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laserjobs
November 13, 2009 4:35 PM
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I should hope it hurts their credit score because they are a credit risk.

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sammy_b
November 13, 2009 4:35 PM
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@Duke_Newcombe sees what you did there...: I don't think that's the point he's trying to make. If we ALL have perfect credit scores then the value and importance of having good credit goes down.

Settling a debt shouldn't automatically make it so that you can't ever buy a home or a car, but a small ding so that it differentiates person A who always pays their bills on time from person B who let debt get out of hand but genuinely tried to make good as best they could is important when evaluating the worth of a credit score.

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VisionFromAfar
November 13, 2009 4:35 PM
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@sammy_b: Assuming that's how the system actually worked, that would be wonderful. But here at Consumerist, we all know better, right?

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TehWillis
November 13, 2009 4:35 PM
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Perhaps the LAST thing you should worry about when you're to the point of having to negotiate payments is how it'll effect your \"ability to bring on more debt\" score.

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4 replies
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idip
November 13, 2009 4:35 PM
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@TehWillis: I think you're right.

But, at the same time the consumer should be aware that there are consequences to negotiating your debt, it's not a get out of jail free card.

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TCama
November 13, 2009 4:35 PM
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@TehWillis: Credit score affects far more than your ability to bring on more debt. It also affects your ability to get employment, to get an apartment, etc. Which, for an unemployed person who just went through foreclosure, would really suck.

So if I negotiate with a lender to settle a debt for less than it is worth, does that mean I'd be a bad employee?

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vastrightwing
November 13, 2009 4:35 PM
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@TCama: Not necessarily a bad employee, but employers use this information to determine their risk. While a service job is not likely to care about your credit score, a bank will care because you have access to their money. If you get yourself into debt, a bank may consider your employment as a possible risk that you might try to take money if given an opportunity.

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Orv
November 13, 2009 4:35 PM
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@TCama: If they're using credit *scores* to determine whether they should hire people, they're idiots. Credit *history* maybe.

At the apartment complexes I've rented at, the credit scoring didn't determine whether they'd rent to you, just how much of a security deposit they'd require. If you had a good score, you just had to put down a minimal deposit; if you had an iffy score, you had to put down first and last month's rent plus the full deposit. For actually making the rental decision they were more worried about rental history.

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Johncc
November 13, 2009 4:35 PM
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@laserjobs
In a perfect world we would all be the magnificent being you obviously are. But for me ,After 20 years of never missing a payment or being late! 9 months of unemployment ate through my savings and negotiation was the only option . Yet now I am a risk in your eyes . May I offer a resounding Hurrah for you you are an amazing superhuman being I wish I was just like you..... NOT !

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Rachacha
November 13, 2009 4:35 PM
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@Johncc: I don't know how you came into debt for over 20 years, and I am sorry that you lost your job, but regardless of your situation, you are still a credit risk.


Look at it this way. A friend or co-worker asks to borrow $10 because he forgot his wallet, and you help him out. The next day he gives you $1 as a good faith gesture, but again, it is all that he has because he forgot to stop at the ATM. The $1 daily payments continue for a few days until one day he just stops paying you when he still owes you $5. You relieve him of that debt, telling him not to worry about it, but I can guarantee that the next time he asks to borrow $10 you are probably going to hesitate and wonder how much helping your friend is going to cost you simply because of your past history with him.

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Verucalise (Est.February2008)
November 13, 2009 4:35 PM
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@Johncc: So sorry to hear about your situation. But, everyone is correct- you are a credit risk, but take solace in knowing that you aren't the habitual \"borrow and bankrupt\" type, that you've gone 20 years doing the right thing. You can build your credit back up quickly with a little effort.


I've had to settle debts in the past- it sucks, but it's enabled me to work on my future instead of stuck in the past.

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idip
November 13, 2009 4:35 PM
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@Verucalise(countingcalories): \"You can build your credit back up quickly with a little effort.\"

OH really?!

