Okay, I%26#039;ll admit I screwed up my credit in my late teens/early 20%26#039;s... I have paid off all but 2 store credit cards and I have my two major credit cards (Chase Manhattan and Capital One) in the hands of attorneys that I have payment arrangements with. I%26#039;ve settled on a few of these cards (meaning I paid a rate lower than my actual balance to pay the card entirely off). I have not made a purchase using a credit card since January 2005! Do you think at some point in the future, I would be able to ever get a credit card again that%26#039;s not secured? Also, how long does it take after I pay off a card to get reported to the credit bureau as being taken care off? One more (phew!)- how am I supposed to save with this debt?! I%26#039;ve got a car payment, too ($318.00 per month- thanks to bad credit!)! Any pointers would be a huge help! Thank you kindly :)
Paying off debt?!?
Hey, well I%26#039;m glad that you%26#039;re taking responsiblity for your actions, and you%26#039;ve seen the err in your ways. I%26#039;m not going to be like a couple of posters on here and scold you for what%26#039;s happened in the past. People make mistakes, or the guy that put rubber at the end of pencils wouldn%26#039;t be a genius right now.
I%26#039;ll try to answer the questions that you had in order:
1. Yes, sometime in the future you should be able to get a credit card that%26#039;s not secured. Orchard Bank%26#039;s a good place if you%26#039;re rebuilding credit, but I want to say a couple of things first. Since you haven%26#039;t used a credit card in almost 2 years is a good thing, hopefully now you see how they%26#039;re supposed to be used very lightly to show activity, and in dire emergencies when your checking and savings accounts just won%26#039;t cover it. To be honest with you, a secured credit card would be a better option because you can control the credit line by adding to the deposit and most if not all the deposits gain interest while you%26#039;re buildling credit. This is a great way to discipline yourself to sock a little cash here and there without touching it. Any secured credit card that you get chances are will have a low limit and and high interest rate. At least with a secured credit card you get a fighting chance and you control the credit line.
2.Normally for anything that%26#039;s paid to the credit bureaus can take 30-60 days from when you paid it. Also, like the other poster said, it%26#039;s likely that you may have to pay taxes on the settled amount, so I%26#039;d definitely keep an eye on that.
3. How you can save is to evaluate your budget on everything that you spend and see what can you sacrifice. If you start off by what you can save for that day, usually the week, and ultimately the month will take care of itself.
Now, I don%26#039;t agree with some of the posters on here that you don%26#039;t need to use credit. I%26#039;ve used credit responsibly for years and I%26#039;m debt free. There%26#039;s an old saying that %26quot;It%26#039;s better to have something and not need it, instead of needing something and not having it.%26quot;
I hope this answer helps
Paying off debt?!?
閳?I am going through the same thing... but I%26#039;m 19... I got myself into some debt with a cell phone company and 2 checks written that I had the money for at the time, but when it went through it didnt... it got all messed up. I%26#039;ve legally paid for the two bad checks in full.. however I have this cingular bill for $1211.00... They have offered to settle for $606 which would be GREAT!, but I just dont have the money to pay them by August 4th when they want... I%26#039;ve written a zillion letters and have tried to make payment arrangements but the only options they give me are pay $1211, pay half now and half in 10 days, or pay the 606 by August 4th. I really need to work on my credit, because my fiance and I will be trying to get into a house very soon and I need the credit...
閳?Sorry I babbled... as for your situation.. did you get the car before or after you%26#039;d paid some of the debt? Because if you got it before, then take it back to the dealer/bank and see if you can get a lower interest rate and a lower monthly payment. In some cases they will do that. If you paid some off then got the car simply keep up on your cc payments and work on establishing better credit.
Good Luck!
Paying off debt?!?
Hon, go to this web site www.daveramsey.com (I%26#039;m pretty sure that%26#039;s his addy) and read about how to get debt free. He%26#039;s been there, I%26#039;ve bben there and now own a home free and clear...NO MORTGAGE. You can also listen to him on radio, but go to web site and find out where for your location. He really can help and does not ask for your money!!!
Oh, and did anyone tell you you will have to pay taxes on the money that the credit card companies %26quot;write off%26quot;? Yep, it%26#039;s true...we went through this three years ago and got a 1099 form from Household Bank and our tax accountant said it%26#039;s a good thing too cause they can come back in a few years and ram you for it and the interest. SO be careful about settling those cards folks!!
Paying off debt?!?
After all you%26#039;ve been through, why in the world would you ever want another credit card? It%26#039;s great that you haven%26#039;t used a credit card since 2005. There%26#039;s no reason to ever use one again. Unless you like being in debt and want to go through all this again.
1. Get on a written budget. You%26#039;ll be amazed at where you money goes. List essentials first: lights, water, mortgage, food. etc. Then your other bills.
2. Save 1000 dollars into an emergancy fund. Have the emergency fund so you don%26#039;t have to charge when Murphy comes.
3. I%26#039;m going to challenge your assertion that you have a 318 dollar car payment because of bad credit. You have a 318 dollar car payment because you bought the car you did. You could have found something cheaper, right? Consider selling the car and getting something cheaper.
4. Pay cash.
Paying off debt?!?
its good that you are taking steps to get your debts paid off. Your credit score/report is a lot like getting healthy/losing weight. It takes time and can be a big pain, but overall you will be able to make progress and there is very little that will have a permanent effect.
I would go ahead and contest the debts that you have already settled. In some cases a collector will no longer respond to the credit bureaus request to update data if there is no longer a financial interst in the debt.. if they fail to respond it will pop off your credit report... Also, when you settle I would try and write up a stipulation that the creditor will no longer make any verbal or written communications about the debt in any form in perpetuity... this will also prevent them from responding to your contesting the debt...
There are a lot of places that can give you help and guidance, I would just choose wisely,. with time and effort it shouldnt cost you anything.
Also, you may have to pay taxes on the settlements (IF the written off amount is over $600 and is applied against the amount of your insolvency...)
Best of luck
Paying off debt?!?
Inform the credit card company about your emergency situation and the debt it caused. Explain to them your financial condition, and any foreseeable improvement that you are able to visualize. Credit card companies thrive on their clients and they don%26#039;t want to loose them. A client who is willing to repay all the debt is a very good asset for them, which they would like to keep forever.
If you are unable to handle debt personally, seek credit counseling and get pertinent advice, so as to get rid of the debt as soon as possible.
If you have more than one credit cards and the confusion on handling their repayment schedule caused you this debt, try debt consolidation. It can be both secured and unsecured. Debt consolidation will help you turn multiple credit card debts into a single one with easier repayment option. Read more from: http://www.credit-card-gallery.com/artic...
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