Options to Clear Up Your Outstanding Debts

What happens if you start using a CCCS company and they get your monthly payments all set up. You make all of your payments on time and they pay all of the payments on time. The bank not goes defaulted (if you read my earlier posts this would make sense) but your credit report goes down the drain and your get charge off and creditors start calling you again. Some from outside or third party collection agencies trying to collect on a payment that you are already making.

Well, you have a few options.

1) Set up a new payment structure with the creditor that is now calling. Your bank note is already charged off so at least you are paying it back. Before you take this method make sure to call the bank you took this loan from, as if they outsourced it to a third party collection agency they will give you that information.
2) Stop paying all together for that loan. Once your loan gets charged off your credit report will not get updated to Paid - Charge off or Settled - Charge off until you don't owe them anymore money. The original balance will still show as delinquent for as long as that payment is outstanding. What I would do, hold all that money until I had enough to settle with. Even though companies are going to tell you that they want the full amount or nothing, you should still be persistent.

Working in this type of collection department we would take settlements sometimes as little as 40-50% of the remaining loan balance. Rarely any lower but that's about the standard.

Before you look toward this option make sure that this company that is contacting you isn't looking toward the legal option. A judgement is one of the worse things that can happen to your credit history as it will remain there for approximately 10-20 years. How do you know if a judgement is possible? Well if you owe less then $5000.00 it's probably not profitable for a company to process a judgement because the legal fees will exceed the $5000. Sometimes its possible for the amount to not be a factor as some banks will just send the note to a lawyer regardless of the amount owed, so make sure you check.

3) Your third option is to dispute the claims. Sometimes a dispute will remove the debt from your report all together. Even if you owe the money you can always depute it. In order to do this you must submit a letter in writing to all the major credit bureaus. The letter must be clear and concise, and shouldn't run on about irrelevant information. It should have the account numbers, then credit report information and the reason for the dispute. Many times this works because if the creditor doesn't get back to the credit bureau in 30 days or less the whole thing is marked as requested in your dispute. Banks are usually so busy that they don't get to the disputes for more then 30 days.

4) The fourth option is Bankruptcy. Although it might seem like the worst option, sometimes it is the best option. Bankruptcy can be very costly, as it might cost about $1200 dollars just to retain a lawyer and file, it will completely eliminate all judgments and money owed. I will be writing another post on this later, so stay tuned.