I thought the issue here was if you have bad credit ... you have bad credit. Everyone here seems to be on the bandwagon that in this particular case, he's got bad credit he's a risk and no one should give him credit regardless of why he is a 'credit risk'.

The crappy thing here... 9 months of unemployment wiped this man/woman's 20 year good record. Don't give him credit! Tell him to move on and rebuild his credit, it's so easy and fast!

Um... last I heard... you have to have credit... to build credit. If no one gives him credit.... how does one quickly rebuild this credit with little effort?

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Rachacha
November 13, 2009 4:35 PM
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@idip: I don't think anyone said that he should not be allowed to have credit, simply that he presents a higher potential risk than someone who has no debts, or someone who has had a debt and paid it back in full. His credit score will take a hit, he may find it more difficult and/or costly to obtain credit, but if he can demonstrate that he continues to be responsible then his score should rebound fairly quickly, and his 20 year history and the history after he negotiated should demonstrate that he is responsible and presents only a minimal risk.

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subtlefrog
November 13, 2009 4:35 PM
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@idip: But the point here is that a negotiation is not the same as not paying. So this will reflect on your credit report. It will be a far cry easier to rebuild your credit from a negotiated settlement than from a \"screw it, just didn't pay it\" or even a \"lost my job and COULDN'T pay it.\"

The guy with 20 years of credit - if he had 20 years (well, 7 since, that's all the bureaus can see) of GOOD credit, then a negotiation shouldn't crush his credit. We're not talking bankrupcty. He should be able to rebuild.

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FDCPAGuy
November 13, 2009 4:35 PM
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@idip:
People will extend credit to people with bruised credit. For instance, a secured credit card. So it is possible to rebuild credit it just takes time. Heck after a bankruptcy discharges you get a ton of junk mail for credit offers on things like vehicles. Nothing is impossible when it comes to credit although some things are improbable.

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laserjobs
November 13, 2009 4:35 PM
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@Johncc: Sorry but you are a credit risk if you don't have money to paid debts. DOH!

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Johncc
November 13, 2009 4:35 PM
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@laserjobs:
So because the company I worked for went under you \"hope it hurts my credit score.\" I can only hope when you grow up you too experience the same situation, then maybe you will understand my disdain for your smarmy comment

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FDCPAGuy
November 13, 2009 4:35 PM
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@Johncc:
I feel that you're taking credit a bit too personal here. No one says you're a bad person for losing your job and being unable to pay your debts. Shit happens, that's why the bureaus can only see things within the last 7 yrs (in most cases). You need to focus on getting back on your feet, building up a reserve fund so if you have some unexpected job loss again it will help the transition, and letting this pass while re-establishing positive credit.

Commenters are saying that people who have an inability to pay debts on time/in full are in general poor credit risks. They are correct.

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Orv
November 13, 2009 4:35 PM
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@Johncc: Sorry you lost your job, but do you really think companies should keep lending you money when you don't have a job? How would that make sense?

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ohenry
November 13, 2009 4:35 PM
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@Orv: But it's not like he's a chronic job loser or anything. He lost his job once and had trouble finding a new one. Presumably, in the future, when he applies for more money, he will have a job to pay back the loan. Why should this isolated incident that he had no control over affect his future transactions (when, again, he will presumably have a job)?

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roanoke
November 13, 2009 4:35 PM
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@ohenry: It should affect his future transactions because all we have to go on are his past transactions. Our only indicator of his future debt repayments is past repayments, and currently he's in arrears. Is it fair? No. Is it right? No. But credit reports are a statement of what happened, not why it happened.

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Difdi
November 13, 2009 4:35 PM
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@Johncc: And yet, inability to pay a debt does indeed make you a credit risk, in the literal meaning of the words. Why someone cannot pay debts is unimportant to the fact that that person cannot make payments on them NOW.

