Seven steps to resolve old bills and improve credit scores.

With the New Year often comes a desire to resolve old bills and improve credit scores. Here are seven easy steps for you to take to make that happen.

1. IDENTIFY DEBTS MOST LIKELY TO BE SUBJECT TO A LAW SUIT. Anything $7,000.00 and above is definitely ripe for suit. Anything over $4,000.00 that remains with the issuing bank and has not been turned over to a collection agency is also likely to result in a lawsuit.
2. Start depositing money in a separate account, in your mattress, or behind a loose block in your basement. Every chance you can, keep putting money aside and DO NOT touch it. This money will eventually be used to pay off and/or settle debts.
3. Once a debt has gone to the first collection agency, it is ripe for settlement. The most ripe are those now with their second collection agency.
4. Once you’ve accumulated a chunk of money, decide which debt you want to work on first, either because it is the most subject to suit or because it is the most ripe for settlement.
5. Call or write the creditor or collection agency and state the following:
   1. Give them a reason and/or sob story why you became delinquent on this bill;
   2. Explain that you are trying to catch up on your debts and would like to resolve this particular one; and
   3. Offer to pay about 30% percent as a one-time full satisfaction and accord.
6. Understand that you, on your own, should be able to settle most debts by paying between 50-65% of the total amount claimed, on average. Know also that an attorney skilled in these types of matters is more likely to be around $0.27 to $0.32 on the dollar. In most cases, depending on the amount of your total debts, you are far better off just hiring an attorney to negotiate for you.
7. Once you've resolved one debt, identify the next one to work on using the same criteria in step six. Continue to do this until all debts are resolved and you are 100% debt free. Please be sure to be careful when choosing which debts to work on first, because know that if you choose incorrectly and get sued or simply do not act fast enough, you will need to hire an attorney for the best possible result. We hope these seven simple steps have put you on the right track to a year where you can pay off debt, increase your credit score, and be in a better financial position.

If you should have any questions, or would like to set up a consultation to discuss your personal situation, please do not hesitate to contact our office.