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Thread: Best way to pay off old debts?

  1. #1
    exotisch23
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    Default Best way to pay off old debts?

    Looking for advice on how to go about paying off some old debts that have gone into collections, haven't paid anything on them for about 4 years and would like to start taking care of it so I can fix my credit. I owe about 4K total, between 3 cc's and a cell phone bill ($900!) I'm just not sure where to start.


    There's no way I could just pay it all at once because I have no money saved, so making payments could be an option, right? Should I just call every collection agency individually and set up a plan? How would I know if they'd really clear my debt after?

    I'm clueless to these kinds of matters, Any advice would be greatly appreciated.

  2. #2
    Veteran Member StuartL's Avatar
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    Default Re: Best way to pay off old debts?

    You say that you can't pay all at once. Could you pay all of one bill in one payment? If you have enough to pay one debt completely, you could try calling them and offering to repay in one go - and doing a deal. These firms will often accept reduced offers just to clear the matter up and bring in some money. You would need to try and negotiate though.

    I have heard in the past about firms accepting 40-60% for full repayment. And that wasn't in a tough climate for lenders as we have now...

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    Banned Melonie's Avatar
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    Default Re: Best way to pay off old debts?

    ... but be aware that in today's climate if you do come to a 'settlement' agreement with your creditors, there's a good side and a bad side. The good side of course is that the creditor will probably accept a 70-60-50% payment and leave you alone. The bad side is that the creditor will continue to list the 30-40-50% you didn't pay as a deficiency on your credit report.

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    Default Re: Best way to pay off old debts?

    And, it doesn't help your credit much by paying off a collection agency. You need to pay off the original creditor.

    The original creditor will list that you owe $900. After x amount of time of you not paying that (originally) they'll sell it off to a collection agency. The collection agency buys these accounts for pennies on the dollar and try to collect the money from you for x amount of time...until they sell it off to another collection agency. By paying off the latest collection agency to have the account, you are still not satisfying the debt originally incurred to the original creditor.

    I would suggest contacting the original creditor and offering to make some kind of payment. By paying off the original creditor, it will wipe out the other collections (I believe).

    It's been a long time since I've had to deal with this, so my info may be rusting or inaccurate. I think the best thing you can do is visit the Credit Repair Boards (I don't remember the web address...so if someone does, please post) and study up on your info before attempting anything.

    Good luck!

  5. #5
    exotisch23
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    Default Re: Best way to pay off old debts?

    Thanks for all the replies


    Quote Originally Posted by StuartL View Post
    You say that you can't pay all at once. Could you pay all of one bill in one payment? If you have enough to pay one debt completely, you could try calling them and offering to repay in one go - and doing a deal. These firms will often accept reduced offers just to clear the matter up and bring in some money. You would need to try and negotiate though.

    I have heard in the past about firms accepting 40-60% for full repayment. And that wasn't in a tough climate for lenders as we have now...
    My b/f pays the bills, so maybe he could help me pay one debt in full at a time. The thing with that is, yes he does pay all one bill in one payment, but we don't have much leftover after that.

    I guess I will just call the original creditors and ask whether to pay them or the collection agency, negotiate a deal, and hope the amount that was discounted stays off for good. Is that all you can do, hope?
    Last edited by exotisch23; 12-11-2007 at 05:08 AM.

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