HI,Hoping you could advise me. I am wondering what

HI,Hoping you could advise me. I am wondering what looks worse on a credit report and how will it appear in the future if I settle a credit card or loan. Amex and Bank of America are two I'm struggling to pay and it will soon go to collection.If I wait and attempt to negotiate one lump sum amount or a 3 installment type plan with a collection agency how will this appear on my credit and how adversly will it affect me in the future.When the negotiated amount is paid off will it say settled plus include strikes for being 30,60,90 days late. Will it say charge off? What is the difference and what is worse? How long will this stay on my credit report? i'm thinking if my credit is already ruined with all these late strikes against me and I can't pay if I negotiate a settlement will it be as bad as if I declared bankruptcy for my future credit? What is the best option and how badly is it looked upon?

2 Answers

Nothing much to add to the above answer. Follow the instructions and you should get out of trouble without a hitch.

The collectors will keep reporting your unpaid balances to the credit bureau for however long it takes for you to pay off the accounts. After the accounts have been paid off, the report will reflect the status of those accounts as 'Paid in full' or 'Paid as settled' or something similar to that effect. These items will stay on your record for 7 years from the time the collectors cease repoting them actively. Amex and BoA will report to the credit bureaus as 'charged off' in case they give the accounts to collections. Depending on which chapter you file bankruptcy under, it will stay on your record for 7-10 years. If you fail to pay after negotiating a settlement, it is likely that the creditors will try to sue you. If the creditors win a judgment against you, they can put a levy on your bank account and garnish you wages (unless you are in Texas). Bankruptcy should be your last option.

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