Please help me decide what to pay!

[an_aurora]

With our tax return, we want to put $2000 in savings and ~$2000 towards debts. Here is the list of bad stuff (this is all at various collection agencies):

DH:

$725 defaulted loan
$ 91 phone bill
$419 Dish Network (we don't owe this, but we have not been able to speak with any managers or clear it up, so we're giving up and paying it just to get it off DH's credit)

Me:

$112 library fines
Then I have ~$5000 in medical bills, broken down like this:
$139
$178
$284
$370
$438
$3425

We also have student loans (him $2000, me $8000) all in good standing. We're making payments towards his, mine are in deferment while I am in school. We also have a car payment in good standing.

So what should we pay? I was assuming we would pay off all of his, and then the $112 library bill of mine, and as many of the smaller medical bills as I can. Will paying these collection items help improve our credit? It's my understanding that those will be on our credit for a couple more years (these are all old debts, the most recent being the medical bills in 2004). Will paying those help, or will it just remain the same?

[phathui5]

$419 Dish Network (we don't owe this, but we have not been able to speak with any managers or clear it up, so we're giving up and paying it just to get it off DH's credit)

If you don't owe it, I wouldn't pay it just to get it off his credit. Unless you're currently trying to get a loan, the small improvement in his credit score isn't worth the $419.

[an_aurora]

Originally Posted by phathui5

If you don't owe it, I wouldn't pay it just to get it off his credit. Unless you're currently trying to get a loan, the small improvement in his credit score isn't worth the $419.

What is the alternative though? This is from 2006--it's going to be on there for a looooong time

[transformed]

What happened with Dish? DId you cancel early? (I have a history with those : )

If I were you, I'd pay it all off, and not put 2K in savings. Because you are going to have to pay it aall off eventually anyways, kwim?

[phathui5]

Originally Posted by an_aurora

What is the alternative though? This is from 2006--it's going to be on there for a looooong time

You can send a letter to each of the credit bureaus disputing the validity of the debt. Someone else can explain that better than me.

[an_aurora]

Originally Posted by transformed

What happened with Dish? DId you cancel early? (I have a history with those : )

If I were you, I'd pay it all off, and not put 2K in savings. Because you are going to have to pay it aall off eventually anyways, kwim?

Here is a thread I started about it--it's a really long story

[katheek77]

Originally Posted by an_aurora

With our tax return, we want to put $2000 in savings and ~$2000 towards debts. Here is the list of bad stuff (this is all at various collection agencies):

DH:

$725 defaulted loan
$ 91 phone bill
$419 Dish Network (we don't owe this, but we have not been able to speak with any managers or clear it up, so we're giving up and paying it just to get it off DH's credit)

Me:

$112 library fines
Then I have ~$5000 in medical bills, broken down like this:
$139
$178
$284
$370
$438
$3425

?

If I'm reading this correctly, you have enough to pay off everything in red for 1899. Myself, I'd be inclined to do that, call up DISH Network and DEMAND to speak to someone in charge. Be a bee-otch if necessary. Tell them to fax or send you copies of the documents they have that "prove" you owe them money...send them copies of anything related that YOU have. They can't just charge you for something they don't owe (I had to do this about a year ago with a double charge from a deployment 3 years prior when the credit card machines in Iraq were down...that had already been paid ONCE (when I first got the letter about it in Dec 06), and then they did an automatic deduction from DH's pay in Jan '07, then refunded one of those in Feb or March '07 and then said we didn't pay, etc. etc. - very complicated - it did take 7 MONTHS to clear up from when they first said it was going to collections - it never did go and they finally said, "Oh, yeah, you did pay that, and that second charge isn't correct" And it was 76 dollars total, IIRC).

I might be inclined to pay off the 438 as well, which still leave you with 1600+ to put in savings.

If they're *already* in collections, I wouldn't touch the 3400+ bill until I had enough to pay it off in full (just becuase of legalities on restarting the cycle). If it's NOT in collections, yet, I'd see about a payment plan.

ETA: Having read about Dish Network on the link, call them, ask them what day (or days) they "double credited" you. Get your bank records for that time (this might cost some money, but certainly not 400+ dollars worth ), and make copies and FAX them to Dish Network. If they CONTINUE to give you problems, get copies NOTARIZED at your bank and send them to them.

Sounds like a lot of the same problems we had with our double charge thing.

[transformed]

Originally Posted by an_aurora

Here is a thread I started about it--it's a really long story

google "dish sucks"

you arent alone. I'd say you have to pay it----or get a lawyer. :

dh has a GREAT credit bureau letter-i'll see if I can find it.

[lerlerler]

Maybe I'm dense... but why not use almost every penny to pay off debt? (not the DISH thing though)

I recognize that savings is important in case of a "rainy day" but if you pay off almost everything, you'd be almost free and clear and THEN if there is a rainy day, you have good credit and can borrow what you need.

