Settling A Medical Bill & Credit

Written by BonnieFreemane on 30 October 2008. Posted in Financial Advice

Dear Gil,

I have an outstanding medical bill that a collection agency is calling me about. They have offered a settlement.

How will that be reflected on my credit report and would it adversely effect my credit? I don't want to accept it if will cause me more harm in the future. Please advise.

D.B.

Hi D.B.,

You are indeed being wise in making sure that this offer by the collection agency is working in your best interest.

Depending on the creditor, the amount of your bill will either be reflected as "Paid", "Settled", or "Settled for less than full balance" on your credit report. If you are able to negotiate this, try your best to have them state this as simply "Paid". In the future, it will be the most favorable for you in terms of how other creditors view your credit report.

The other thing I am sure you want to know is how this will affect not just your credit report but your credit score or FICO score, as it is technically referred to. This again depends on a number of factors. Most times when people are offered a settlement, it is only because the creditor or collection agency has deemed that the debt is almost uncollectable as it currently stands and they are looking to minimize their losses at this point. So chances are, the thing that has already hurt your score is delinquincies. If that is the case then settling on the debt can't really hurt you any further. Either way, you are going to need time to build your score back up. If what I am assuming is true, then accept the offer, and make sure to get everything in writing. Collection agencies are notorious for claiming one thing on the phone and doing another thing, altogether, when you have agreed to them verbally.

I wish you all the best in settling this medical debt.

Gil

Credit Score and Reposession

Written by BonnieFreemane on 17 January 2008. Posted in Financial Advice

Dear Gil,

My name is C.D. I would like to buy a condo next year, and recently had my credit report pulled by Lend America. They stated to me that the one thing holding me back from a high score is the repossession of my car two years ago. The debt was paid off and I did get the car back. Is it possible to have something like that removed off my credit score? I did call Toyota Financial and they told me it was not. They stated to me that it was a marker on my credit report and it will be there for the next seven years, even though it is paid off. Is this statement true?

Hi CD,

Let me first thank you for taking the initiative to fix this situation on your credit report before you purchase your condo. Many times, these issues come up as a surprise while the property has already been found and the purchase is already in motion.

Garnishment? No Thanks!

Written by BonnieFreemane on 21 June 2007. Posted in Financial Advice

Dear Gil,

I have been notified of garnishment from a credit card company. I don't have the finances to pay this company. Is there antything I can do to avoid garnishment?`

Signed,

"Doubting" Thomas

Dear Thomas,

I would contact the credit card company and see if they are willing to settle on the case for a fraction of the outstanding bill. Many times credit card companies are more than willing to settle for 50% of the original debt for a couple of reasons:

I Feel This Small...

Written by BonnieFreemane on 02 July 2007. Posted in Financial Advice

Dear Gil,

Hello. Well,...I am a rising senior in college. I was sitting at home tonight, reading an article online about a guy who started his own successful company at the age of 16. Now, I am thinking to myself, "...ok, this guy has seemingly financially secure future...so what's your plan!!!???"

The first thought that came to mind was stocks. But, I know absolutely nothing about them. I would like to know, where would I begin? What should I do first? Do you have any advice for me?

Signed,

Ms. B

Dear Ms. B.,

As cheesy as this may sound, the words of my father-in-law ring true, "Those who fail to plan, plan to fail". And while life is not completely summed up in those words, it does carry a lot of weight, especially in financial matters.

Calling Mr. Repo Man...

Written by BonnieFreemane on 07 June 2007. Posted in Financial Advice

Dear Gil

Hello. I just wanted to know if possible what can I do to get out of the car that I purchased. I can't handle the payment but I have been on time with the payments. I just want to know if its wise to call the REPO MAN and have him come pick up my car. I know it will look bad on my credit but I feel i have no other choice.

Signed,

TG

Hello Teshia,

Thank you for writing in for advice. DO NOT CALL THE REPO MAN!

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