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Im thinking of doing debt settlement. I have about 16K worth of credit card debt, my question is, does anyone have experience with this? Will I be able to get credit in about 4 years or so when I’m done with the program? (Currently renting, looking ot buy a house in about 4-5 years) Anyone with experience please share. Thanks!

3 Thoughts on Debt Settlement Question?
  1. Reply
    Rob B, of MD
    October 28, 2011 at 3:40 am

    This will certainly be a black mark on your credit, but so is nonpayment of debt. So long as you are are perfect after the settlement, you should have no problems.

    Good luck!

  2. Reply
    Steve V
    October 28, 2011 at 4:06 am

    It will affect your credit rating while you are untertaking the programme.

    It will also stay on your credit file for a period of 6 years. Weather or not you will obtain credit after the 4 year period will depend on the lender…some will see the programme as a good thing and that you took steps to put things right [as long as you always pay] but then other [and most] lenders will look at you as a risk. I say 6 years as there will be no record of it on your file after that period and you can start fresh.,

    best of luck

  3. Reply
    October 28, 2011 at 4:45 am

    in order to settle you debt you’ll need to have the cash first. if you’re 6 months or 18+ months behind, at this point it doesn’t matter what your scrore is, settle if you have the cash. you may get a 1099 at the end of the year. depending on your tax situtation, it may be good for you

    you’ll definately be able to get credit. you’re first credit card may be a small $ 200 limit. but hopefully you’ve already learned your lession & use it responsiblity. over time your score will increase. lenders will see that you have $ 0 credit card debt, your debt-to-income ratio is excellent, & you quailfy for a mortgage.

    i paid/settled all my credit card debt ($ 80K to $ 50K), i increased my score from 525 to 677 in 15 months. refinance my condo from 8.75% to 6.75%. when the bank looked at my credit report, they were more concerned on how much my credit card debt was–when they saw $ 0, they wanted my business right away.

    when your talking about a program, you’re not settling, you’re in a payment program usually set up with a credit counselor. with my financial situation then, i couldn’t afford the payments & most creditors will usually accept it for 1 year; at which point the counselor may need to resubmit the application to them again.

    that was my experience. good luck.

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