...is it proper to stop payments on those accounts long enough to put together an emergency savings fund?
2006-09-17 18:43:37 · 9 answers · asked by WhyAskWhy 5 in Business & Finance ➔ Credit
"Proper" might not be the word I should have used there...how about "acceptable" or "reasonable"? And, I'm not saying don't pay on the old debts, but what if you waited to pay on them untill after you had a savings built up?
2006-09-17 18:44:43 · update #1
Not that it should matter, but I'm not asking for my own benefit. I'm just curious about it.
2006-09-17 18:47:52 · update #2
Sorry, Stuntdoub....I beg to differ. Most people today that file bankrupcy can file ...many different chapters. After 8 years you can be free and clear and have your credit back to good. There is one that you can file that re-organizes your debt and makes it available for you to pay back all debt. Most collection agencies today will hound you to death, until they sell off your debt to another agency and then they will start hounding you. Unless it is profitable for them to really go after a judgement then they will just keep trying to recover the debt. Collections agencies are just that....trying to collect a debt. Only when a judgement through a court is made will you ever have to come up with the money...or the interest will kill you. So if you can stand the phone calls....then yes, start that savings account. Talk to them when they call you and at a certain time they will usually settle with you at a 25 % decrease in the amount. Or more. Good luck...it's the way of the world today to be in debt. Look at our Government today...are they good role models for Americans...ummm don't think so. And I'm patriotic and love my country but...well you just have to come up with conclusions yourself....like I said. Good luck....
2006-09-17 18:54:17 · answer #1 · answered by chatterella 3 · 0⤊ 1⤋
No, it makes no sense to build up an emergency fund when you have serious debts. The interest/penalties you pay on your debts will far exceed the interest you earn on your savings fund. So you need to pay down your debts as much as you can, and when you free up your credit limit, use *that* as your emergency fund. Good luck!
2006-09-17 19:03:20 · answer #2 · answered by banana_fan 2 · 0⤊ 0⤋
make a payment, even if lower than the required minimum. keep them from taking legal action, even a $5 a month payment shows intent to pay. no payment and they can persue legal action including garnishment of pay. many ways to build the emergency fund but consider the emergecies legal action can cause.
2006-09-17 18:52:17 · answer #3 · answered by sllyjo 5 · 1⤊ 0⤋
Once you're late making a payment, it negatively affects your credit rating so the damage is already done. In severe circumstances such as a sudden long term illness or your employer shutting down, you can send a note to your credit reporting bureau and your creditors explaining your situation and in most cases they'll work with you.
2006-09-17 19:02:36 · answer #4 · answered by Anonymous · 0⤊ 1⤋
I got myself it hotwater once with this type of company.
I decide I would rather go threw a credit repair agency. Where they can either take all your bills condense them into one bill.
Sometimes they can get the APR dropped down to 1/2 of what you are working with now or some companies work with the agencies and drop the APR altogether. Some charge a fee to do the services it all depends on who you go to. This type of services cost me less then backrupty, cleared off my record faster and end up with better credit. Good luck.
2006-09-17 19:21:44 · answer #5 · answered by Anonymous · 0⤊ 1⤋
Yikes, sounds like you got yourself into trouble. You should contact a credit counciler to help you organize your finances and work out payment programs with your creditors. Otherwise, you will start to receive nasty calls from collection agencies.
the Credit Councilors will help you set a budget so that you can pay those bills. You will need to down size your spending and commit to your financial responciblities. It's tough but you can do it.
Good luck
2006-09-17 19:11:28 · answer #6 · answered by Sparky 1 · 0⤊ 1⤋
Collection agencies are very agressive. They don't care if it's your food or medication money, they want it and they want it now. Your credit score is already damaged by having things in collection; if you're worried about your credit score then you should pay now, in reasonable monthly installments. If you are paying now and stop, it'll damage your credit score further. Keep paying if you can.
2006-09-17 18:51:08 · answer #7 · answered by Doctor ~W. 5 · 1⤊ 0⤋
Stopping the payments just makes it worse.
You might want to consolidate, call your banks and explain the situation. They want your business, and you will be surprised how flexible and willing to negotiate they can be, see the big FAQ here:
http://credit-cards.ebookorama.com
2006-09-18 12:23:54 · answer #8 · answered by ken_voss12345 4 · 0⤊ 1⤋
Sounds like you need to declare bancruptcy. But then if you do that you won't ever get credit anywhere... ever.
EDIT: message to chatterella further down the page. You obviously don't live here then.
2006-09-17 18:46:54 · answer #9 · answered by stuntdouble_uk 3 · 0⤊ 1⤋