Could I pay off old credit card debts and get new credit cards?
No,. Paying back defaulted credit card accounts (charge offs) won't really help your credit rating. These defaults stay on your credit report for 7 years....regardless of whether they're paid or not. Paying off old defaults on your credit report is a tricky move to make...be careful. Paying back defaulted credit card accounts (charge offs) won't really help your credit rating. Don’t renew contact with debt collectors over old debts (esp. defaulted credit card accounts) if you can only afford to pay small amounts per month...they don't want to be paid this way and doing so won't fix your credit. Your accounts have already been closed and making monthly payments will not re-activate these accounts and give you good credit again. http://creditgotoman.blogspot.com/2010/1...
Pay off credit card debt?
The only way that paying these collections will help your credit is if you get whats called a pay for delete agreement from the collection agency's this simply says that in return for your payment they agree to remove the accounts from your credit report. Make sure you have this in writing before you pay them a dime. Paying old collections without this agreement is worthless the only thing that will happen is they will show as paid with a $0 balance and your score will actually go down because when you pay them they become current rather the old accounts. If your not looking to buy a home for a few years and the collection agency's will not agree to this don't pay them. There is no way that your going to get sued for this small amount of money so just let them drop off your report. They can only be reported for 7-years from the date of first delinquency per the Fair Credit Reporting Act. Whatever you decide I wish you good luck.
What should i do when i pay off my old credit card debt?
A few things... Pay your bills on time. Use your credit, but pay it off each month, or at least pay more than the minimum due. Don't close down your credit card. Apparently in the US your credit is partly determined by your debt to credit ratio. So reducing your debt without reducing your credit will help you. If you're rebuilding from really crappy credit, consiter a secured credit card. It works much like a debit card where you have a certain amount in an account and can only spend that much. In other words, it's prepaid. Just take it one month at a time by paying your bills on time and using your credit card wisely. Keep track of your credit report, too -- watch it to see what is affecting your credit. It would also be good to make sure you're getting the best interest rate that you can. You can consolidate at a lower rate. That won't nessesarily help your credit score, but it saves money. Good luck. ^_^
Who do I contact about a 4-year old credit card debt?
Credit card companies and debt collectors have a limited time period in which to sue customers for unpaid bills of credit cards. That limit is determined by a state's statute of limitations. You must know you state's statute about limitation of Credit Card Debts. Debts that have lingered longer than the statutes allow are often referred to as "time-barred debts". Should you pay off your old credit card debt? The choice is up to you, but many consumers find it worthwhile to pay off their delinquent accounts for the sake of repairing their credit score. That three-digit number defines you financially, and a low credit score may keep you from getting a loan, an apartment, or even a job. However paying off a charged off credit card debt will not fix your credit rating and the debt will remain on your credit report for quite some time. Keep that in mind when you choose how to handle old debts. Never give debt collectors your bank account details. Before you even consider settling old debts, you need to know a few things. Before you can settle, you need to know how much you owed originally. Knowing how much you originally owed and allowing for normal interest gives you a place of power to negotiate from. There’s no method to debt settlement. The longer the debt has been outstanding, the more likely the creditor is to take a deal. A 5-year-old debt might settle for 30% of the original balance or it might not settle at all. However, in most cases, a 6 month or year-old debt will probably settle for 60–80% of the original. You just have to be persistent. But first you should get your free annual credit report only through http://www.annualcreditreport.com, Or call 1-877-322-8228, and Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
How do I pay off my credit card debt without paying the collections agencies?
When a creditor sells an account to a collection agency, the collection agency is entitled to whatever payment you may make. Paying back a defaulted/charged-off credit card will not restore your credit rating..Your credit report will be updated to a "Paid Charge-Off," which, while slightly better, is still a seriously derogatory item. Per the Fair Credit Reporting Act, a charge-off, whether paid, settled for less or not paid at all, will remain on a consumer's credit reports for up to 7 years....so you'll be stuck with damaged credit regardless of what you do. Many collection agencies that deal with defaulted credit card debt are highly aggressive and if you renew contact with them you may provoke really aggressive collection activity against yourself....be careful. If any of the agencies that have your debt are on the list of worst collection agencies below, you may want to reconsider renewing contact with them: http://www.budhibbs.com/am_worst_collect... If you're going to pay, keep all communications in writing....stay off the phone. There's a free fax service at: http://faxzero.com/ Offer 20% and go from there. Fax them a letter like: I am willing to settle this matter for 20% of the original amount.Your firm must send me a signed agreement on your company's letterhead that you will accept this amount as "payment in full" and that this issue will be settled. Upon receipt of this agreement, I will mail you a money order for this amount.
Old credit card debt. Any reason to pay?
