Best Way to Handle Debts that are in collections

[sheltrpn]

I am trying to help a friend get his credit straightened out after a divorce.  Many of his accounts are in collections, what is the best way to handle these debts?

thank you

[mauve]

Step 1: opt out with both the CRAs and all accounts-in-good-standing

Step 2: pull all three reports from annualcreditreport.com 

Step 3: determine your state's SoL and credit laws re: spouses

Step 4: make sure that he has no accounts out there on which his ex is an authorized user / joint account holder

Step 5: evaluate each item, keeping in mind the type of debt, if it's his, if he has money to pay it, and the statute of limitations on that debt in your state.

[Schoolbuskid]

We need to know what he has in collections. LIke who the CA is, DOFD, SOL...etc.

DOFD= Date of first delinquency ( The date he went delinquent and never became current again)

SOL=Statue of Limitations (The timeframe a Collection Agency has to legally sue you for your debt)

If he hasnt already have him pull his credit reports from www.annualcreditreport.com

[sheltrpn]

Credit Agency:  Cach Llc

Date assigned:  8/11/2009

Date reported:  3/25/10

Original Lender:  american express

Date of last activity:  Not reported

Original Balance:  3115

Amount owed: 2914

Portfolio RC

8/22/08 date assigned

date reported 3/12/10

date of last activity:  not reported

Original Balance:  632

Current balance:  691

Original Lender:  HCBS Car Services

Enhanc Recovery

7/10/2008 date assigned

5/2/09 date last reported

Date of last activity:  none noted

original balance:  456

current balance:  456

Original creditor:  Sprint

Nco Fin

date of last activity:  9/18/06

dated last reported:  6/30/07

Original lender:  key bank national association

original balance:  394

current balance:  394

[sheltrpn]

What does Opt-Out mean with all CA"s?

[mauve]

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Opt-out/m-p/652091

you opt out with CRAs, not CAs. 

It keeps you more under the radar so new things are less likely to pop up.

Determine which of these he can afford to pay in full, and if any of them are outside of the statute of limitations for your state.

Send a DV for each debt that he can pay in full OR is outside of statute of limitations.

[sheltrpn]

Sorry I do not understand all these abbreviatios, what is DV?

[Schoolbuskid]

DV= Debt Validation (Gives the CA the burden of proving you owe the debts)

[llecs]

Welcome to the forums!

I'd suggest reading the following:

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

and What Steps Do I Take - great for learning the repair process.