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FDCPAGuy
November 13, 2009 4:35 PM
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yes a Partial Payment notation will be added to the account which 2 out of 3 bureaus will interpret this notation as a seriously delinquency. It will have a large impact on the fico score more than likely.

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FDCPAGuy
November 13, 2009 4:35 PM
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@FDCPAGuy:
Woops misunderstood, yes a settled for less will also count as a serious delinquency. If you go into a partial payment agreement it will also hurt which was what I was posting about previously. Also a settled for less mortgage tradeline will be coded as a M9 payment pattern and be picked up as a foreclosure by FNMA/FHLMCs automated underwriting engine.

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Dooley
November 13, 2009 4:35 PM
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First, let me start with the wording. From reading the headline about \"reduced payments\" (plural, payments) I was thinking this meant that you call the creditor and say \"Instead of the minimum payment of $200 per month, can I have reduced payments of $100 per month until this is paid off\"

Reading further, I see you mean \"Debt Settlement\" or, if you owe $5,000 - making an offer to accept $3000 as \"payment in full\" -- Of course this is going to affect your credit, since it is a settlement. But at least it's paid off, and you really don't need MORE Credit right now -- Take the credit score hit and worry about your score when you are out of debt and able to take on new credit (responsibly)

Anyhow, I want to point out ... Besides hurting your credit score, that settlement will do something else, as well.

In my example above, you just received \"income\" of $2,000 (the $2,000 of the debt that they \"forgave\" ) and guess what? You have to pay INCOME TAX on that forgiven amount, or in this case, whatever your tax bracket deems as tax for $2,000 of income.

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FDCPAGuy
November 13, 2009 4:35 PM
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@Dooley:
yeah I read the title and thought of a partial payment arrangement too right off the bat. In reality either situation is going to hurt your score.

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nucwin83
November 13, 2009 4:35 PM
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@Dooley: When settling accounts, try to make an agreement that the payment will constitute a payment in full, and will be reported as such on your credit report (make sure you have it in writing). A lot of third party collectors will cave to this if they know they'll get a payment out of you. You have to word it correctly (explicitly offering a payment can reset the clock on the statute of limitations for them to sue for the debt) but it does work. You may or may not receive a 1099-C when doing it this way, but at least it'll show up on your report as paid in full rather than settled.

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speedwell (!)
November 13, 2009 4:35 PM
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@FDCPAGuy: I have a creditor (a hospital) proposing that I pay a reduced amount. However, I don't owe them a penny of any amount. A rep from my insurance company and I went over every line item, and the total, minus the items and services they said I received that I didn't actually receive, was less than the insurance company actually paid them. I sent them a letter with the fraudulent \"extras\" circled and told them to kiss my ass.

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hotdogsunrise
November 13, 2009 4:35 PM
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@speedwell, avatar of snark: It's not just hospitals. My great-uncle was in a nursing home toward the end of his life. They routinely sent him several \"bills\" over the course of one month. They were sending out duplicates of the same bill, even after it was paid. If it weren't for my mother taking care of his finances, he may have sent in a payment for every bill. When my mother asked why they sent duplicates, they stated it was their practice and it helped to remind people. Not cool.

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mac-phisto
November 13, 2009 4:35 PM
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@speedwell, avatar of snark: ugh. i hate hospitals. i didn't realize how abusive their collection practices were until i started working in lending.

one hospital near me bills people solely by sending them to collections (& reporting to the bureaus). it's depressing when virtually everyone that walks in your office is a \"credit risk\" simply b/c a hospital doesn't have ethical billing practices.

i really wish someone would regulate medical billing practices - these collections are frequently responsible for adverse actions in credit applications.

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FDCPAGuy
November 13, 2009 4:35 PM
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@mac-phisto:
Your disdain for hospitals is shared by myself as well. We in the lending business do have a leg up to help people though. If you don't know about rapid rescores you should research them. Hey at least when FICO 08 gets accepted by FNMA/FHLMC and the secondary market the small medical collections won't matter.

