Hi guys. I've been lurking for a few weeks and have decided to make my first post. I could really use the help.... Here's my situation: -My wife and I have about 60k in CC debt spread over a bunch of cards. -The average interest rate is probably 13-17% with some as high as 30% and some as low as 5%. -We've never been late on a payment, but with interest rates and minimum payments rising, we're absolutely stretched to the limit. -A relative is bailing us out with a 60k, no-interest loan to be used to pay off our cards. I'm looking for some advice and opinions.... 1. Should be pay the 60k in full and get the creditors out of our lives for good, or should we try to negotiate for lower amounts? 2. Will being able to offer a lump-sum to the creditors put us in a better bargaining position? 3. Do we need to stop making payments to get the creditors to start talking settlement with us (I've read conflicting reports). 4. If we go the settlement route, is there a way to go about it that will (somewhat) preserve our credit score? I'm willing to settle for more (70-80% as opposed to 50%) if it means maintaining a good credit score. Thanks for the help everyone!!!
Creditors usually will not settle an account for less until the account is about 6 months past due.... maybe 4 months. If you want to preserve your good credit, and don't mind being indebted to your family member, then I would suggest using the no-interest loan to payoff the cards.honeycomb
You want to pay less than you owe and still have good credit? The point of a credit rating is whether or not you pay what you owe. If there is some way not to pay what you owe and keep good credit, it defeats the purpose of the credit rating system. You have good credit because you paid your bills that report on time and didn't make mistakes. This is valuable. You've been given a chance to get out from some serious difficulties with a no interest loan. It is interest, high interest, that gets people. Pay off the credit cards, stop using credit cards until you learn how to use them to your advantage, and pay back this kind family member who is going out on a limb for you.
