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BAAAAAAAAD HORRIBLE credit/debt, where do I start?

Okay, so here's the deal, I am almost 24, done the stupidest things, financially. Like wrote checks, ended up bouncing, three bank accounts going into the negative that where never paid, taken to court where I eventually did. Just done some really stupid things. I probably have around 10,000 (I'm thinking? Idk I went wild when I became 18-19, not caring) I could barely got a bank account a year ago, that I've managed now these last two years to keep afloat and it was one of those account where they didn't go through chexstystems or a credit check. Point is I've lived foolishly. NEVER had any type of credit card or loans though in "my name". I couldn't even apply right now for a "in store" credit card at at any Mall stores or anything right now. On top of that I probably have over 20,000 in medical bills from 2005. Where do I start? I know got mine together & need to start working at making payments etc. Who do I go through?

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Anonymous

Asked by Anonymous at 3:24 AM on May. 4, 2010 in Money & Work

Answers (14)
  • You need to find out how much you owe on all your bills. Start paying on them. Call them and see if you can make arrangement to pay.

    louise2

    Answer by louise2 at 5:56 AM on May. 4, 2010

  • The Dept of Justice has put together a database of credit counseling/debt consolidation orgs with the DOJ stamp of approval-
    http://www.usdoj.gov/ust/eo/bapcpa/ccde/

    rkoloms

    Answer by rkoloms at 6:07 AM on May. 4, 2010

  • go through?? thats a scam.

    Dave Ramsey.
    IraqiVetWife

    Answer by IraqiVetWife at 6:09 AM on May. 4, 2010

  • File for bankruptcy and start over.
    Happypancake

    Answer by Happypancake at 10:10 AM on May. 4, 2010

  • You can go through yourself. Print off one free credit report from www.annualcreditreport.com. You're entitled to a free credit report every year from each of 3 companies so you can get 3 each year if you stagger them. Find out who exactly you owe the money to, then contact them to set up payment arrangements. That's all a credit counseling/debt consolidation group would do, and they'd charge a fee to do it.

    Filing bankruptcy would NOT help your credit.
    michiganmom116

    Answer by michiganmom116 at 10:33 AM on May. 4, 2010

  • DH and I are going through this right now too. We have the military up our butts about getting his debts from when he was 18 settled. It sucks having to make up mistakes from almost 10 years ago, but we brought it on ourselves. DH had his credit report printed and spent time yesterday to call them and get some payments set up. I know it's hard because it adds up quickly paying them so I really hope you have some extra money to at least start a payment plan. Good luck and it'll all work out. I would not file bankruptcy. Bankruptcy will follow you for the rest of your life (it doesnt go away after "x" amount of years - my sister in law filed 20 years ago and is still suffering) whereas settling with those you owe money will disappear, even if it takes a little time.
    CassiRae3

    Answer by CassiRae3 at 10:40 AM on May. 4, 2010

  • We have a LOT of debt. We're talking $56k, from DH's mother. She's had loans, credit cards, utility bills... etc, in DH's name. We didn't learn this until summer of 2008. It'd been going on for 7 years by then.

    I went to freecreditreport.com, paid one month of the membership to get a copy of each of the 3 credit reports. They give you an address or phone number per debt to call. I started making a list, from smallest to largest debts, with the past credit cards listed very first because they had the lowest monthly payments. I invested $400 into John Commuta's debt into wealth system. I'm glad I did. Not necessarily suggesting you go out and but it, it's an easy idea to understand. Start with the smallest debt. Check to see about your budget, and what you can afford at the end of the month to put toward debt. I picked out about $500/mo to pay toward debt. So If I had a $160 debt, a $190 debt, and a $200 debt, I paid those
    matobe

    Answer by matobe at 11:28 AM on May. 4, 2010

  • Then, the next month, the next debts on your list may be $450 and $700. Pay the $450 off, and $50 toward the $700 one. The month after, put all $500 toward the balance on the $700, then after that, pay the rest off the next month and apply the remainder from your $500 toward whichever is next.

    Medical bills can come in last because most generally, they're looked at AFTER the rest of your debt. So, if you apply for a loan and have $100k in medical bills, they won't hold that against you, because you didn't choose to get sick. Anything with interest needs to go first. Get anything with interest off of there. Then work smallest to largest. You'll see how quickly it comes off.

    If you want me to poke your numbers in on my software, let me know, it's a neat little program. It will tell you the date you'll be debt free, and will tell you how much money you will save on the interest if you made the minimum payments.
    matobe

    Answer by matobe at 11:32 AM on May. 4, 2010

  • The worst thing you can do is go through a credit counseling because they'll round all your debt up, slap their own interest on it, and it'll end up costing you more. They'll call and make settlements because they can pay them right then, and make that extra money off you.

    So, for some of the debts, like utility bills, phone bills, etc... sometimes, if you have the money to pay them right then, call them and ask if they can make a settlement. It will show as a settlement on your credit, but it will at least be paid and current. Remember, if any one company writes off more than $600 on a settlement with you, they will send you a 1099 that you have to turn in for your taxes, and you'll probably be paying taxes on it. Which won't be near what you'd pay just paying the bill.

    If you have any other questions, let me know. We're 9 months into our 22-month elimination of debt!!!
    matobe

    Answer by matobe at 11:36 AM on May. 4, 2010

  • I'm 23 also... btw.
    matobe

    Answer by matobe at 11:38 AM on May. 4, 2010

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