Thursday, October 4, 2007

Debt consolidation questions?

Debt consolidation questions?

There is only one bad thing in my credit report and that is one student loan that is in default. I took this student loan over 6 years ago. It has been hunting me every since I drop out of College. I have made efforts to pay it, but I have been unemployed for a year now.

The last payment I made was a year ago and I just received a letter saying that it is still in default status. I called the collection agency and told them my situation. I am unemployed, currently staying at home with my kid while I take classes online to get my degree. I told her we do not have the money to pay the balance. She wasn't very helpful.

I even told her that I want to make the effort to make payments, but I need a job and I can't find one at the moment. I told her I will start making payments as soon as I start working.Anyway, I was wondering if it's possible to make a debt consolidation with my loan and my husband's student loan. His student loan is also in default. Any good info will be appreciated.

Answer : If you can't afford to pay off the current student loans, how are you going to pay off a new consolidation loan? If you default on that one, your credit history will get worse!Who has listed the loan on your credit report? The collection agency or the original creditor? Exactly when did it go into default? How much do you owe?Here is my thinking.

First, blow off the collection agency all together if you can. It doesn't matter what you say to them, your excuse is never good enough. They will still want your money NOW and will only harrass you. Send them a letter to quit bothering you, then contact the original debtor.

Try to work out a deal with them to pay it back, but ONLY if they agree to remove the negative marks on your credit report and show the loan is paid in full. The only reason you are paying them is to get your credit history fixed, but many times the creditor will leave the bad mark on your record. Get the agreement in writing before you start paying them back.Go to the links I've supplied below for more information. Good luck, I've been this route.

http://www.comresinc.org/Forms/Credit/CL...
http://www.ftc.gov/bcp/conline/pubs/cred...
http://www.ftc.gov/bcp/conline/pubs/cred...
http://www.cardreport.com/laws/statute-o...

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