Hello, I currently have $30k in unsecured c/c debt
Date: Thu, 02/24/2011 - 01:59
I just received a $15K bonus check from my work and would like to pay down/off my credit as much as possible or possibly a settlement. I do not make enough to afford both my c/c and mortgage payments so I need to make a serious dent in lowering/erasing my c/c debt with my bonus. My concern is that I want to do the least damage to my credit score as before this my FICO was at 740. What is the best way to utilize my bonus check? Since my credit score is already hit, I think possibly settling would be a good option. Although, I wonder if the banks would work with me if I have not been late on any payments yet? What should I do?
Settling the unsecured debts will have a negative affect on your
Settling the unsecured debts will have a negative affect on your credit score. However, you should contact your individual creditors and negotiate with them so that they do not report your accounts to the credit bureaus in a negative way. If the creditors agree to it, then it will be a good option to go for settlement.
I wouldn't do anything to jeopardize your refinancing. If you a
I wouldn't do anything to jeopardize your refinancing. If you are not behind on your credit cards, they will not settle. If you default, you will harm your credit score, and the bank will pull your credit report before the refinancing goes through. If there's changes, they may reconsider.
If you read the posts here from people who've settled, their credit reports reflected "settled for less than amount owed" which is a negative.
Are you refinancing because you are behind in your mortgage? Is the interest rate better? If not, why not catch up on your mortgage payments?
You can also put the money into an account for emergencies.
Are you doing a loan modification? Sounds like what I just did,
Are you doing a loan modification? Sounds like what I just did, with the 3 trial payments. If so, I don't think that falling behind on cc payments will hurt the loan modification. I stopped paying everything at once, and my modification just went through. Have you checked your credit score recently? Was it at 740 before you missed mortgage payments or after? So far, mine went down from 780 (before I stopped paying everything) to 506.
If it were me, I would do this: Check your credit score. Maybe it has already went down a good amount from missing mortgage payments. You can pay 15k towards the 30k, but then you will still have $15000 to pay later. If your score is already hurt bad, why not just stop paying the cards? Put the 15k away for 6 months, and settle your cards. Then you will be cc debt free, probably have some money left over, but will be left with a score of around 500.
Weigh out your options.