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Advice on How to Settle with Creditors

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Mark Cappel
UpdatedApr 29, 2024

I have recently come across $6K that I want to use to pay off my old debts that total $15K, where do I start? Please help.

Well I guess I'd like to know where to start. i just sold my car and got 6,000 to make a start. i have old debt from when i was 18. now I'm 25 and need to clean it up for my future. i owe credit cars, a bank, misc stuff like old phones, student loan, irs, some doctor bills that were supposed to be covered by medi cal but now there coming at me for them etc. theres even some stuff on there i have no idea about. but i figured with 6k its a goos start. i just dont know what to do!!!! i roughly owe about 10-15,000 dollars. I'm sure I can negotiate but i dont know the ins and outs. is this something you can help me with??? i have all my bills written out with phone numbers etc. WHAT CAN I DO??? the worst thing is i finally got a job that i make descent money in and now everyone is coming at me from all different angles. then i claimed wrong on my taxes so i owe 4,300 this year in taxes. PLEASE HELP

Given the improvement in your financial situation and your desire to negotiate settlements with your creditors, I would encourage you to contact a debt negotiation firm to assist you in reaching favorable settlements on these debts. Based on the information provided in your question, it sounds like many, if not all, of your debts could be enrolled in a standard debt settlement program, as the debts you describe are unsecured obligations. Debt settlement programs generally work with your creditors to negotiate reductions of as much as 50% to 60% or more of the balance you owe. In most cases, debt settlement clients save up money for lump-sum settlements over the course of two or more years; however, since you have $6,000 to put toward the settlement of your accounts, a good settlement firm may be able to resolve all of your debts in a matter of months rather than years. If you would like to read more about debt settlement programs, I encourage you to visit the Debt Negotiation page. In addition, if you enter your contact information at the Savings Center, we can have one of Bills.comÂ’s preferred debt negotiation providers contact you to further discuss the debt relief options available to you.

While you may be able to negotiate with your creditors yourself without professional assistance, I think that you would be wise to consult with a professional to discuss the costs and benefits of hiring a company to assist you with negotiating your debts. For example, a professional debt settlement agency should be able to tell you which of your creditors are more difficult than the others, and therefore which accounts should be settled first. In addition, professional debt negotiators have had time to build important relationships and establish contacts with many creditors, something that the average consumer does not have. Finally, I have found that, in many cases, consumers find it very difficult to negotiate with their own creditors due to the emotional investment they have in the situation; they allow threats made by their creditors to intimidate them into less favorable repayment terms than may have been negotiated by a third party advocate with no personal involvement in the debt. On the other hand, a debt negotiation firm will charge you a fee for its services, so you must consider the benefits versus the costs to determine if hiring a debt negotiation firm to represent you is the right choice for your circumstances.

I strongly encourage you to speak with a professional debt negotiation firm to discuss your situation and help you determine whether or not a debt settlement program is a good choice for you. Additional information regarding debt negotiation and other options available to assist consumers in resolving their debts, such a credit counseling and debt consolidation, is available on our Debt Help Services page.

I wish you the best of luck in resolving these debts, and hope that the information I have provided helps you Find. Learn. Save.



Debt statistics

Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Housing debt totaled $12.612 trillion and non-housing debt was $4.891 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

Collection and delinquency rates vary by state. For example, in North Carolina, 15% have student loan debt. Of those holding student loan debt, 8% are in default. Auto/retail loan delinquency rate is 4%.

While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.



BBill, Mar, 2009
I can understand it being a matter of principal, but being that you are in need of a mortgage, I would weigh the benefits of the time and effort you will need to put in to correct this against the amount that you have to pay. You can do several things to try to resolve this, starting with disputing this with the credit bureaus. It will take time, as each of the bureaus will take up to 90 days to verify your dispute request.
BBob, Mar, 2009
In 2002 I tried to start a small business. I contracted with a company so I could accept credit cards. There was a stipulation that I had to keep this service for 6 months or pay an early termination fee. I kept the service for 6 months + 1 day and cancelled it. The company billed me for the early termination anyway and despite numerous disputes, refuses to remove from my credit report. I am trying to buy some property and the mortgage lender requires that this be taken care of. I called the collection agency now involved and was told they would require the amount in full (which has now doubled) It is a matter of principle to me but I would pay them a resonable amount even though I don't feel I owe this! Is there anything you can suggest?
BBill, Jun, 2008
Please keep in mind that even if you have enrolled all your accounts in a settlement program, the credit issuer or the debt collector can still charge interest on the debt till the point an actual settlement is not reached. You should talk to your settlement company because; even if the account went to court they could still could have negotiated a settlement without the judgment being issued. I suggest that you talk to them about this and if they say they cannot do anything, go ahead and discuss a payment arrangement before the other creditors take you to court as well. Remember, soon this particular judgment will start showing on your credit report and all other creditors will be able to see it as well.
kkathleen, Jun, 2008
i just went to small claims and judgment was given to the collection agency....the credit card was 900.00 now it is 1300.00 because it was sitting in a debt settlement business since last nov,of o7....anyway can this collection agency slap on a 12%interest on this bill? i thought i just pay what i owe.....also how many times in one year can they take me to small claims? there is another credit card sitting there that could also go to small claims if i don't work something out with them...that one is up to 3,000 right now... thankyou for all your help. kath.