About Kathleen Eads Expertise Having spent almost a decade with a Commercial Collection agency, Kathleen
can answer questions related to collections~calls, motivating debtors to pay,
skip-tracing. She now works for National Skip Trace Network (NSTN), providing
premier technological Directory Assistance to the collections (www.nstn.net)
industry via the internet.
Experience
Past/Present clients Travelers Insurance, Nationwide Insurance, CNA Insurance, USF & G, Liberty Mutual, ACS, Asst Acceptance, Pinnacle, Penncro, Superior Asset Mgmt, PRM, Collins Financial, CBE Group
Question I live in Massachusetts, am unemployed and owe $40,000 on 4 credit cards plus a personal loan. I haven't made any payments in 2 months. I own a condo worth $240,000 and owe $60,000 on the mortgage. I have some money in the bank and just got a large credit line against my condo.
Question: How do I best pay off the credit cards - can I get discounts for paying them off? Do I call and make an offer or wait for them to sue me and make an offer on the resulting judgment? My understanding is that people pay off judgments at a big discount. Should I have someone represent me?
Charlie
Answer Charlie,
Opinions may differ on the matter, but I think you are best served calling the card companies and requesting pay off NOW. If you wait until they go into judgement status, this will have adverse effects on your credit rating and will increase the statute of limitations the companies have with regard to collection (Judgements have lengthier statute of limitations guidelines). The cards may offer you some type of settlement now, and it will only show as a late payment on your credit.
Additionally, in some states, judgements can afford the creditor the ability to garnish assets and wages (ie: they get a judgement, determine you actually HAVE money in the bank, and attach your bank account to satisfy the judgement). I would advise taking care of this now, since you have the ability to do so.
