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I fell off the wagon again

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Red1Blue
Super Contributor

I fell off the wagon again

My friends at MyFico, I need your advice. Due to family reasons, I fell off the wagon again and started hurting my credit. Many of cards are over 120 day late and I have to start rebuidling and figure out best possible way. This is probably last time I have to do this as I am 60 year old and dont have much energy.

1. Should I make the payment arrangments and pay off the loans over a period of time in full amount?

2. Should I make settlement and try to work some thing out and pay less than complete balance?

3. What is effect of being on a payment plan? Would it report differently?

4. If I were to try to make the full payment, will the closed account with a balance effect the scores?

 

What is the best way to approach this situation?

 

Message 1 of 6
5 REPLIES 5
Brian_Earl_Spilner
Credit Mentor

Re: I fell off the wagon again

Just keep in mind that if you settle, any amount forgiven will become taxable income and you'll have to add it when you file next year.

    
Message 2 of 6
Red1Blue
Super Contributor

Re: I fell off the wagon again

Thanks for your reply. Any comments on other questions I have listed above ?

Message 3 of 6
beutiful5678
Frequent Contributor

Re: I fell off the wagon again


@Red1Blue wrote:

My friends at MyFico, I need your advice. Due to family reasons, I fell off the wagon again and started hurting my credit. Many of cards are over 120 day late and I have to start rebuidling and figure out best possible way. This is probably last time I have to do this as I am 60 year old and dont have much energy.

1. Should I make the payment arrangments and pay off the loans over a period of time in full amount?

2. Should I make settlement and try to work some thing out and pay less than complete balance?

3. What is effect of being on a payment plan? Would it report differently?

4. If I were to try to make the full payment, will the closed account with a balance effect the scores?

 

What is the best way to approach this situation?

 


I think this depends on what your goals and plans are. Are you planning to apply for new credit or do you foresee a need for a good credit score (e.g. car insurance rates, rental application, etc) in the near future? Do you just want the lenders off your back? Do you just want the satisfaction of a good score? Do you feel a moral obligation to pay the debts in part or in full?



EX 8: Aug 2021 - 692 | EQ 8: Aug 2021 - 714 | TU 8: Aug 2021 - 673
Message 4 of 6
Red1Blue
Super Contributor

Re: I fell off the wagon again


@beutiful5678 wrote:

@Red1Blue wrote:

My friends at MyFico, I need your advice. Due to family reasons, I fell off the wagon again and started hurting my credit. Many of cards are over 120 day late and I have to start rebuidling and figure out best possible way. This is probably last time I have to do this as I am 60 year old and dont have much energy.

1. Should I make the payment arrangments and pay off the loans over a period of time in full amount?

2. Should I make settlement and try to work some thing out and pay less than complete balance?

3. What is effect of being on a payment plan? Would it report differently?

4. If I were to try to make the full payment, will the closed account with a balance effect the scores?

 

What is the best way to approach this situation?

 


I think this depends on what your goals and plans are. Are you planning to apply for new credit or do you foresee a need for a good credit score (e.g. car insurance rates, rental application, etc) in the near future? Do you just want the lenders off your back? Do you just want the satisfaction of a good score? Do you feel a moral obligation to pay the debts in part or in full?


At this time, I want to get this out of my life. I have a complicated life. There was a death in the family and I had to travel overseas several times and could not attend to them. I have spent last 6 years studying towards MD/PhD. FInally I completed the program in March and became an MD. It was lot of hardships for last 6 years. Now this happend in my life and trying to see if I can make some arrangments and put this behind and move on. The total tradelines are 14 totalling owed about $54k. I can try to pay it off in 12 months in full and move on with life. I have no desire to apply for new credit or obtain new lines.

Message 5 of 6
beutiful5678
Frequent Contributor

Re: I fell off the wagon again


@Red1Blue wrote:

@beutiful5678 wrote:

@Red1Blue wrote:

My friends at MyFico, I need your advice. Due to family reasons, I fell off the wagon again and started hurting my credit. Many of cards are over 120 day late and I have to start rebuidling and figure out best possible way. This is probably last time I have to do this as I am 60 year old and dont have much energy.

1. Should I make the payment arrangments and pay off the loans over a period of time in full amount?

2. Should I make settlement and try to work some thing out and pay less than complete balance?

3. What is effect of being on a payment plan? Would it report differently?

4. If I were to try to make the full payment, will the closed account with a balance effect the scores?

 

What is the best way to approach this situation?

 


I think this depends on what your goals and plans are. Are you planning to apply for new credit or do you foresee a need for a good credit score (e.g. car insurance rates, rental application, etc) in the near future? Do you just want the lenders off your back? Do you just want the satisfaction of a good score? Do you feel a moral obligation to pay the debts in part or in full?


At this time, I want to get this out of my life. I have a complicated life. There was a death in the family and I had to travel overseas several times and could not attend to them. I have spent last 6 years studying towards MD/PhD. FInally I completed the program in March and became an MD. It was lot of hardships for last 6 years. Now this happend in my life and trying to see if I can make some arrangments and put this behind and move on. The total tradelines are 14 totalling owed about $54k. I can try to pay it off in 12 months in full and move on with life. I have no desire to apply for new credit or obtain new lines.


Congrats on your achievements!

 

Since you have no interest in applying for more credit in the future I would just contact the creditors requesting a settlement and then I would work on building a robust emergency fund (if you haven't already).



EX 8: Aug 2021 - 692 | EQ 8: Aug 2021 - 714 | TU 8: Aug 2021 - 673
Message 6 of 6
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