You should pay your debt. Credit card debt consolidation comes as a great relief to all those who are plagued by multiple credit card debts. If new to credit card debt consolidation, all it does is to club up all your debts from multiple credit cards into single more manageable and easy to repay debt, which helps the credit card holder tremendously. Credit card debt consolidation has many benefits but the four listed below are typically more popular. If you are waiting to get rid of your multiple credit card debt, credit card debt consolidation might be the panacea for you. Here are the four great reasons. To reduce the debt burden This is the first and foremost reason of credit card debt consolidation. Too many credit cards, multiple credit card debts, varying repayment dates- all become too overwhelming , can rupture your financial well being and and impose a lot of burden. Credit card debt consolidation eases all this complexity and all your debts become one single entity and are now easier to repay. The first, as we just mentioned, is because your current credit card or cards are costing you far too much in annual fee or APR. Save on annual fee If all your credit cards have some annual fee, these numbers add up quickly and can appear quite a sum. When you consolidate your credit card debt you also get rid of all these multiple annual fees and might end up saving a lot of money. Read more from: http://www.credit-card-gallery.com/credit_card_debt_consolidation.html
The first thing you need to figure out is whether the creditor is legally entitled to enforce payment of the debt. The laws in the state where you live will specify how much time a creditor can take before they lose the right to sue you. These rules are referred to as a “statute of limitations”.For example, in California where I practice bankruptcy law, a lawsuit to collect a credit card debt usually must be filed within four years. After that, they usually lose the right to sue you.Assuming the creditor has already sued you or still has time to do so, your goal will be to settle the debt for as little as possible, on terms that you can afford to pay. Think of this as a bargaining process. However, settling a debt does not restore your credit.Before you settle old debts, find out if you are a candidate for bankruptcy. You may benefit from reading one of my blog articles on deciding whether to pay a debt settlement or file bankruptcy, Debt settlements or file bankruptcy? ⋆ My Bankruptcy Lawyer
Here’s how to manage your credit card debt, in 8 practical ways:Add Up Your Total Outstanding Balances - List each credit card account that you have with its monthly payment, outstanding balance, interest rate and interest charge. Than add them all and see how big is actually the impact of the debt in your life.Look for Transfer Offers - change with a credit card that has lower charges.Consider Debt ConsolidationUnderstand Your Budget - list all of your sources of income and also the expenses. Think about ways you can minimize your expenses and what you could do to earn more.Pay More Than the Minimum Amount Required - the future interest charges lower when you pay debt in advance.Ask for a Lower Interest Rate - there are not many banks who will be willing to do that, but why not give it a try?Focus Your Attention on Higher Interest Rate Debts First - this is a bit better than paying the debts with the lower balance first.Seek Professional Help - in case you find your debt difficult to manage.
Given the situation you describe you can expect a nice positive impact on your credit scores.The algorithms used to determine credit scores are complex and weigh factors such as longevity of history, ratio of available untapped credit, timeliness of payment, total amount of credit, and other patterns of credit use.The “perfect score” generally does not result in any “magic benefits” being unlocked by credit issuers, so if that is your goal you'll be disappointed. Of course if your goal is more modest, such as the best rates on mortgages, car loans, revolving credit, and other things a score over 740 or so should do the trick.Assuming you have no negatives ( like late payments) and several years worth of credit history the plan you lay out would very likely boost your score into the top range.Of course, more importantly, by paying off debt you’ll not have the interest costs eating away at your income which is a huge step toward building wealth.Once the debt is paid off you should resist the urge to accept offers of more credit which will surely come your way. Having too many account can hurt your score and be a temptation to overspend. If you do continue to use revolving credit cards, which can be a nice way to earn perks, be sure to have some system to monitor your spending so you can pay off the card before any interest acrues. For folks that always have smart phone with them there are many good options to track personal finance. Many utilize the information sharing features that banks setup for online banking to effortless allow you to see your overall finances, the most widely know such service is Mint — All in one
Credit card companies and collection agencies will go follow their normal process:CC provider will send your account to collections (either in-house or 3rd party)If they are unable to collect then your account will be charged-off and sent to another collection agency.If the 2nd agency is unable to collect, then your account will be sold to a debt buyer.The debt buyer will attempt to collect from you and might even sue you in court.If you are sued, then you should go to court and explain your financial situation.If a judgement is made against you, there should be nothing to worry about since they cannot take any of your SS money.Regardless if you’re sued or not; the collection efforts will likely continue, i.e. calls and letters. This is just in case you come into some money that isn’t SS.Your best plan of action is to contact your CC provider, if they still own your account, and explain your financial situation and ask them where you can send documentation, i.e. list of any assets, bank accounts, monthly expenses, total debt.Remember, communication is always the best approach to debt.