@kbreeeezy0420 wrote:Hi everyone,
1st time posting on this, but I've always been fond of keeping up with credit.
Long story short, it's been a rough year with the pandemic, and I was in a horrible spot. Going from a 750+ credit score shot down to less than 500's. Couldn't keep up with payments when I lost one of my jobs that supplied majority of the income. Found another job & still working, but now on a journey to fix my credit.
I've been receiving letters from collection agencies but when I read my credit reports, it shows that they are actually charge-offs. Reading on the forums, it's a bit confusing for me. What are the differences? When I check my credit report, it shows I don't have anything in collections. Are they still willing to let me make monthly payments to them? How should I go about it? Should I compile a list and start the snowball affect by paying the lowest amounts first?
Sometimes I hear advice from friends not to pay these at all. I am paranoid that if I do not respond in any way, they will take me to court.
First time this has ever happened and it's super overwhelming and stressful. I just want to do this correctly.
I'd appreciate any and all advice.
Thank you, everyone.
Charge off is an accounting term. It means the creditor no longer has your account as a performing asset and instead has moved it to a liability. Once it has a charged off status they no longer add interest, late fees, over the limit fees etc.
Collections simply means the account is past due and they want to be paid. Some collection agencies do not report right away. The shortest statute of limitations to sue on a debt case is 3 years in some states but as long as 10 in a few. Many collection agencies do not report if they are intending to sue because it reduces the chances of counter claims against them. So the reason you are seeing the original creditor trade line as charged off is because that is the accounting status of the account. You likely are not seeing collections trade lines yet because they may be planning to sue.
What state are you in?
Who are the creditors? How much (rounded off) do you owe each one?
You you can list out the accounts by:
Creditor/Credit Line/Balance
Then we can help to tackle the debts. Some companies have their own internal collection agencies and dont use outside sources to collect on their behalf.
