Need Some DIY Advice on Settling Debts

First you need to take a deep breath and get together all your information including a copy of your credit report.

Who has your debt? Is it a junk debt buyer or the original creditor - if the debts are not with the original creditor and a junk debt buyer has it, you need to validate the debt and make sure they legally can collect. If they can, negotiate the balance you owed when it was charged off, they paid only pennies on the dollar of that amount and usually something is better than nothing. When you call them you need to be in charge, tell them you are avoiding bankruptcy and am only willing to pay only 50% of the amount charged off (use dollar figures), you have nothing to lose since you have not paid for years anyways. Also, check the statutes of limitations and see if the debts have expired, if they have, write to the credit bureau and ask them to remove it since it is past the statutes of limitations. The date of last activity on your credit report is when the statutes of limitations begins.

I have been doing debt settlement myself and most creditors are willing to work with you if you have a true hardship. It takes a lot of planning and saving to make sure you have the money when you negotiate your settlements. Don't agree to something you can't pay. Don't tell them where you work.

Read here and see stories of people that have settled their debts. Do a search on the creditors and collection agencies you are dealing with and see what other people have to say. Look at the Do It Yourself section of this site and read about debt settlement. Search on line about debt settlement and never feel you can't take care of this problem yourself, it might be baby steps but think it through and do it as you can.

Charge off is an accounting principle creditors use to show true losses for their company, it does not forgive the debt. If the original creditor charged it off and still has the debt, you can usually call and settle for about 40% of the chargeoff amount. Sounds to me like you may have been sold to a collection agency and they are adding up the interest. Don't fall for it, offer them only 40-50% of what the original creditor charged off, tell them that is it or nothing, you are overextended and don't have enough income to make monthly payments and you are getting a small tax refund? Whatever the case may be, they will want to know where the money is coming from and if you have to borrow it, sell something or wait for refund, let them know - it's important they know it's not from earnings you have now, they will feel if you can earn it you can pay it all.