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Paying back collection agencies


Sam Sneed
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Good evening all, 

 

In 2007 I was laid off from my job of 7 years and could not find work until 2 years later. During the layoff from work my wife held is a float and did everything she could to pay bills but eventually it all came crashing down. I am now in a better place financially but my past bills are preventing me from getting a house and a car. My current finances are great but my credit history is horrid which is why I am here. Currently on my report my highest debt is 7k which stems from a repo back in 09, a judgement for 1600.00 and a couple of old cc cards between 400 and 600 dollars. As for active credit I currently have a secure card for about a year and pay it in full every month. Even though I have been great with my payments my score is still in the 500's. How can I raise my score? and how should I approach these agencies? I have heard calling them and making payments over the phone is bad, so how should I contact them to pay these? should I start with biggest debt first? or start with the small ones and work my way up to the 7k? 

 

Any advice would be greatly appreciated. 

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Are you in Cali or nev? Cali has a 4 year sol, while nev. Has a 4 year or 6 year sol. Are any of the accounts still within the sol?

Date of last payment plus one month will tell you.

Look on your credit report, how many have been sold to a junk debt buyer? It should say sold or transferred under the creditors name .

If you pay on any of them, you will reset the sol. Then you can be sued for the full balance, pulse interest and attorney fees. The CA's will do and say anything to get one payment out of you, especially if they are a junk debt buyer, because you would be agreeing to a contract, and that you owe them money.

What year did you get a judgement against you? They are good for 5-20 years, and can be renewed. That one would be the only one I would even consider settling .

If all of those accounts are past the sol, they will drop off your credit report 7.5 years after default. If you are past the sol I would dispute them one at a time with the credit reporting agencies as not mine, see if any come back as verified.

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I am in California, 

Thank you for the info. I would figure the judgment and the car loan would be the two I would need to pay. Can't the lender from the automobile loan eventually sue me? I will check my report, I know a few of them were sold to junk collectors. I will try to dispute them. 

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Calif. has a 4 year SOL, so any thing prior to that they cannot legally try and collect on. Everything will fall off your CR in 7 to 7.5 years from the DOFD. It would be foolish to attempt to pay anyone but the OC at this point. Also, as old as these debts are, they are not hurting you CR that bad. A CA or JDB will more than likely will NOT do a PDF and they sure won't give you anything in writing. Just ride it out for another two or three years.

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I believe it is still with the OC. edit:  I just checked my experian report and it looks like it is still with the OC. 

 

Also, the original loan (Auto) was with Wachovia, looks like it is now with Wells Fargo, is that something I should look into paying off? my only concern with that loan is I will eventually get served with a summons, which I do not want. 

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when was the auto loan defaulted on? month and year?

the judgement with the OC, they probably won't settle for less than 50%, but if you have the money offer them 20-30% and see what they come back with.  If they come back with greater than 50%, counter them with 50%.  Most will settle for 50% if you haggle, sometimes even less, so start low.

If the auto loan is greater than 4 years, they cannot sue you on it, but can still report on it for 7.5 years from the day of default.

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@Sam Sneed

 

If you need a car right now, and the only thing standing between you and a car is that judgment, ask dealerships if you will qualify for a loan if the judgment is paid.

 

If so, then contact the attorney for the creditor to discuss terms.  He may agree to a lower amount.  However, you do need to realize that interest has been accruing on the judgment.   If he doesn't agree to a lower amount, and if you can afford the full amount, ask if you pay the judgment, will he will motion for relief from the judgment.  Even if he doesn't, the fact that the judgment is paid would have to be reflected on your CR.

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Thank you everyone for the advice, I really do appreciate you taking the time to answer my question. I have one more for all of you. I currently have one secured credit card that I have had since March. With a year coming up my payment history has been 100% as I am in the habit of paying it off in full every month. This card has increased my score a little bit but wanted to know if I should get another one to help increase my score a bit faster? I have tried to apply for department store card but have not had any luck with approval. Should I just try to get another secure card? and who is a good company? 

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another secured card is probably not going to help you.  your score will come up enough to get an unsecured card if you can successfully get any of your other accounts off your report, or just wait it out.  Credit is over rated anyway.  Unless your buying a big purchase like a home, I would just work on cleaning up what you have.

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I am in California, 

Thank you for the info. I would figure the judgment and the car loan would be the two I would need to pay. Can't the lender from the automobile loan eventually sue me? I will check my report, I know a few of them were sold to junk collectors. I will try to dispute them. 

I would not make a payment on any of these as @Shellie said. The housing market is in the top of a bubble right now you should wait until home values drop again(2 years) as for the car by a used Toyota and gut it out, from what you said it the 7k debt will drop off soon.

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  • 4 weeks later...

Thanks again for all the advice everyone, I appreciate all of you taking the time to answer this thread. I have one more question in regards to California statute of limitation. There is a section that says the following

 

"These cases mean that in California, the clock starts when the moment the borrower defaults on their payments. If, for example, a payment is due on June 1 and it does not arrive by that date"

 

 

Does that mean the second I missed my first payment the clock for the statute began? or did the clock start the second they repoed the vehicle? 

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@Sam Sneed

 

I just want to chime in here about a car -- I have purchased my last two vehicles (in 10 years) at a Buy-Here Pay-Here place.  They are usually small (around here anyway), and only have used vehicles, and you need a down payment of $1-2000, but they don't do credit checks (or report to CRAs).  All you need is a few paystubs to prove you have a job and that you can afford the payments, and you're good to go!

 

I still have BOTH vehicles I bought from them, and they've both been paid off, and still run GREAT! 

 

So I don't know if you can find those kinds of auto sellers where you are, but it's worth a look.  That way you don't have to get impatient waiting for your credit to clear up! :-)

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