Posted on: 05th Jan, 2010 07:14 pm
I short sold my home. The second turned into an unsecured debt. I was hoping for a settlement but haven't got past their review. They are talking about charging off the account. I can't afford to make any payments and if I could (only minimum payments) I would never pay off the loan anyway. Should I let it go to a charge off status and then try to settle with collections? I know this will hurt my credit but I need to think long term. Any advice would help. Thanks.
Hi delilnatund,
If you let the account be charged off and then try and settle it with the collection agency, it will affect your credit scores. But in case the second lender does not enter into a settlement and sells the account to a collections agency, you can always negotiate with the agency to settle the debt. But in any way, you will have to pay off the account. Until it is paid off, the collections agency will come after you. You may also file bankruptcy Chapter 7 and have the debt discharged. But this will damage your credit to a great extent.
If you let the account be charged off and then try and settle it with the collection agency, it will affect your credit scores. But in case the second lender does not enter into a settlement and sells the account to a collections agency, you can always negotiate with the agency to settle the debt. But in any way, you will have to pay off the account. Until it is paid off, the collections agency will come after you. You may also file bankruptcy Chapter 7 and have the debt discharged. But this will damage your credit to a great extent.
Hi delilnatund!
Welcome to forums!
In my opinion it would be better to negotiate with your lender rather than letting the account go into collections. You've mentioned that you could make minimum payments. Inform the lender about it and request him to give you an affordable payment plan to pay off the dues.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
In my opinion it would be better to negotiate with your lender rather than letting the account go into collections. You've mentioned that you could make minimum payments. Inform the lender about it and request him to give you an affordable payment plan to pay off the dues.
Feel free to ask if you've further queries.
Sussane