Paying off Debt in a Lump Sum?

you can do this but your credit file will report settled for less than full and that will be the correct posting. Your scores will take a hit for this. May I suggest you start with the smallest and pay them off and work your way up. Now think about it. You are already spending this money on these monthly bills aren't you? use the money saved monthly and add it to the ones you haven't paid off. That debt will go away a lot faster. then continue on up it is called a debt snowball. Just a side note. pay off the cards first as they are revolving accounts and save installments such as car notes for last as they have and end to them

Are any of these debts currently in collections? You may be able to haggle if they are. If they are not, you may have a harder time doing so.

I would talk to your financial advisor. I you do not have one, I would go to your local bank and talk to theirs. There may be ways to make this money work for you in more ways than one.

For whether or not the lump sum will effect your credit score, check out the FORUMS on www.myfico.com. This site looks like you need to pay something to access the forums but you DO NOT. This site has an exhuberant amount of information related to the where to's and why for's of credit building and Fico calculations. I visit it at least once a quarter when doing maintenance on my credit report.

It really boils down to, how much extra cash flow would you have every month if you pay off these debts in full. 100? 500? 1000? I know i could stick 500 a month into a savings account and forget i had it and recoup what i spent to pay off the debt. can you?

as mentioned, you can only offer a settlement if it is in collections, and it typically has to be in collections for a long time before they will do this. Letting it go to collections will affect your credit score and if they accept a settlement offer, that will also lower your credit score even more.

If your debt is not in collections and is current, making a large lumpsum payment will help boost your credit score a little more.

Either way, you are best to just make the lump sum payment and not try to go for a settlement unless you are really strapped for cash and have no other options to pay back the debt. Typically, settlement is veiwed as the step you take before bankruptcy.

Pay off the highest interest rate credit cards first. That way you will save some interest. Paying off the current credit cards will improve your score.

You won't be able to negotiate settlements for less unless you have some permanent change in status, like medical disability. Credit card companies have no incentive to forgive any part of the debt.

If you have derogatory items on your credit report, you can definitely negotiate lump sum settlements for smaller amounts. It won't help your score but it won't hurt it either. Just be sure to get any settlement agreement in writing and don't give the collector direct access to your bank account.

1.When a debt goes to default status the ENTIRE balance due is payable immediately. 2. The credit report will show the entire balance due. Monthly payment arrangements will not change the the fact that the entire balance is due daily. 3. Paying it off in a lump sum would be the wise move. The creditor remains on your credit report for 7 years AFTER the debt is paid.

If you pay off the entire amount due, it will not adversely affect your credit score. If you negotiate a smaller lump sum payment with the company, and they agree to wipe out a portion of your debt, that WILL lower your score, because it will reflect that you didn't fully meet your obligation to pay off the whole amount, even though the company agreed to it.

paying debt lump sum

If you pay off the full amount, it will not hurt your credit score.

Companies will not want to negotiate with you if they know you have money, they generally only negotiate after a couple of missed payments. But you can always try, good luck

If you are current on payments, the lenders will not want to "settle." They will be happy to accept extra money and the smaller balance will be reflected in lowered amounts of interest.