I am providing counsel to one of my best friends. He has a 580-600 credit score. The derogatory debt he has is about $10,000 in medical bills, about 2-3 years old, and $1700 in a utility bill (gas) that is less than two years old. The goal is to get the scores up as quickly as possible.
He was in a car accident about three months ago which has created this so called opportunity. He will get $2600 in the next couple of days to pay three medical bills from that accident. He asked me what I thought about him paying off the gas utility bill, which would leave him with $900. He could settle 8 of the 15 old medical collections with the $900. Obviously, he doesn't want the new medical bills to go to collections, so we discussed him making payments of $10 per week to keep it out of collections. This is based on the premise that a company cannot turn you over to collections as long as you are making regular payments.
Does anyone see any flaws with this logic? What are you suggestions if you don't like this strategy?
