Negotiating/Debt Consolidation/Payoff

[Anonymous]

I'll try to be short and concise. 

Issue:

$45k of debt spread over several credit cards/loans (have breakouts)

Goal:

Payeverything off within 2 years (hopefully)

Questions/comments

1. Worth negotiating and closing accounts for smaller payoffs?
   
   • Negative credit effect (I'm sure is not good)
   • Who (if anyone) should I speak at the creditors (agents seem to not know this is a thing)
2. Consolidation loan APR will be lower than all accounts seems like best option (?)
3. Any direction I should be taking over another?

I just want to get out of this debt, its killing me.  I'm way to stressed and need to build someting to be able to make a change in my life in the next couple years. 

Thanks for reading and any advice you can leave.  I appreaciet it all. 

Have a great day!

[Anonymous]

It depends, do you have any derogatories on your record yet? if you do then here’s the deal, when it comes to chargeoffs, as long as they’re paid, scoring does what it does, it doesn’t matter whether it was settled for less, as long as it’s paid, but on manual review it’s always gonna look better to subsequent lenders that you paid your debt in full.

Read the Scoring Primer linked at the top on my thread, it’ll explain a lot of things.

[Anonymous]

Thanks - I do have a bankruptcy ... so, but what you're saying makes sense. I'll check out that link in the post.

THANK YOU

[SouthJamaica]

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@Anonymous wrote:

I'll try to be short and concise. 

Issue:

$45k of debt spread over several credit cards/loans (have breakouts)

Goal:

Payeverything off within 2 years (hopefully)

Questions/comments

1. Worth negotiating and closing accounts for smaller payoffs?
   
   • Negative credit effect (I'm sure is not good)
   • Who (if anyone) should I speak at the creditors (agents seem to not know this is a thing)
2. Consolidation loan APR will be lower than all accounts seems like best option (?)
3. Any direction I should be taking over another?

I just want to get out of this debt, its killing me.  I'm way to stressed and need to build someting to be able to make a change in my life in the next couple years. 

Thanks for reading and any advice you can leave.  I appreaciet it all. 

Have a great day!

---

1. Negotiating and paying things off for a smaller amount will kill your credit for years to come.

2. If you are paying interest, and can get a consolidation loan for a significantly lower interest rate, that's theoretically a good idea... but in practice I'll bet it usually results in being even more saddled with debt.

[Anonymous]

@Anonymous Having a bankruptcy puts you in a public record scorecard and you will switch score cards once over the progress of the 10 years. I don’t know at what point, but you go from a recent public record scorecard to mature public record scorecard.

So changes in your account won’t mirror those of people in clean scorecards or even those in delinquency scorecards. You’ve specifically gotta compare to people that are also in public record scorecards to try to learn the specifics of how your scorecard works.

I’m assuming the accounts you are wanting to negotiate are already closed? Are they already past due? To give you the best advice, we need more information, but yeah go ahead and read the Primer, you’ll definitely have the basics down, so we will be able to try to help you put together specific plans.

But the main thing post bankruptcy is to get 3 to 5 revolvers reporting positive payment history as quickly as possible. You can actually get some pretty respectable scores in a public record scorecard, but you’ve got to tweak the metrics, which you’ll learn about in the primer.

[Anonymous]

@Anonymous 

I'm close to 4 years after my bankruptcy.  All accounts currently are in good standing. I agree with the debt consolidation, as much as I believe in myself. 

I think I have a 60 day issues, but honestly they shouldn't be there (long story). 

I started to read the primer - about 3/4 done (at work got pulled away) 

Discover ($3200) offered a 6month relief program: 9.99% APR for 6 moths w/reduces payment

Or

16.99 APR for 12 months - no change. 

Capital one offered nothing - but spoke with collections (I'm not in collections with anything) about debt settlement.  I offered $1000 (no reason why) on $4200 of debt - they're calling me back within 20 days. 

Synchrony offered to close my account, $33/mo. No interest. 

The rest is navy federal loans and a credit card. They're pretty helpful, and have offered a couple options. One 12 months lowered APR and payment on everything... 

I don't know - I don't want to ruin my credit, but I need to get out of debt.  

[Anonymous]

If they can give you payment plans, reduced interest, etc. that would be great but if you settle for less on a good account that means they’re going to have to charge off the difference, which will kill your credit for seven years.

You’re six years away from the bankruptcy falling off, so you’re talking about hurting your credit pretty bad for the remainder of that time. I’d try to avoid that at all costs. Like I said you can get some great scores with a bankruptcy especially as time has passed, but if you do this, that’s out the window.

If a debt consolidation loan can get you out of trouble that may be the best thing, but you’ve got to have the self-control not to go run those cards back up. At least your credit would not be ruined, but you got to make sure you don’t put yourself back in debt further.

[Anonymous]

So best option:

Take whatever option they offer without closing the account OR pay everything off with a consolidation loan.

Would it make sense to take the offers first, pay the loan down - then when the offers expire, use the consolidation loan ... hmmm

[Anonymous]

Absolutely take whatever options, you understand. Debt consolidation if and when it’s the only way, or if it makes sense financially because it’s a lower percentage rate and you can do as we said.

[Anonymous]

Awesome - thanks for the reassurance that I'm going down the right path and didn't jump off a cliff. 

Biiiiiiirrrrdddmaaaaann!   (Are you a lawyer?)