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mac-phisto
November 13, 2009 4:35 PM
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@FDCPAGuy: i've been trained on rapid rescore, but the cost of the service can rarely be justified by the results it yields. we mostly do consumer lending (signature & car loans) over short periods of time (<60 months). when dealing with our HE products, rapid rescore makes sense, but not so much on the consumer side.

i think we shell out something like $100+ for the service when we use it...

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FDCPAGuy
November 13, 2009 4:35 PM
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@speedwell, avatar of snark:
Plus paying them won't do any good score wise. Personally I'd next contact the original creditor (hospital) and express to them that there were fraudulent items on your bill. Perhaps they had an employee who has been doing this. The original creditor also has the ability to recall it from collection and get the collector to remove it from credit which is what you want. If the hospital put's up a fight you might want to ask your insurance who you should contact for medical fraud in your state and also your AG.

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speedwell (!)
November 13, 2009 4:35 PM
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@FDCPAGuy: Excellent advice. Rest assured I'm already on that path. :)

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BritBoy
November 13, 2009 4:35 PM
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Yep, misleading headline for sure. Reduced payments is very different to a negotiated reduced outstanding balance which most certainly would reduce credit worthiness.

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csparks
November 13, 2009 4:35 PM
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Or do I am going to do and file bankruptcy (no cc's btw), and take the credit blow, and within a year of showing off good payments, you will be much better off.

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2 replies
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BritBoy
November 13, 2009 4:35 PM
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@csparks: No CCs ? What debts are you planning to discharge through bankruptcy ? I would assume you have no home mortgage ?

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HIcycles
November 13, 2009 4:35 PM
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Speaking of killing your credit, I just learned this little gem from my mortgage loan officer:

If you have a delinquency and you pay it off, it, too, hurts your credit score.

I learned this the hard way. Apparently, some many years ago, when I canceled by T-mobile account (at the time, VoiceStream. Remember VoiceStream?), I had a balance of something around $50. Obviously, I never paid it (hence the delinquency), but when I got a collections notice, years later, I was like, oh, I'd better pay this. So I did. Little did I know that my score would drop by almost 20 points!

Can someone explain the logic of this to me?

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BritBoy
November 13, 2009 4:35 PM
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@HIcycles: The logic is that, over a large population, experience shows that those who have or had delinquent debts have higher likelihood of future defaults.

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HIcycles
November 13, 2009 4:35 PM
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@BritBoy: I guess I should be clear: my score dropped after I made the payment (settlement, I guess, in this case).

So what I'm getting at is that I was dinged twice for this delinquency: once for having the delinquency (because it's reported every month that it's outstanding) and once when I pay it off.

This is also a lesson to check your credit report more often than once every few years...

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FDCPAGuy
November 13, 2009 4:35 PM
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@HIcycles:
Woops sorry about the almost blank post. I can explain it.
A paid and a non-paid collection carry the same impact on a score. The FICO model does not care that you made good on bad debt. It cares that the bad debt happened in the first place. This collection most likely had been on your report for a bit. Had stopped reporting, stopped impacting the score as much since it hadn't reported in like 2 (for instance) years. Then when you paid it, Bam, the collection agency updates it bringing the data more current and meaning it now had a larger impact on your credit.

From a FICO standpoint one of the worst things you can do (aside from have one in the first place) is pay a collection and not negotiate to get it deleted. You lose all leverage, it stays on credit longer, and doesn't help your score at all.

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subtlefrog
November 13, 2009 4:35 PM
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@FDCPAGuy: How do you negotiate to get a collection deleted? I mean, if it is something you legitimately owe? This is entirely news to me.

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FDCPAGuy
November 13, 2009 4:35 PM
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@subtlefrog:
Credit reporting in any form is 100% voluntary.
@420greg:
Blah balh... contacts... Honestly I get collections to agree to delete almost every working day of the month. Most of them don't care about contracts they care more about getting the money. They are a business so I just make it a business decision for them. Quid pro quo, you get the money you want and the customer gets better credit. No one really loses.

