we want 2 be out of debt!

[no_cheez_4me]

What is the name of your state? Vt

hello,
my fiance and i have been together for 6 years. She moved in with alot of bad credit and alot of bills, most of her debt she aquired while she still lived in NY (dont know if this makes a diff).

she tried paying them but because of interest, we were literally throwing the money away. And a big goof up with an over drawn bank account sent us tumbling down.

We were so over spending with all the cards. The interest would keep it boarder line, so when the yearly fees came, it would put us over our limit. Or if it was a day late we'd get a late fee. And it was just going on like this over and over. So she stopped paying them. Figured in a few years her credit will get better.

We want a home, called today in hopes of a loan. But hey guess what the morgage lender told us? Basically that once the SOL gets close, the business sells your debt (which we knew) but when you dont pay them, its again a new fresh mark on your credit. And we were also told that alot of times going to those non profit companies that help you with consolidating, is almost as bad as filing bankrupt. Because once the credit is paid off, it takes 7 years/establish your credit.

We have a credit report coming in the mail. But what we need to know is, there are sooo many credit cards, from small amounts to large amounts, ranging from 400-5000.00. Once we get the credit report, where do we start? how do we know if we're going to be paying debts more than once? Do we pay off a charged off debt? I know for a fact that fingerhuts debt is on there 2 times, the morgage person told me so.

And how do we go about paying them off? Do we have them send us a letter first and then we send them a check that? That way its proof the company is agreeing its settled and cant pull a fast one saying oh no, thats just for partial payment?

We'd like to offer one at a time an amount to settle but do we settle for 1/3, 1/2? Do we have the right to ask them to take off the added fees and interest?

We just really need some advice. We are still struggling with money flow but need to get these debts taken care of.

Any advice would be very much appreciated

[Ladynred]

Figured in a few years her credit will get better.

Unfortunately, she figured wrong, it'll take at LEAST 7-1/2 years from the time she quit paying, maybe more. She would have been better off filing bankruptcy at that point.

How long ago did all this occur ?? When did she quit paying ?

Basically that once the SOL gets close, the business sells your debt (which we knew) but when you dont pay them, its again a new fresh mark on your credit.

That is a load of horsehockey ! Sorry, but the SOL has NOTHING to do with the amount of time a negative can be reported to the credit bureaus. If one collection agency can't collect, and they sell it, that does NOT make any 'fresh' marks on your reports. The debt can NOT be reported for more than the legal 7-1/2 years from date of first deliquency by ANYONE.

And we were also told that alot of times going to those non profit companies that help you with consolidating, is almost as bad as filing bankrupt.

That is fairly close to the truth. Don't kid yourself, they are not 'non-profit' and they are controlled and FUNDED by the credit card companies !!! They are NOT working for YOU in the slightest.

Because once the credit is paid off, it takes 7 years/establish your credit.

Not true. There are many things you can do to re-establish and rebuild your credit, but you would be stuck with the credit counseling for 7 years. As you rebuild, it's negative effects diminish.

Once we get the credit report, where do we start? how do we know if we're going to be paying debts more than once? Do we pay off a charged off debt?

First, you dispute anything that is inaccurate on your reports. If you're going to settle debts, do everything IN WRITING but keep in mind that settling debts will NOT raise your scores. The bankers might like it, but a settled account is still considered negative by the FICO scoring model.

I know for a fact that fingerhuts debt is on there 2 times, the morgage person told me so.

If the SAME debt is listed twice then dispute the duplicate. However, if it is reported once by Fingerhut and once by a collection agency, that is NOT a duplication and is legal.

Do you have money to settle ?? If you don't have a lump sum you can offer when you approach collectors then you're not doing yourself any favors. They are NOT going to be very receptive to extended payments, they WILL demand all of it .. RIGHT NOW. They are under no obligation to accept anything less than the full amount owed.

DO NOT agree to ANYTHING over the phone. If you can't get it in writing, don't do it.

I would suggest that you head over to [url]www.creditboards.com[/url] and/or [url]www.creditinfocenter.com[/url] and start reading in the credit repair and settlement forums for more help.

Depending on how old these debts are, paying an old collection or old charge-off can actually HURT your credit rather than help it. If you're talking about a LOT of money, bankruptcy might be a better answer, especially if you don't have lump sums to pay settlements. Once the collection agencies see you making settlements, they will descend like vultures to roadkill.

