Debt Reduction- Advice On Credit Card Debt Reduction, Debt Reduction Services, And Debt Reduction Plans

Doran asked:


Most recently, I checked my credit report and credit score. All of my credit score from the 3 credit bureaus stated that my score were between 725 and 746, yet two of my creditors reduced the amount of available credit on my accounts?? What in the hell is going on? Is this a reaction to the recession? Not only that, I just paid 20k of my credit debt last month and all of my other credit cards, the balances are below 1k.

Patrick

jhaypizzle asked:


I currently have one bank-issued credit card, which I have had since 2004. It has a medium balance but a high limit. I have a few other store credit cards, which were opened in the past few years, but never near each other; they each have low balances and relatively low limits. I do not intend to make any major purchases, move within the next few years, or do anything that would require a significant look at my FICO score (which is good-excellent.)

I would simply like to increase my credit score for when I am ready to purchase a car, secure a home loan, etc. I know that increasing my credit-to-debit ratio is a major factor in my credit score, but how does that compare to reducing my total credit age? Will opening another bank-issued credit card (at another institution and a different card company) and a widening to my debt utilization ratio be enough of an improvement to my credit to sufficiently counter a reduction to my credit age?

Thanks for the help.

Greg Bedoya

Womp Womp asked:


I called into Chase today to try and settle my debt with them. When I first called, they kept asking me which account would they be setting up payments from. Finally, I made it clear that I would not be making that payment today.

After I explained that I had mounting medical bills and an increase in housing costs and wanted to settle, they automatically offered a 40% reduction (which is $2,700). I told them I cannot pay 40% because that 40% is at LEAST interest charges that they added and were not for purchases I made. I told them I have no problem settling for the actual purchases I have made. They still did not budge and let me know that a $200/month for next 3 months still stands for the next 10 days to get my account current.

Ideally, I want to pay under $2,000. Does anyone have ideas of how I can settle for less? I’m not trying to be a cheap a-s; I just want to pay for my purchases and not any extra to such a gutless bank (so they have been to me).

Thank you!

Sandie Portilla

Ani Solk asked:


Short version: I have several medical bills in collections and am anticipating a windfall that will allow me to partially pay off some or all of them. I would like to know what course I should take to defend, repair and improve my credit. I would like to avoid litigation.

Long version:

A few years ago I was admitted to the emergency room. I was uninsured and unemployed, and not eligible for Medicare or Medicaid, and could not afford to pay the sizable bill that I incurred. After some modest attempts to receive charity aid or reductions in the size of the bill (the individuals I got in contact with weren’t very helpful), I essentially ignored the bills (which I received from the hospitals and various doctors/medical groups). Without getting too specific about how much I owe, I’ll just say it’s a substantial amount (particularly for me, an unemployed student), but after counting them all they come to under $20,000.

Most or all of the bills eventually went to collections. I haven’t made any payments. I’ve moved once and have received some bills after moving, but not many recently (within the past year). None of the collections agencies have been particularly aggressive about pursuing the debts, though I don’t have a land line and usually don’t take calls from unfamiliar numbers, nor do I check my voice mail.

From what I can tell, I’m receiving collections notices from about seven different agencies on behalf of seven or eight different groups. I’m still in the process of going through all of the notices and sorting them out. One bill from the hospital is by far the largest, constituting what seems to be about 65% or more of the debt — the next largest collections claims I can identify are only about 7% of the value of the biggest bill. Some of these mid-sized debts I suspect were passed through multiple collection agencies, as there are a few of roughly the same amount. I’m just not sure though.

I’ve recently taken advantage of my annual free credit reports from two of the reporting agencies. Both reports featured two negative items — one from something unrelated to the medical issues, an oversight I took care of about a year ago. The other negative item was a past due balance noted as being in collections that appears related to my ER stay — the balance listed is relatively small and I do have a few bills that match the amount listed on the report.

I also took advantage of a trial credit score tracking service with myfico recently and I think it reported as it being something like 630. I also recently joined a credit union, and while opening my account the representative told me that my credit score came back as 661.

I am expecting a windfall soon in the form of an inheritance. There may be enough to cover all of the bills. I would like to honor my legitimate debts, though only in a way that actually stands to improve my credit rating, and reduces the chances that I see the inside of a court room over these matters.

If I could trim the amount owed, that would also be welcome. Even with the inheritance I won’t exactly be in robust financial shape, and can’t afford to spend money that I don’t have to. While I am appreciative of the services performed by the hospital, nothing they did significantly improved my state of health and as is often the case with the uninsured, I believe I was overcharged in the first place.

The hospitalization occurred in Florida, where I still live.
I have no ongoing debts besides the medical bills, apart from one collections notice for a sizable amount that I believe may be fraudulent or the product of identify theft. I’m investigating that as well.
Thank you for the helpful advice, CatDad.