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420greg
November 13, 2009 4:35 PM
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@subtlefrog:

You can't really ask them to remove it from your report, that violates their contracts with the credit reporting agencies.

You tell them you will pay it if they completely remove you from THEIR system. They can do this since it is their database.

After you are out of their system, you dispute it with the credit reporting agencies and the will not be able to verify with the reporting company since you are no longer in their system.

This causes the bad trade line to fall of your report.

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HIcycles
November 13, 2009 4:35 PM
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@FDCPAGuy: Thanks for the explanation. Learn the hard way, pay the hard way.

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lmarconi
November 13, 2009 4:35 PM
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i hear that breathing hurts your credit score...

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subtlefrog
November 13, 2009 4:35 PM
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@lmarconi: But at other times, not breathing, can, as well.

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wcnghj
November 13, 2009 4:35 PM
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\"Settled\" or \"Paid\"

FICO doesn't care, a negative is a negative.

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Tank
November 13, 2009 4:35 PM
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@wcnghj: Nope, FICO don't care... but the lenders do. Who wants to loan money to someone who bought a tv for $1,500 then settled with the credit card company for $700?

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wickedpixel
November 13, 2009 4:35 PM
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If the creditor is willing you can negotiate what gets reflected on your credit report into your settlement.

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duffbeer703
November 13, 2009 4:35 PM
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Who cares about credit score... you also get an IRS bill. The IRS considers forgiven debts to be income. So you trade a stupid credit card bill into tax bill.

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treimel
November 13, 2009 4:35 PM
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@duffbeer703:


In what way is forgiven debt *not* income? If you don't think it is, I have a little deal for you: I'll go into debt to you for ten thousand dollars, then you go ahead and forgive that.

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tankertodd
November 13, 2009 4:35 PM
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No Shit Sherlock. If you have problems with credit why wouldn't your credit score take a hit?

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FDCPAGuy
November 13, 2009 4:35 PM
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@tankertodd:
You know there are a lot of things about credit I'm sure you don't know that I do. If you think something is common since and a worthless story maybe just not comment on it.

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Ronin-Democrat
November 13, 2009 4:35 PM
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it seems no matter what you do that is good for you is bad for your score.
drop a card because they raise your rate to astronomical rates hurts your score.
settle your debt for less hurts your score.

ignore those and other things and do what is best for you financially.....

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H3ion
November 13, 2009 4:35 PM
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If you used the alternative explanation of the headline, and negotiated a different payment schedule with a creditor (lower payment, longer term just for example, or interest only for a few months) would that negatively impact a FICO score? The lender probably should continue to report it as \"paid as agreed\" even though the agreement may have changed a bit, or maybe not. Any thoughts on this?

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LeChiffre
November 13, 2009 4:35 PM
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I know what all of you are saying, but my home lost 25% of its value. How am I going to get it back? Why should I pay $30k for something that doesn't exist? I didn't buy a house that was out of my price range nor am I broke paying for the mortgage, but I'll never gain that money back. No way, no how. Hell, I may as well give one of you folks in this forum $30K for nothing, because that is what I am doing to Wells Fargo. What they're getting is free money from me; nothing less than that.

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madanthony
November 13, 2009 4:35 PM
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@LeChiffre:

What they're getting is free money from me; nothing less than that.

Huh? They aren't getting free money. When you take out a mortgage, they write a check to the seller for the amount you agreed to pay for the house. You are paying them back the money that they paid to the seller, plus interest. They are doing exactly what they agreed to, and not making any more than they would had the value of the house stayed the same or gone up.

I'm in pretty much the same situation - $210k house bought in '06, another one in the development sold a few months ago for $175k. Not thrilled, but it's not the bank's fault. It's mine, although I made what seemed like a good decision at the time with the info I had available.

