Debt Settlement - Full or Partial?

Most begin the year trying to revamp, rebuild and improve Self.

We are all too familiar when it comes to credit woes and shady lending practices. Here's a take on the settlement phase of credit card debt.

Within the timeframe of the statute of limitations in your state a debt collector can sue you for an inactive account. During this usual six or seven years you may want to pay attention to correspondence letters in the mail offering a lower settlement.

Your credit has already been affected by a relative 300 points by the time you reach the "settlement phase." Therefore, paying in full or partial decreases your credit score at about the same rate in the short term. The latest activity for the actual account will be updated on your credit report. An improved credit score will result as time passes.

If you are not responsible for incurring the specific credit card debt and it is someone you know versus blatant fraud pay it off. You may also negotiate a "pay for delete" agreement with a collector. This most works if you are not responsible for the account and be careful not to risk indicating responsibility in a conversation with the collector. Here's an example of a request letter Sample Pay for Delete Letter. Use certified mail to keep for your own records. Get the terms of agreement in writing from the collector before paying. You will reap the benefit of an improved credit report and credit score. You are allowed to sue them, granted you have legitimate proof.

Ensure that payment has been received and processed by following up with debt collectors. Request a free credit report as well to verify that it reflects the updated activity.

Keep in mind that future lenders may require that all debt be paid off before considering you for the best rates or at all when it comes to life-altering decisions like securing a mortgage. They will see the difference in payment made versus what was owed in-full once looking beyond your credit score. It is really a deciding factor if that number is large.

Continue your better you this year with financial stability!


Miss** Visionary 2011