling me day and night and I just do not have the money to pay off this huge debt. What is my best option? Credit counseling? Debt Management? Bancruptcy? I know there is no "ideal" option but what can I do that would cause the least harm to my credit & future?
I can only afford to pay my creditors about $400 a month total. I would like to avoid bancruptcy at all costs because my fiance and I would like to get married and have kids in the next 7 years and even though he has good credit, mine will prevent that if I declare bancruptcy.
The family member who accumulated the debt will be paying me back eventually but this might not happen for awhile.

Also, I have already spoken with my creditors, they cannot come to an affordable agreement with me.

Credit counseling and debt management courses are really only of use if you've got real income. You don't. So you're going to need to try something else.

Dropping out of school to work full-time is not a realistic option. If you really do have $15,000-$20,000 in credit card debt then you're in pretty big trouble. At an average credit card interest rate, even just paying the minimum would take about $300 a month for 20 years and cost north of $70,000 dollars by the time you've paid it all off. As any job you're likely to be able to get without a college degree isn't going to pay much more than $20,000 a year, you'd wind up having to spend $3600 a year just on debt management, and you'd have to do that for 20 years. You can't afford that. No one can.

Bankruptcy might be an option, but not a particularly attractive one should you want to keep going to school. I assume that you've got student loans and will need more to stay in school. Lenders will be extremely reluctant to loan money to anyone who as declared bankruptcy, especially someone as young as you are. So while that could conceivably eliminate a lot of your debt, it would almost certainly permenantly damage your credit.

It's also not a given that you could even declare bankruptcty. The rules for doing so were recently tightened by Congress. I don't know the exact details of your situation or if you'd be affected, but it's harder than it used to be.

As unpleasant as it sounds, I believe that declaring fraudulant use of your cards may be your best and, in fact, only option. You yourself did not run up the charges on the cards. Your family used the cards without your knowledge, knowing they were screwing you over, and are now unwilling to help you get out of the mess they put you in. Any loyalty to the person who did this to you is entirely misplaced. While it's true that you don't generally want to level fraud charges against your family, it's also true that you don't generally want to defraud your family.

You need to get in touch with your credit card companies and tell them that your cards have been used fraudulently. If you can tell them who did it, they'll go after the fraudster themselves, more than likely. You may need to get in touch with a lawyer to prove that it really wasn't you who ran up these debts. Either way, this sounds like the only way that you're going to ever be able to get out of this mess.

2006-08-16 05:00:05 by allielivez

I owe right about 70K. My husband and I have tried to protect my credit for years, but now since I am out of work and have been for the last 10 months, we cannot pay them. If I am going to have to go to consumer debt counseling, I would rather just have them charged off and start over anyways using just cash. I owe amex 20K, bank of america 20K, and some other little ones. If I kept the little ones, would they hike my rates up just because I was behind with the others? Just trying to get my options straight. Worst case scenario is all. Thanks.

I would file for bankruptcy if I were you. There is no point in trying to pay them off if you don't have the money to. Make sure you file for the chapter that rids you of the debt rather than makes you pay it off with no interest. I think that is Chapter 7, but I am not 100% sure.

2008-10-18 00:25:55 by mymeeeshell

It sounds great, I "only" have about $9k in credit card debt and it should be payed off in 3yrs. Right now I have very little money left after paying minimum payments each month. I will have $145.00 extra each month. However, I've looked into several credit reporting agencies FAQ's and they state that this may hurt you because the CCC agency will be "negotiating" your interest rates, which means you are not paying the entire debt that you agreed to off. I have enough negative items on my credit report so I dont know if this will put my good accounts into negative if i have to close them and then CCC ageny will also note that I am under a debt mgmt program. Any advise, my only alternative would be a consolidation loan, but i doubt i would qualify?

Don't do it. Credit Counseling hits your scores harder than filing bankruptcy. They effectively crash your credit back to the way it was before you had credit. And besides, the only counseling companies that really can help you are free and non-profit. But they will tell you exactly what the previous poster and I told you unless you have over $15k debt and make minimum wage.

$9k isn't all that much. Just pay your minimums until you can afford to pay more. Maybe get rid of Cable TV and Internet connection for while so you can get at least one card payed off. Get rid of Either cell phones, or home phone bills. After that, use the money you were paying to the the first card to pay more on the next card. Pay them off in order of highest balance first. And keep snowballing them until they gone.

Snowballing = Pay one off then use the extra money to pay off the next. Then use the extra money saved from the first to pay off the next card, and so on.

2007-09-20 10:28:10 by swtval

We have a lot of personal debt brought on by poor choices and a little hard luck over the past several years. We are all employed (me, hubby and 20-something son) finally and making enough to pay the bills and eat, etc but the "damage" is already done on the 'ole credit report - going from approximately 780 to 511. I will not go the bankruptcy route as I do not see that as a viable option for me, however, my question is, since the FICO # has fallen so low now, should I just go ahead and go w/ debt settlement company to help me get these bills paid off or continue with the "snowball repayment" plan I worked out for us. In the past 5-6 months, I have already paid down $6000 in debt using the snowball but I did see an $11 K charge-off by a creditor appear on my credit report this month so, that pretty much sinks the ship so to speak. Thanks for your good advice!

I personally wouldn't go the credit counseling/debt settlement route. You are basically paying someone else to do what you already can do for yourself. I went through the same thing (finishing up the last of the recovery) I droped from 710 down to 465. I am back at a 630. I saved money, and called each individual collector and settled on the account with them. If you cal the collectors they would rather settle than see nothing at all. Once they appear on your report, they know the damage is done, it's easy enough never to pay them. My advice, save and settle. Most collectors will usually settle the debts for half the amount provided you pay the day you call. This would allow you to pay them off for less of a cost to you and help clear up your credit bureau. Hope that helps.
ps. when you settle have the collector send you an email with the agreed upon terms before you give them any information on electronic payment. This covers your backside from them trying to cash more than what was agreed.

2007-08-04 03:05:13 by dede_mcm