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PunditGuy
November 13, 2009 4:35 PM
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@LeChiffre: Should Wells Fargo increase your mortgage if your house value goes up?

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Rachacha
November 13, 2009 4:35 PM
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@LeChiffre: Please make the check payable to:
Rachacha
Washington DC 20006


Seriously though, you purchased a house and it is no longer worth what you paid for it. Same thing happens with a car, or clothes purchased on a credit card. Products depreciate, and unfortunately, it seems as if you purchased at the peak of the housing bubble. Stay in the house as long as you can, you may break even, or maybe make a profit, but when it comes time to move just suck it up and cut your losses.

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GuidedByLemons
November 13, 2009 4:35 PM
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@LeChiffre: Not sure what this has to do with the post, but uh:

You're paying $30k of a debt you owe. When a bank outlays $120,000 (or whatever) for you to buy a house, you owe them $120,000, regardless of what happens to the value of the house after the fact.

You might as well ask why you should pay a credit card balance you racked up on groceries. Why should I have to pay for food that's long gone down the sewer? I'll never get that food back!

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Verucalise (Est.February2008)
November 13, 2009 4:35 PM
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@GuidedByLemons: I completely understand your position, but a lot of people feel the same way that LeChiffre feels.


I think LeChiffre feels his house lost 25% of it's value- $30K down the toilet on TOP of the interest he's paying on the house. All you can do is hope the housing market comes back up sufficiently to remedy that, or else he can try to make repairs/small renovations to the house over time to make it worth more money. He invested in a home because they usually retain value or raise in value, and he probably feels like he made a sound financial decision in buying a home.


In the end, in some areas- it was almost like handing money over for nothing. He didn't sign up for that, but no one did unless they signed a mortgage they didn't understand. (and you friggin people know who you are) Can't blame the guy for being upset and venting.


Sorry, LeChiffre.

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joshua70448
November 13, 2009 4:35 PM
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@Verucalise(countingcalories): Honestly, though, if he is using his house as an investment instead of just a home, then he's asking for trouble. It's like taking out a loan to buy $120K worth of stocks that drops $30K in value, if you treat it like that. And remember, the value of the house doesn't mean squat until you go to sell it, just like the stocks (unless you have PMI, of course). Anyone complaining about falling house values that isn't trying to sell needs to just wait it out and see what happens.

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captainpicard
November 13, 2009 4:35 PM
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While this article may be absolutely true and non misleading i think that most people take thier credit scores too seriously. Now don't freak out and think that I am saying something I am not. Credit scores are very important, BUT, you have to take a look at your current situation vs. your long term situation. 5 years ago my wife and I decided we needed help with our debt and we settled somethings with some credit card companies. We knew it would be a hit to our credit scores but our long term plans didn't really have any pressing credit needs. To help us in the current situation (get out of debt and start saving) we took the hit so we would be better off.


tl;dr; Sometimes taking a hit in credit is worth it if the short term gain outweights the semi-long term (7 years?) effects.

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Rachacha
November 13, 2009 4:35 PM
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@captainpicard: Agree completely. We have taken advantage of 0% balance transfer credit card offers for some time. At our peak we had almost 200K (mortgage, and loan we took out for a home improvement) sitting on 0% cards. When we started, our score was perfect (800-820), but as we had an extrordinarially large balance on credit cards our scores tanked(probably near 550-600 at its lowest). We made every payment on time, and usually paid a bit more than the minimum each month. When the 0% offer ended, we paid off the card in full, or moved the balance to a low interest HELOC that we had. In four years, we have paid down most of the balance, and our credit scores bounced back in the 780-800 range again. For us, taking the hit was worth it, as we paid off a 15 year mortgage in 5 years simply because we were paying no interest on our loan, and we had no immediate need for credit, so we could afford to take the hit on our credit score.

