We Are Against Bankruptcy and Want to Dig Our Way Out of Debt. – Paula

“Dear Damon,

I married my husband in 2009. We have been digging out of debt since then and are just seeing the light, as he received backpay from social security. We vied his credit report, and mostly he has many many medical collections. Some back in 2004, 5, 6…all the way to this year. We are against bankruptcy and make too much money to do that anyway.

What’s the best way for us to approach cleaning up his credit? Should we contact all of them and ask for settlement? What if the account is closed but shows negative? If we contact them, will they re-open it and cause it to go worse?

Husband’s score is 563 and we need to go VA to buy a home.

We need major help! TY (Retired US Army Officers, MAJ and 1LT) TY and God Bless America, RIP Osama Bin Laden!! 🙂

Paula”

Hello Paula,

I need to have a better understanding of the situation and the specific goal you are trying to accomplish.

You are asking about cleaning up credit but you still have many outstanding medical debts you are wondering if you can settle.

Before I can answer the credit question I need to know what your financial ability is to pay off or settle your outstanding debts. While there are things you can do to start rebuilding your credit report, it will be difficult to purchase a home while you have a low credit score because of outstanding and unpaid debts.

You are going to need to determine the amount of unpaid debts and also whether or not it makes financial sense for you to use your available cash, if you have any available, to make a settlement offer on those accounts.

There is no magic bullet to repairing your credit. It is just a matter of putting as many favorable items on your report as you can and reducing as many of the unfavorable items as possible. Over time the report will improve. Of course the trick is to know what and how to add favorables and reduce the unfavorables. That of course will depend on what is specifically on your credit report.

First, you want to make sure that you have no outstanding collections and other debts showing as money owed either by paying them, settling them, or disputing them from the report of you do not believe they are accurate.

To purchase a home you will need to look at more than just fixing your credit score. You will need to take stock of your overall financial position to determine if the purchase of a home makes sense at this time given you have and continue to struggle with outstanding medical bills.

The first goal is to figure out how to resolve all of the outstanding debt. Then you can take stock of your credit report and start taking steps to raise the scores if possible.

Please post your answers in the comments below.

Damon is a talented independent debt coach that provides in-depth assistance and consultations for people struggling with debt. If you want a personal debt coach to help you through a difficult situation or want assistance to find secret discounts offered by debt settlement companies I think Damon Day is an excellent person to contact for advice and assistance. He can be reached directly at DamonDay.com

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