most of my debt is in collections-a few questions

[franny_b]

I'm just now beginning to deal with my debts and am feeling a bit confused on how to repair my credit.  I'm in my 20's and am in a total of about 10,000 in credit card debt and about 3,000 past due medical bills.  Two out of the three credit cards have gone to collections and the 3rd is still with American Express.  I stupidly ignored making payments for about 3 years.  So I have a couple of separate questions that I'm hoping someone can answer or guide me in the right direction.  I've already read quite a bit on the forums but was hoping that someone could provide some direction/further reading on what my next steps should be. 

The first is that I called American Express after receiving a letter to settle for 760 dollars (I owe 1,900).  I currently have the money to PIF and if they do they said they would offer me a credit card with a 500 dollar limit (I'm assuming this is something along the lines of Oasis/Optimum program).  It's my understanding that a PIF looks better on a credit report, but considering that all my other debts are in collections, would it really make that much of a difference?  The other benefit would seem to get a credit card to start to help rebuild credit. 

The other debts are in collections (and will be on my CR until 2016-2018) and it's my understanding that trying to negotiate a PFD is the best option.  However, I'm not in a position yet to PIF the larger debts yet.  So, what do I do?  I'm a bit overwhelmed and trying to figure out a starting point and setting up a plan of action to repair my debt.  Would paying AMEX first in full be a good starting point?

The only positive on my credit report are my student loans which have been paid on time. 

Sorry for the lengthiness and thank you.  I will continue educating myself and hopefully this will become less overwhelming. 

[lae_lae]

AX - try to negotiate a better deal with them.  See if they would go for PFD and you get the $500 CC too.  If you do pay in full, do you know if it will be a totally new card?  If it is, it might hurt your AAoA.  Another option would be to pay the settlement, use some of the money to get a secured card with a local CU. 

Other debts - what are the SOL for the other debts?  This will determine if you will send a DV or not. 

Student Loans - keep paying those on time, do not miss a payment.  Student Loans are the hardest tradeline to fix if there are any derogs.

[txmomma26]

If I were in your shoes, yes, I'd pay AMEX off first and go the Oasis/Optimum route. Then I'd start working on the smaller collections that you can afford to do a PFD/PIF for.  However, I'd also look at which CAs are reporting and try to strike a payment deal with those that are well known for lawsuits/judgements first (Midland, LVNV, etc are the ones that come to mind). I'd also see which are still owned by the original creditors, who you may have better luck paying off for a callback of the collection and subsequent removal of the collection tradeline on your reports.

Most importantly, I would say that you shouldn't shop around for new credit (except the AMEX offer) until some of this is taken care of.  If you do by chance get an approval, it will probably be at very unpleasant terms/interest rates.

Without having any real details on what the accounts are or balances, that's all I know to tell you.  Good luck - it's a rough journey but you CAN make a big difference in your credit report with some time and effort.

[franny_b]

Thank you for the responses.  I believe the SOL will not be up on most for another 2 years.  None of my debts have passed the SOL yet.  There are four separate debts that are medical bills.  One for 35, another for 68.00, 812.00 and then 3,000.  The first three I would be able to PIF, so I'm assuming that I could attempt to do a PFD with those.  I don't have enough currently to cover the 3,000 medical bill that's in collections. 

The other debts I have are 3 different credit cards.  As previously mentioned one is American Express.  The other is Capital One, in which I owe around 800 dollars for and was sold to Northland and they're offering to settle for 512 dollars.  The largest amount that I owe is a previous Bank of America credit card and the balance was sold to NES for 7200.  They haven't offered a settlement and I haven't contacted them yet.  I believe that neither Capital One or Bank of America no longer own the credit. 

One of the biggest factors that would lead me to go ahead and settle with AMEX is because it would free up some funds to pay off other debts.  The credit card being offered is, I believe, a different card than what I had before.  But, if it would look better to go ahead and PIF, especially if I can negotiate a PFD, then it would actually be beneficial to PIF.  I'm not really interested in having a credit card other than to help rebuild credit, so PIF to AMEX would be beneficial, in that sense.  Thanks again!