WalletPop

Joann,

If you've got the funds available, you're best bet would be to negotiate a lump sum settlement payment as low as you can get it.

Lita

Reply

Sylvia,

You may want to work with a non profit credit counseling service. Often they have more success negotiating rate reductions. Be sure you contact one that's under the wing of the National Foundation for Credit Counselors:

http://www.nfcc.org/

Many others advertise they are non profit, but charge very high fees.

Lita

Reply

Joann,

Yes you should settle and close the accounts. Once your credit score improves with the payoff you can then apply for a credit card with better terms.

You're most likely getting the highest default interest rate right now.

Lita

Reply

Ms. Epstein:

I am 53 years old. My mother suffered a stroke and five years ago, I moved back home to be with her. I did not work and used my Retirement to live on. My mother is now living with my cousin and I've started to work again. My home is paid off. I have two credit cards with original charge amounts of $1,000 each. I have not paid on them in a year and they are probably now $1,700 each. Should I just make a deal to pay the original $1,000 in one lump sum (to close the accounts) for each of them or pay them off gradually to include
probably over and grand interest and penality combined and keep the cards open? My income is about $55,000 a year.

Also, I must now recoup my retirement fund losses or at least start over again. Any suggestions?

Reply

Ms. Epstein

I'm a 28 year old single mom. I had a close friend in the past who stole checks from me and overdrafted my account on 3 different occasions. I took the case to small claims court and won, but never saw my money. Now I have collection agencies down my back trying to get me to pay these bills that I can't afford. Can I get this taken off my credit report, by showing court documents ruling in my favor? I'm trying to improve my credit score...

Reply

Ms. Eipstein,
I have recently been laid off. I am 59 1/2 yrs old, with a husband who has been on SS disability for 6 years.(dementia). I am carrying a heavy debt load of approx. $23,000. and I am not certain if I can withhold a fulltime job or even get one at this point!

I have taken out $20,000 of my IRA conversion from 401k to pay off several debts-high interest title loan @ 29%, signature loan @ 29% and my 2001 Capital One car loan - $10,400. I do have insurance on my credit cards (2), but still have 2 others (husbands) with balances @ approx $1700.

I have tried to negotiate with Capital One, Sunbelt and American General Finance, but to no avail. I was told if I was to default, then I could probably get a chance to pay "half" of the amount due, but I am being up front with these people and they will not negotiate at this point!

We are also being harrassed from a debt on a car loan that we made in 2000. We turned the car back in due to my husband's diagnoses in 2002, but it was sold at such a low price at auction, we had a balance left over of approx. $8,000. Several years ago, I had a call from Calvary Financial Services, Inc. They said I could make an arrangement with them to pay from my checking account, which I did for $100.00 per month for approx 36 months (I have the paperwork). Last October/November they stopped taking the money out. I tried calling, writing to them, but rcvd no response.
Until now...my husband was contacted by another debt collections company rep...John Gregory who stated he was from Professional Services, Inc. representing Calvary in collections for $12,600. I told him that amount was not corect, and I will not pay that. I rcvd a letter RE that amount, since I questioned their legitimacy. I sent a dispute letter last week. (within the thirty day reply period).

John Gregory (rep from Professional) stated they will settle for $7000 when I spoke with him. I just don't have the money to pay them. I am at my wits end. Can you please advise?

SJSM

Reply

C. Courageous,

This would be considered identity theft and the credit reporting agencies have a responsibility to help you clear the record. Collection agencies don't tend to be very helpful. What you should do is request your credit report from each of the major credit reporting agencies through the government's website: https://www.annualcreditreport.com/cra/index.jsp.

Other websites will charge for the reports or will sign you up for a monthly monitoring service. You are entitled to one free report each year, so don't pay for it.

When you get the reports, you'll also get instructions for how to challenge what's on those reports. Question each of the accounts in which the court ruled in your favor. Be sure to send prove of the court's decision so you can make a strong case. These records should be removed from your credit report.

