Debt Settlement - Where Do I Start

Don???t make the mistake of simply cutting a check to whatever collection agency has the debt for the charge-off and assume that your credit rating will be magically restored...Doing so will not remove it from your credit reports. It will simply be updated to a "Paid Charge-Off," which, while slightly better, is still a seriously derogatory item. Per the Fair Credit Reporting Act, a charge-off, whether paid or not, can remain on a consumer's credit reports for up to seven years. This does not mean that you will have bad credit for the entire 7 years though.

Paying off charged-off debt is beneficial if you are applying for a new mortgage as they will require that any defaulted debt be paid off. In terms of your straight FICO score, paying off the charge-off will probably not increase your score much, if at all.

If you're going to pay off old-charged-off debt anyway, then you might as well negotiate the lowest, rock bottom settlement you can possibly get, being that the negative charge-off notation is going to stay for 7 years on your credit report, regardless of wheter the charge-off is paid or unpaid. ...Offer 25%. Mail them a vaguely worded statement like:

I am willing to settle this matter for 25% of the original amount. This is in no way an admission of this debt, but rather an attempt to settle this matter. Your firm must send me a written agreement on your company's letterhead that you will accept this amount as "payment in full" and that is issue will be settled. Upon receipt of this agreement, I will mail you a money order for this amount.

Thanks for the response. Are these the steps I need to take? Contact all CA's to come up with a settlement and payments? The problem is I don't have the money to settle each account and keep up with my other bills.