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Should I Settle My Repo Vehicle Debt? – Jackie

“Dear Steve,

In November of 2009, I had a vehicle repo-ed. After auction, I owe $15,000. Other than that my credit is ok, I have 1 CC that has recently gone down to about $3500 balance which will be paid off in about 2 more months. I have 1 financed vehicle that is in good standing. I also have student loans- I am currently in my first year of Optometry School- graduating may 2015. With that in mind, I plan to open a private practice fairly soon after graduation. I am worried that the repo will prevent me from being able to get financed to open my practice. I have been thinking about trying to settle the repo with my income tax return but I have heard that it is better to leave it alone since it has already been two years. If not, it will show activity on the account and make the seven years start over.

Is it better to settle the debt or leave it alone? If I settle, will it restart the 7 years? If I settle, will it help my credit at all?


Dear Jackie,

A negative credit item is reported for no more than 7.5 years from the time it was first reported. Making a payment now will not start the clock again.

If you successfully settle this debt you need to understand that the current negative information on your credit report may remain, you may owe income taxes on the forgiven debt if you are solvent after settling, and you MUST get any settlement offer in writing before you pay them anything.

If you would like to try to tackle this yourself then I would suggest maybe getting the DIY debt settlement materials from Consumer Recovery Network to help arm you with knowledge about what to do. That will also get you a coach, I believe, to help talk you through the process.

Once you take care of this matter the bigger issue is that to build good credit you need to use credit, specifically unsecured credit. You may want to read this guide for more information.

See also  I Want to Settle My Own Debt But I'm Feeling Panic. - Vivian

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


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

About the author

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.

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