A couple other things:

You say that a negative item on your credit report remains for 7 years. Is it possible to have such items removed? I believe it must be since ID theft/fraud victims must have some way of mitigating the damage done by illegitimate debts. Some research I did seemed to indicated that you could negotiate with the collections agency to resolve the debt in such a way that they perform a “deletion” of some sort. I’m unclear as to whether or not that would actually improve the look of my credit report, but it made it sound that at very least, it would prevent the report from getting any worse.

Which is a concern because I’ve read that in some instances, paying off the debts can actually do more harm to your credit report than good, because the paid debt is marked as a “fresh” item or transaction that has a greater impact on your credit rating than an old, unpaid debt. I also fear that by paying these debts, the ones that aren’

Bart Schraub

sigchiguy asked:


There are so many websites for those credit reduction companies but I am weary based on the charges that may incur. Are there any companies that can legitimately help you get out of more than 15k in debt?

Natalie

Blue asked:


You know…those ones on the tv guide channel that say they can get credit card companies to agree to slash what you owe them. I’m sure you have to pay these companies a fee – but are there any other negative consequences to doing something like this? Does it hurt your credit score? And what does it even take to qualify? Just hoping to get some answers from people who have actually looked into it, done it or work for these companies before calling and getting the ‘big sell’…
Thanks – but no one has yet explained exactly how they reduce your debt. I mean, the only way you can get suckered is if you have to pay them BEFORE they get it reduced for you. Or is there some other way they can ***** you? Need more info.
NOBODY is explaining fully. I can get my debt slashed ON MY OWN? Just by asking? Really?
Cold, I wish I could contact you personally to ask if there are any specific books you know are good.

Gus Real

K s asked:


have 20k in card debt, how do i negociate it down to half or less? owe 320k on a home that could sell for 550k so can’t do bankruptcy and don’t wont lose my home. support myself on very low salary and drowning in debt help!!

Peter

Kelsey asked:


I have credit card debt from about 4 years ago totaling 674.51. I was contacted by a law firm that had taken control of the debt and they offered to do a debt reduction of 539.51. I told them that I would pay the full amount due. Their response was to tell me that I had to give them my account number and routing number to my bank account and they would take the money out. Now I do not have a bank account so my boyfriend offered to pay it for me, but he will not give anyone his account number and routing number for fear of being ripped off by this company. I offered to send them a money order, cashiers check, cash, use a debit card, or even send a check. They told me that the only way I can pay is over the phone with the account and routing number or they will sue me and take me to court. I have the money to pay and I want to pay them and save my credit but they will not take any other payment method. Is this legal? Is there anything that I can do?

Sammy Koogler

mairszee asked:


we were in good shape until we lost work , we are making a comeback but over the past three years we have been unable to reduce any debt it is about 15$ that we have. I don’t feel bad about it because we were able to stay in our house and have food and heat and( COMPUTER access lol) but I do not have a clue how to get it down we pay and it goes no place . I have a bad credit score because of this so that is not the issue for me. I know at this point our house payment is first . If we don’t make the payments it goes up if we make the payments it goes up we are going around and around but we are not making nearly the money we used to and our mortgage is still high ,we do not qualify for any assistance we have tried. What should we do , not pay and try and settle for a less amount . pay and not see any reduction. we have very low interest on them as it is .it is a waste of money to pay and no reduction on the balance.
should we take from our retirement to pay it off or is there some other way we are 40 yrs old and only one retirement plan my husbands I am self employed and no savings anymore

Lili Pinke

Ashley Smith asked:


I was considering filing bankruptcy this year, because I have been trying for years to get out of debt. Well I pulled my credit score and surprisingly it is above 600! I calculated my debt and it is only about $6,000 I talked to a few people and they did not suggest bankruptcy because the debt is so small and my credit score is coming up, and they did not suggest a debt reduction service because that will look worse on my credit in the end. I don’t make a lot of money to be able to pay the debts off one at a time, and I’m not sure how to go about paying off the remaining debt on my credit. Does anyone have any suggestions? Thank you!
Thank you all so much for the great responses! I am going to college, and right now I make about $850/month. I currently do not have any open credit cards and so no worries there! my debt is mostly medical bills n past credit cards or closed accounts I didn’t finish paying off. Hmmm not sure what to do, maybe I can get things caught up this summer between semesters at college. Thanks for all your help everyone!
Thank you all so much for the great responses! I am going to college, and right now I make about $850/month. I currently do not have any open credit cards and so no worries there! my debt is mostly medical bills n past credit cards or closed accounts I didn’t finish paying off. Hmmm not sure what to do, maybe I can get things caught up this summer between semesters at college. Thanks for all your help everyone!

Talisha Higa