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A Credit Repair Company Said If We Settle Our Own Debt it Will be Taken Off Our Credit Report. – Anne

“Dear Steve,

My husband and I had a financial meltdown 3 years ago. had to short sale our house, I wasnt able to work for medical and child reasons. Had got in over our heads with a large mortgage then ended up with large credit card debt trying to save our home.had approx $80000 in credit card debt.

We were told by a bankruptcy attorney we earnt to much for a Chapt 13 which never made much sense. Any how we got ourselves into a debt settlement company to help settle our credit cards. They have settled with several small ones but The large Bof A- $40000 and one other one have already charged off before they said we had paid them enough money to settle them.

My question is should we stay another year in the programme – or try and get a refund for whats in holding – $13000 ? We were told by a Credit repair company we should get our money back and try to settle these charged off accounts ourselves, and that would natake them off our credit report. We would lo ve to buy a house and our fiances have improved where we could afford to no problem . bur we have to get our credit repaired.

Should we stay with this Debt settlement company for another year ? Or should we try to get our funds back and try to settle these charged off accounts ourselves ?

Also do you recommend Credit Repair companies?- the one we contacted was prime legal experts.com associated with prime financial.corp.com in Los Angeles. Does credit repair actually work at getting fico scores up ?

Thanks so much for your advice.

Anne”

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The Answer

Dear Anne,

It sounds like you talked to a bankruptcy attorney that didn’t quite know what they were talking about.

Settling the debt will not remove the negative history on those accounts. Whatever credit repair company told you that knows even less.

Nobody needs a credit repair company. The basics to rebuilding good credit are very easy. That being said, if you want to pay someone else to do the little work you need to do, that’s your choice.

See How to Easily Rebuild and Repair Your Credit for step-by-step instructions.

The bigger issue is that those old outstanding debts will need to be addressed before you go and try to buy a house.

What debt settlement company are you working with?

You should anticipate you will need about 50% of the current outstanding balance to settle those old debts. So it seems you don’t have enough available in savings yet. That being said, an experienced negotiator will know when creditors are offering special deals and the best time to settle. What advice has your debt settlement company given you on the remaining debts?

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

A Credit Repair Company Said If We Settle Our Own Debt it Will be Taken Off Our Credit Report.   Anne
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Kretek

    Hey Steve, I’ve had an old apartment debt go into collections before. Despite a call to Equifax (which temporarily removed the damage), it was inevitably placed on my credit, damaging it by a whopping 67 points. After an accidental default on my student loans (I paid it now), my credit dropped by a total of 140 points (including the previous drop). It went from 740 to 600 in 4 months. You can’t mess with marred credit reports. You just have to keep moving along and do the best you can.

    • http://GetOutOfDebt.org Steve Rhode

      Was the apartment default an accurate negative item?

      After 9 consecutive on time student loan payments the past notation may be removed.

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