I have a lot of outstanding debt that I have not paid on in 5-6 years. I fell on hard times and stopped making payments altogether and completely lost track of my debt. I’m guessing that I owe $30,000 between a truck, boat, and other creditors. I went back into the Army a few years ago and am currently on active duty in Iraq. I will be returning home soon and want to find the best way to start working on cleaning up this mess so that I can put it behind me and start fresh.
1) How do I find out exactly how much and who I owe? 2) What is the best approach to negotiate getting the amount owed reduced?
The best way to find out who you owe and how much is for you to get a copy of your consolidated credit report online. The link to the consolidated credit report is the same one I use for myself, and love.
A single bureau credit report is not going to give you a complete picture of your debt. Each credit bureau will report different debts and by looking at a consolidated report it will give you the best picture. Bear in mind that not all creditors, like the smaller ones, report.
If you can’t afford the truck and boat payments and they get repoed, those bills will be huge. While you are serving on active duty you have some protections from repossession and foreclosure under the Servicemembers Civil Relief Act (SCRA). You can read “I’ve Been Called Back to Active Duty in the Army. What Do I Do About My Car Payment and Bank Loans? – Larry” for more information.
But from what you’ve said, you were not current on these debts before you went active duty. Based on the current pay scale of military service members, and the probably mountain of debt you are going to walk back in to, a fresh start through bankruptcy is the fastest and most complete way to wrap up this past financial damage and close the door on it forever.
There is some consideration that you may not be sued for the debt in a short period of time based on the statues of limitations. But just because they can’t sue you, doesn’t me they can still hassle you and try to collect. These old debts should fall off your consumer credit report after seven years from being first reported.
You can get the credit report now and look at what the reality is but I would not suggest that you do anything towards resolving this till you get back home. It’s old and not going anywhere.