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How to best handle old debt

By Terry Savage on January 06, 2022 | Credit/Debt

My daughter (31) had bad credit card dept from a number of years ago. She has never tried to pay anything as she was a mess and has finally gotten her feet under her and has a good job. What is the best was for her to start cleaning up her credit/dept? Things are all in collection agencies. She is willing to pay the collectors but isn’t sure what next steps to take. Thanks for your help!

Terry Says

If these have been handed over to collection agencies, they are probably written off by the original creditor. I’m not sure it makes sense to pay these debts since she has no other assets they can squeeze. After a while, they won’t even bother going after her in court to get a lien on her wages. But to get good personalized advice, she should call the national non-profit, Foundation for Credit Counseling at 800-388-2227. They will advise her if there are still creditors actively pursuing her in collection and what she should do.

To reestablish credit, she should go to www.CreditCards.com and search for a “secured card” — one that has a credit limit based on a savings deposit she makes in the bank. Then she should charge every month and pay off the balance IN FULL AND ON TIME. eventually that will restore her credit.



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