[no_cheez_4me]

How long ago did all this occur ?? When did she quit paying ?

her debts range from 6 years to 2 years. most of them she stopped paying about 4-5 years ago. She has one, a student loan that she sends payments to when we can afford it basically-she has a judgement for that one.

That is a load of horsehockey ! Sorry, but the SOL has NOTHING to do with the amount of time a negative can be reported to the credit bureaus. If one collection agency can't collect, and they sell it, that does NOT make any 'fresh' marks on your reports. The debt can NOT be reported for more than the legal 7-1/2 years from date of first deliquency by ANYONE.

if they never get paid, would her credit/score ever truly improve and would the debts always be on the report?

Not true. There are many things you can do to re-establish and rebuild your credit, but you would be stuck with the credit counseling for 7 years. As you rebuild, it's negative effects diminish.

Can you work on improving the scores while also paying them off or settling? If so, whats the easist way to start building credit again?

First, you dispute anything that is inaccurate on your reports. If you're going to settle debts, do everything IN WRITING but keep in mind that settling debts will NOT raise your scores. The bankers might like it, but a settled account is still considered negative by the FICO scoring model.

But what if you dont know whats inaccurate? She has so many things on there, last time we got a report we didnt know who the companies were and what went to what and so on. Also If settling the debts wont raise our scores but at least look good to the banks, thats a step up right?

Do you have money to settle ??

im sure we can maybe work on the low ones one at a time. But yes we will only get in touch with them once we have the cash to work with them.

DO NOT agree to ANYTHING over the phone. If you can't get it in writing, don't do it.

So do I say to them, this is what i am willing to do, and if they agree, i say something like ok, send me a written document first?

I am going to check out those links you sent me after I finish writing this reply.

How come paying something off even if its an old debt can be worse for our credit?

As for bankruptcy, she owes about 10,000, not counting her truck that shes paying on faithfully. I was under the impression no one can file for it anymore anyway? Something about even if you file you still have to pay everything back eventually? If she filed bankrupt how long would it be until we could get a home loan? Or could one file after we get a home? Would they take her truck?

Once the collection agencies see you making settlements, they will descend like vultures to roadkill.

How would lets say, Sears know if we settled with Fingerhut?
and LOL @ like vultures to roadkill (so true)

thanks so much for your help in this matter

[Ladynred]

if they never get paid, would her credit/score ever truly improve and would the debts always be on the report?

Of course her scores would improve - AFTER all of the old negatives drop off her reports. So no, things would NOT always be there. By law - the FCRA - negatives can only stay on your reports for 7-1/2 years, starting from the date of first delinquency. After that they can never appear on your reports again - not legally anyway.

Can you work on improving the scores while also paying them off or settling? If so, whats the easist way to start building credit again?

Yes you can work on them. As for rebuilding - see the forums I already gave you the links to.

But what if you dont know whats inaccurate?

Surely she has SOME idea of which accounts are legitimately hers and she must have some idea of when they were last paid, opened, etc. Matching collections to original creditors can be dicey if she has nothing in the way of letters from collection agencies. The amounts should be a clue as well as account numbers.

How come paying something off even if its an old debt can be worse for our credit?

Because the credit bureaus have a bad habit of reporting when an account was 'updated', making and old debt look 'new' to the FICO scoring model and tanking your scores.

I was under the impression no one can file for it anymore anyway? Something about even if you file you still have to pay everything back eventually? If she filed bankrupt how long would it be until we could get a home loan? Or could one file after we get a home? Would they take her truck?

Of course you can file, that's absurd, the law doesn't prevent anyone from filing. The only way she would have to pay anything back is if she had to file Chapter 13. In a Ch 7 all debts are discharged and you pay NOTHING. People can get mortgages the day after discharge, but at horrendous interest rates. Two years after bankrutpcy, if you keep your credit clean, you can qualify for a decent rate mortgage. Would they take her truck ?? Hard to say w/o knowing how much she owes and how much it's worth. Most people lose nothing.

How would lets say, Sears know if we settled with Fingerhut?

After 4-5 years of not paying you would not be dealing with Sears or Fingerhut, but with the collection agencies who bought those accounts. They watch your credit reports for any changes and as soon as they see settlements, they will be contacting you. They're like sharks who smell blood in the water - only they smell money.

Credit bureaus SELL products that will alert creditors and collections about ANY activiity on your reports - believe me, they'll know.