trying to clean up credit report and have credit card collections with Home Depot and Capital One

Lost Job in 07.

Stopped paying all bills.

Shortsale on house.

Recently divorced.

Have been using LexLaw to fix credit report. But 2 big ones, Cap One and Home Depot will not budge. Says I owe almost 10k each, but I only had 7500 limit on each of them. I need to settle them to get a mortgage.

If I call to settle, do they settle on the full amount or what I owed when I went delinquent? Where does all those extra charges come from? $2000-3000 extra on each.

Thanks,

Derek

If I call to settle, do they settle on the full amount or what I owed when I went delinquent? Where does all those extra charges come from?

—Derek

Hi Derek,

The full balance due today will be what you are dealing with when discussing settlement. The extra 2k plus that your balances have increased by is due to penalties and interest (mostly interest) that has accrued while the debt remained unpaid since 2007. If the contract with the creditors allowed for these fees to accumulated (most do), that will be why the balances have inflated.

When you approach both creditors to negotiate you may learn that the debt is currently placed with a debt collector or that the account was sold to a debt buyer. You will likely be given contact information in order to reach who has the debt currently. This is normal and you can negotiate with current debt holder.

Do these accounts appear on your credit report in an additional debt collector entry? Are you prepared with a lump sum of money in order to fund any agreed to settlement? With debts this old you are often better positioned to get the best savings when you fund an offer in one payment. If you are not in a position to do that you may want to wait to contact until you are (one account at a time is okay too).

When is the last time you heard from anyone attempting to collect on either account?

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