Lita

Reply

Ms. Epstein,
We would like to sell our house and move into a smaller home as we are now empty nesters. Unfortunately, we financed some school tuition payments by taking out a second mortgage on our house. Since our house isn't worth as much as it used to be, is it possible to refinance this second into a tuition loan program? This would be for past tuition and I'm not sure this is a possible solution. What do you advise?
Thank you

Reply

Awhile back, my wife suggested we take advantage of those 0% credit transfers. One of the offers allowed us to take a bit more to pay off almost all of the other credit card debts. All this has done is to get us into more trouble, hindsight being 20/20 I will not do this again. We now have a line-of-credit ($49k) and 2 other 0% transfers ($24k and $9k). We're coming up short each month and are having to use another credit card for the smaller incidentals which really doesn't help at all. What do you suggest we do to get out of this mess? Please respond to my email address. Thank you very much.......Brian

Reply

Sally,

I'm not aware of tuition loan program that allows you to refinance out of a second mortgage. You'll probably need to look at a personal line of credit that you can use for payoff of the student loan debt.

Lita

Reply

Brian,

The biggest problem with the 0% credit cards is that so many people continue charging rather than paying down the debt while the interest is 0%.

Your best bet would be to work with a non profit credit counseling service that could possibly negotiate a better interest rate and help you set up a payment plan. They would also help you with budgeting to get your spending under control. You can contact them by phone at 1-800-388-2227.

Lita

Reply

Dear Lita,
My husband and I have been renting a house for 6 years and the land lord wants to sell it. She would like for us to buy it and we would like to except she is ready to sell and both our credit is poor due to late payments in the past (due to we both went through nasty divorces). How can I improve my credit quickly and be able to get a loan. She is selling for $60,000.00. I am losing sleep and don't want to move what can we do?
Please help us,
Theresa

Reply

Theresa,

There's really no way to legally quickly fix a credit report. Paying off debt on time over about 6 to 18 months is about the fastest way.

You may want to offer to arrange a lease with option to buy contract. I don't know what state you are in, but you're probably best off contacting an attorney who could help you arrange the contract if you're landlord is interested.

Given the real estate market in most states right now your landlord may consider such an option because sales are so slow.

Lita

Reply

G,

The fact that you paid off all that debt is shown by the improved credit score. When you contact a bank they may ask for a letter of explanation, but your good payment history should help you get the loan. You may want to sit down with your bank and discuss the situation. It's a good idea to get prequalifed for a loan so you know how much the bank will finance before you start looking for a house. When you're ready to shop for a loan use a service like Lending Tree (www.lendingtree.com) that will match you with several lenders that will bid for your business.

Lita

Reply

Dear Lita: I make no excuses. It's all my fault but I want to fix it. I have a home that is worth about $325,000, equity line debt of $70,000, credit card debt of $50,000 on 5 credit cards due to real estate business that failed. My wife and I are 62. We both work but my income is only $35,000 and her's is $65,000. Deduct from that mortgage, utilities, gas, car payments, taxes, insurances, etc....there is little left for food and clothing. We are only able to keep paying the minimum until we retire and then we can't afford anything with no retirement fund. We truly could end up being homeless and no money. Do you have any recommendations?

Reply

Tom,

You could probably pay down your debt very effectively using the snowball effect strategy that I talk about in this post: http://www.walletpop.com/2008/03/15/spending-down-debt-the-snowball-effect/

Lita

Reply

Dear Lita,
I am a 59 1/2 year old unemployed woman. I have a husband who has been on SS Disability for the past 6 years, suffering from secondary stages of dementia.

Consequently, while I was working, I carried the debt load. Now however, I am in failing health myself and need to use what little etirement savings I have in order to either pay off my debt, or to pay down the debt.
I have $20,000 in which to do this with.
I have contacted several debtors asking for a reduction, but they will only reduce if i have defaulted! Is there anything that you can suggest?
Here is my debt list:
Car pay off- 10,400.Capital One
signature loan - 3,700.

Reply