outstanding bills - which one to be paid first

Hi Caron,

This is tricky but I'll tell you what I would do and HAVE done. First you look over your credit report. If you have anyone on it that you don't know and have never heard of, then you would need to send them a validation letter to find out exactly what the deal on them is. In the meantime, put those on hold while you wait for your information to come back in.

On the debts that you know are yours. You would need to check the SOL time. (statue of Limitations). Most states have the SOL set up for five years. I live in Tennessee--mine is six-so it depends on where you live. But if after checking, if you find that you have debts that are close to the SOL running out on them, put them on hold as well. ALSO if you have any debts that are close to the SOL of the bureaus 7 year reporting time--you would want to hold off as well--. In a case like this, you would like to just let it drop off of your report if its close to the 7 yr reporting time the bureau has. Because if you make a payment on a debt that is almost ready to drop off of your credit report, guess what, you've just started the clock all over again! and here we go for another 7 years. (two different SOL times--5/6 year time frame that a debt is still collectable with the creditor/Collection agency.--the other is the 7 years it remains on your report before dropping off. hope this makes sense, I know its confusing!)

So, okay--after you check to make sure the debt is yours, and you check the SOL...then I would take the smallest one and concentrate on it. Make a list of your debts, in order from the smallest to the largest. Start with the smallest. Pay it off, then move to the next one on your list, pay it off and so forth. I use the snowball effect. I pay one off and then move to the next one. I take the money that I 'was' paying on the one that I just paid off, put it ALONG with the regular amount that I've been sending and continue to do this, until it is paid off. Then I go on to the next one. This is just a suggestion but it has worked great for me. I'm slowly starting to get my life back! If you can't see this style working for you, then you could go with the 'wheel that squeaks the loudest'. In other words, the ones that are breathing down your back the hardest.

have any of these debts went into charge off mode? If so you will have to negioate with the collection agencies on what to send them every month. But first make sure its yours and check your SOL.

I'm sure I'm leaving something out so someone please jump in here if you have something to add! hope this has helped. Shirley

Caron,

To comment to your question one would like to review your debt status first of all. If one does not know the rate of interest, debt amount, how far they are from SOL and 7 year reporting time, it is hard to opine here. Still Shirley has tried her best to help you, I appreciate it Shirley.

IMO, you should avail the free counseling offered by this site Caron. Please enter your contact information in the sign up form of this site so that the counselor can call you up in a day or two. The counselor will review your debt scenario first and help you to design the best payment plan. Moreover, you will be offered easy and simple monthly installments to pay off your debts.

Do let us know if you need any more information.

Good post Shirley. If you don't mind, I am going to print a summarized version of that out for my own clients.