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Turn Charge-offs into payments before Summons/Sued

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New Contributor

Turn Charge-offs into payments before Summons/Sued

Long story, after a lay off and a move across country and unable to sell our house... here we are in a giant mess.

It sucks in July we got several Charge offs. Some of them have sent a Summons and are suing us like right away. Our house in Foreclosure and we have since moved out. We have good jobs now, not at what he was making but we are building back up.

 

My question is I don't want to get any more Summons. I've hired a lawyer with my last few dollars and what letters can I send on my own to make payment arrangements and prevent more turning into summons. I have Greenpath wellness who is going to set up payment plans but I don't know if they'll be able to before the Summons.

Any help would be appreciated, thank you.

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Valued Contributor

Re: Turn Charge-offs into payments before Summons/Sued

Just how much debt do you have, and have you considered bankruptcy?

Ch 7 Discharge May 2015
Discover/Target/NFCU CLOC/NFCU More Rewards Amex/NFCU Platinum/PenFed Power Cash Rewards/PenFed Pathfinder Visa/Citi Costco Visa/CapitalOne SavorOne - $130,400 total revolving
5% Conventional Mortgage @ 3.25% July 2020
May 2020 - EQ/EX/TU Fico8: 689/688/679 INQ: 4/2/2 Util: 13.7% total, 4 accts reporting $0, 5 accts each under 30%
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Super Contributor

Re: Turn Charge-offs into payments before Summons/Sued

What "your building back up" may have to pay for the judgements against you once you go to court. Like @SteelerNYC  asked. Whats your total debt. Will there be any surplus (equity) after the house goes to the auction block that you can get to get some of these paid? If not. Seek a BK lawyers advice and stop all this mess from going any further.

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New Contributor

Re: Turn Charge-offs into payments before Summons/Sued

Thanks for advice but we don't want to BK we talked to a lwyer and it's not an option. My question is - how do I deal with these charge offs? It's not my husband's fault he was part of a massive layoff. We just didn't have money. We are now building back up but we couldn't sell our house and tried 4 times (we now have a short sale offer). Part of the reason we got into debt was trying to save the house by charging it (don't ever do this, btw). And then a year applying for a loan mod which did not work. Anyway... My question is - what do I do with the current chargeoffs that just charged off? I would like to settle are there letters to send? Etc. It's about $30,000 debt in chargeoffs, $50k total debt, some we are current on. Thank you in advance.
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Super Contributor

Re: Turn Charge-offs into payments before Summons/Sued

Charge offs are next to impossible to get them deleted after payment. Main thing is to PIF rather than settle. It will look much better to future creditors that you paid your debts. After they are paid. Then you can try the GW letters. Without knowing who the creditors are. Pay down the debts is basically all you can do for now. The ones that are ready to sue or serve papers. Call and set up payment arraingements in return to not have them go the legal routes, court dates, and possible judgements. For now thats all I have. The faster you jump on the baddies the less headaches later. Good Luck!

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Frequent Contributor

Re: Turn Charge-offs into payments before Summons/Sued

If you cannot afford to pay $30k in full,. plus your other debts, then settlement might be an excellent option for you. First, settlements generally are not achieved by sending anyone letters. You have to get the banks or collection agencies on the phone to do it.

 

Second, do not give the debt collectors any information saying that your financial situation is improving. They will ask for all the money or for you to make payments forever to pay off the balance. The best strategy I have found is to tell them that you are borrowing the money from a family member, which is why you must settle for a lower amount and in a lump sum.

 

Third, you should settle the accounts in lump sums. If you enter into a payment plan for settlements and you miss one payment, then the entire agreement becomes void and you will be again responsible for the full balance. You'll also want to get settlement agreements in writing before agreeing to any payments. Most of them can send you a settlement letter via email these days, but do not pay them anything until you get the agreement.

 

Fourth, your debts are already charged-off and severely late. Settling will improve your credit, but you will not fully recover until all the debts have been settled and there has been a year or two since any derogatory information was being reported. As someone mentioned above, it can be beneficial to pay debts in full; however, this will really only matter when someone is looking at your credit report closely, such as a mortgage underwriter. In my opinion, most people in this situation will prefer to take the savings from settlement rather than worrying about borrowing money in the future. Right now, you have to concentrate on getting out of debt and preventing lawsuits before borrowing more money.

 

Lastly, some realistic goals for settling debts is about 40%. Sometimes you can get as low as 15%, but 40% or higher is much more common. For debts with credit unions, you will have to pay a higher percentage (closer to 80%), whereas the bigger banks will offer better deals. You will start to receive proactive settlement offers in the mail from debt collectors who have either purchased the debt from the bank you originally owed or that are representing those banks on a contingency basis. You'll almost always get a better deal dealing with a debt buyer or contingency collection agency than you will negotiating with the original creditor. I highly recommend you Google Consumer Recovery Network, which has a ton of free information about settling debts yourself.

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