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I have a reposession on my credit report,it was originally $13,000 but i have faithfully made payments for the past couple years and i now have it down to $4,000.
I have a store credit card that has a balance of $2,000 that is still in good standing and i have not been late with a payment in two years.I no longer want this credit card and would like to pay it off.
Here is my question.
I have about $3,000 saved up and i would like to pay one of these off,which one should i pay off?I was thinking of making an offer of $2,000 to the collection attorney for the repo.He is my brother in-laws brother ,so he may accept it.
Any advice is appreciated.
Thanks!
honestly, I personally would go for the repossession. Thats what i would do. at the same time though, if you paid the store credit card off, you'd have 1000 to put down on a payment plan for the possession. if you talk to them, they may be willing to work things out with you.
there are other, more experienced, financial people here on this site who could help you out. thats just my opinion & what I would do if I were you.
Pay the debt that is very important to you. And that is very helpful to you. But it's all up to you on what you will pay first.
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Look for those options which you may get rid off quickly and if those are removed then you can pay the later debts remaining.
Re: Which debt to pay off first??
You should follow the "debt snowball" approach for paying off the high-interest loan first above all.
Debt Collection
Go for the repossession first.
pay the debt it is more important than repossession i think, all things is in your hand which you prefer is just your choice........
I think repossession is the best option for you..
If the repossession is willing to settle for half of the remaining balance, ask if you are responsible for the difference of the forgiven debt.
What forgiven debt is when you settle on a balance, if the difference of the balance exceeds to be more then $600.00, someone has to pay taxes on the debt, since the creditor forgave the debt, the consumer has to pay taxes on the debt. If they settle for $2000.00 on a $4000.00 balance, you may receive a 1099 in the mail around tax time & have to file the difference of $2000.00 as earned income in your taxes.
You need to understand how your credit score is calculated so you can know which accounts will be better to pay off first.
FICO Score Breakdown
1) 35% - Payment History
2) 30% Amounts Owed
3) 15% Length of Credit History
4) 10% New Credit
5) 10% Types of Credit Used
If you are ok with paying taxes on the settlement for the repossession, then I would pay the repossession first & then put $1000.00 towards my credit card debt.
I am a certified financial counselor so I hope I was able to give you some insight & informative information.
Best of Luck
Depends on a Few Things
What you pay off first depends on what you think will benefit you the most in terms of helping your credit and also saving you more money.
I advice you to first pay the debt which has high interest rate.