Should I pay off my charge-off accounts?

[JShidell]

Hello,

About 4 years ago I fell into some serious financial situations where I was unable to pay on alot of my CC's, Phone bills, Hospital Bills, and car notes.  I was also dumb and nieve at that time, and have really learned my lesson since.

Anyways all my accounts had fallen into collections/charge-offs, except for one good standing, which was a car note.  I was about 23K in bad debt meaning all my debts were/was in collections/charge-offs accounts.  The only debt that was showing any postive on my credit report was the car note that I was able to keep afloat during that rough time.  I just now paid off the car last month (yahoo), which was 8 grand.  So before that I was about 31K in debt (total).   My credit is pretty terrible I also had a repo back in 2004 as well.  I know I bought two cars at the same time, it was a dumb, stupid mistake.

Anywyas here is my situation.  I've recently started taking care of all my charge-off accounts, i've happened to pay off half of my debt.  I'm down to about 16K left to pay off.  Majority if not all of my accounts are scheduled to fall off my credit report in 3 years 2011.  Being that my credit is already damanged should I just wait until my charge-off's fall off my credit report?  Or should I pay them off?  I heard if you pay them it could hurt my credit even more, how truthful is that?  If that is the case I would consider not paying the remaining 16K and just letting it fall off in 2011.  I'm a little confused.  What would be the best solution for this?  Take in mind im in position to be able to pay off all these charge off accounts within the next two to three months.  Also keep in mind my goal to possibly get a home loan within the next year or so.

Any suggestions would be helpful.  Thank you!

v/r

James

[BungalowMo]

If I were you, here's what I would do.

What ever debts are still with OC's...call them!  Tell them you want to pay them in FULL, but would also like a "favor" from them. (never demand or get ugly, they don't have to help you)  Ask that if once you begin regular payments, once you get to the halfway point, would they remove the negative comments??  Let them know that you fully understand that if you default under these terms...all negatives come back.  That will give them incentive to make the deal with you & lats them know that YOU have the incentive NOT to default.

It's a win-win.

Call the ones that had sent your balance off to collections...see if they'll take the payments directly from you & get the CA out of the picture.  Make them the same offer as the others, but maybe they remove the negs somewhere between 50 & 75 % pif.  That will be worth their contacting ca's & dropping them.

It's best to barter with all these people while you owe them money....not after you've pif!  Ask me how I know...  Your cash is your bartering tool!

[JShidell]

Thanks for your response. Majority of all my accounts are no longer with the OC. I would say just about all of them are in collections as charge-off status. I'm wiling to pay all my charge-off status accounts in Full, and can do that within the next 2 to 3 months. I've already paid 11K towards my charge-off accounts. I still have 16K left. I do not want to do any payment plans, I'd rather just pay off the charge-off accounts so they will be closed and settled. However, will this hurt my credit score even more if I did that? I heard if you pay off charge-off accounts it affects you negatively more then positive. Like I said in my previous post that majority of my charge-off accounts will fall off my report by 2011. My problem is, why would I pay on a charge-off account when my credit is already damaged when I can just wait 3 years for it to fall off my credit report and not have to pay anything? The only reason why I feel I should pay off all charge-off accounts is because I want to try an purchase a home within the next year or two and most lenders will not give you a loan with unpaid/unsettled charge-off accounts. Has anyone experienced paying off charge-off accounts and bettering their credit score any? I mean i've been paying on my bad debt for 8 months now and i've seen a 30-60 increase in my credit score. I have tons of charge-off accounts! Please give me your advice if paying off these charge-off accounts will help me or worsen me as far as bettering my credit score. If it will better my credit situation I will pay off these charge-off ASAP. These are my credit scores as of today. I use the 3-1 from True credit to monitor my credit. TU - 530 EX - 547 EQ - 561 As you can see its pretty terrible, but it was a lot worse 8 months ago. If I can get my score over 600 by the end of the year I would be extremely pleased. Thanks for your help v/r James