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roat
November 13, 2009 4:35 PM
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@captainpicard: Hear Hear! I got forced into a 13 a couple of years ago in the wake of an ugly divorce. Freaked at first; guilt, shame, sense that I had betrayed all the early training from Depression-era mom and dad. Stepped back, took a deep breath, and decided to move forward on a cash-only basis. No problems. Lifestyle is Just Fine. True soulmate and I are perfectly happy. Nine months of liquid padding in the bank as a job loss hedge, growing all the time as the 13 effects slowly taper off. Mid six figures and growing in the IRAs, with plenty of years before the magic R date. Projected seven figures by then.

And Visa, MC, and their ilk will *never* see my business again. It's most definitely doable! Long term thinking FTW!

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Verucalise (Est.February2008)
November 13, 2009 4:35 PM
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JUST A TIP: Not every company is willing to do this, but I HAVE done it. If a collection company or original company are willing to work with you on a settlement offer, you can always tell them:


\"Hey, I pay the amount you want, IF you don't use the terms 'settled' or 'settled in full' on my credit report. I want the credit report to read \"PAID IN FULL\".


You just don't trust the company on blind faith, either. You fax in an agreement for them to sign and return, it's all quite simple actually if they are willing to work with you.


My credit score didn't exactly go up from doing this with a few small credit cards in collections, but at least it didn't drop 100 points.


Worth a shot if you're desperate.

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sammy_b
November 13, 2009 4:35 PM
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@Verucalise(countingcalories): correct me if I'm wrong, but isn't putting that kind of misinformation on credit reports illegal? I mean companies may do it but technically they aren't supposed to alter the facts of what happened.

Does anyone know what the penalty is or if it can change your credit report retroactively once discovered?

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420greg
November 13, 2009 4:35 PM
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@sammy_b:

It may be a breach of a civil contract. But it is not illegal. You cannot be charged with a crime for doing it.

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Verucalise (Est.February2008)
November 13, 2009 4:35 PM
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@sammy_b: The way I see it, is that sometimes a good portion of our credit report is INACCURATE to begin with, and they are unwilling to change it. Think about the fights people have for YEARS to fix that- it took me 6-8 months to fix my SO's credit that was inaccurate and we had PROOF it was.


I'm not talking about $10,000 in debt- We are talking like $2-3K. I'm not saying it doesn't damage you because you still went into collections- but it doesn't put you in any worse position. It's take me 6 years to still fix mine up after divorce.

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FDCPAGuy
November 13, 2009 4:35 PM
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@sammy_b:
It's not illegal really. Heck I've had places delete charge offs if you paid them. Credit reporting is 100% voluntary.

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quail
November 13, 2009 4:35 PM
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I say go for the reduced payoff amount if you have to. That ding on your score lasts 7 years, it may not be reported to all credit agencies, and as long as it's the only thing on your credit report it won't keep you from getting other credit cards.

But weigh the pros and cons carefully. In the end, as it was for me, the reduced payoff can save 3 to 4 years of working for the credit card companies and comes with only a 7 yr penalty on your report.

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suezahn
November 13, 2009 4:35 PM
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Less than two years ago, the only debt I had was my mortagage and my car. Then I got hit with two seperate major medical situations, both of which were conveniently ducked by my \"good\" health insurange package from work. (That's a whole other rant...) Now I'm literally struggling from month to month to make minimum payments, cutting everything I can, and have only stayed one step ahead so far because of little bits of money falling into my lap here and there, but it's nothing I can count on. Because my full-time job requires me to be available for overtime without notice (although hardly any overtime happens anymore), I'm stuck in a catch-22. So either I try to negotiate reductions in payments/debt, or I eventually default on something, which is only a matter of time. I have no idea what to do anymore, I'm desperate, and at this point anything I do--or don't do--will hit my credit score...so which is my best option?

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RBraden
November 13, 2009 4:35 PM
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Citibank is unfriendly. They canceled our Shell card because we never paid any interest. We just won't buy what we can't pay for in thirty days.

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