Otherwise, you have money in savings earning 4% or something while your bills escalate with late fees and charges (I'm assuming) that add up to MUCH more than the paltry interst rate....

My vote? $4000 towards debt, fight the DISH thing...

[phathui5]

but why not use almost every penny to pay off debt?

Because if you have an emergency fund in place, when there's an emergency you can pay for it in cash and don't go back to racking up debt.

[Herausgeber]

Originally Posted by an_aurora

With our tax return, we want to put $2000 in savings and ~$2000 towards debts. Here is the list of bad stuff (this is all at various collection agencies):

DH:

$725 defaulted loan
$ 91 phone bill
$419 Dish Network (we don't owe this, but we have not been able to speak with any managers or clear it up, so we're giving up and paying it just to get it off DH's credit)

Me:

$112 library fines
Then I have ~$5000 in medical bills, broken down like this:
$139
$178
$284
$370
$438
$3425

We also have student loans (him $2000, me $8000) all in good standing. We're making payments towards his, mine are in deferment while I am in school. We also have a car payment in good standing.

So what should we pay? I was assuming we would pay off all of his, and then the $112 library bill of mine, and as many of the smaller medical bills as I can. Will paying these collection items help improve our credit? It's my understanding that those will be on our credit for a couple more years (these are all old debts, the most recent being the medical bills in 2004). Will paying those help, or will it just remain the same?

I'd save just $1K, ala Dave Ramsey.

Then pay the items in bold completely. Put the remainder on that big medical bill. Insist that each of the accounts that currently have negative info on your credit report remove that info as a condition of payment. Most will.

Keep fighting Dish Network.

Then adjust your withholdings so you don't overpay your taxes. Have the extra you'll be getting swept into your savings acct automatically, where you will also earn interest. Or bump up your retirement contributions by that amt if that's an option.

[cdmommie]

Defaulted first, Phone, then library. I wouldn't pay what you don't owe. You can fight it. It'll take time and effort, but it's worth the $$

[TiredX2]

As a PP mentioned, demand proof of the Dish debt OR that it is removed from the credit report.

What are the interest rates on the rest of the debts. Contact each of the medical debts and ask if they would settle for less if you could pay it immediately (unless you have already done that).

The defaulted loan--- who is that going to? Make sure they will remove the negative rating on your report.

[RolliePollie]

Woah! $112 in library fines!? I thought they had caps! When I racked up a huge fine, all I had to pay was like $40.

[Stace]

Originally Posted by phathui5

You can send a letter to each of the credit bureaus disputing the validity of the debt. Someone else can explain that better than me.

This is exactly what you need to do. Simply paying it to "get rid of it" isn't going to do you any favors, because paying ANY collection account is not going to automatically delete it from your credit report - they stay on just as long as any other record unless you make an agreement with the creditor that they will delete the tradeline upon full payment. Not to mention the fact that paying off collections doesn't really help your score much; the damage has already been done by having a collection there in the first place and the only thing that's going to fix it is time or a full deletion. Check out creditboards.com - they can help you with what letters you need to write and to whom. You should not feel the need to pay a debt that isn't yours.

[JackieR]

Check out http://www.creditinfocenter.com/rebu...lidation.shtml to work on your debts. It's a fabulous website with good info. And as a previous poster mentioned, calling and asking if they'll settle for less for an immediate payment of said lesser amount is a good idea - can't hurt to ask.

[wifeandmom]

Originally Posted by TiredX2

Contact each of the medical debts and ask if they would settle for less if you could pay it immediately (unless you have already done that).

This is a GREAT idea.

I'd call and offer to pay them immediately if they'll take 50% of what you owe as payment in full. If they agree, get this *IN WRITING* BEFORE you pay them a dime. I cannot stress this enough. Do NOT agree to pay anything without a deal IN WRITING that they'll accept 50% of the debt owed as payment in full with no further collection action taken.

You could *easily* cut the medical debt in half doing this. If they won't budge on one debt, say 'That's fine. I'll call the next medical debt on my list and see if THEY are interested in making a deal. Thanks so much!' Then move down your list.

Worst case scenerio...they all refuse to budge (highly unlikely). Then you can simply mail in the full payment and call it a day. At least you tried, ya know?

[RolliePollie]

Originally Posted by wifeandmom

This is a GREAT idea.

I'd call and offer to pay them immediately if they'll take 50% of what you owe as payment in full. If they agree, get this *IN WRITING* BEFORE you pay them a dime. I cannot stress this enough. Do NOT agree to pay anything without a deal IN WRITING that they'll accept 50% of the debt owed as payment in full with no further collection action taken.

You could *easily* cut the medical debt in half doing this. If they won't budge on one debt, say 'That's fine. I'll call the next medical debt on my list and see if THEY are interested in making a deal. Thanks so much!' Then move down your list.

Worst case scenerio...they all refuse to budge (highly unlikely). Then you can simply mail in the full payment and call it a day. At least you tried, ya know?

Sorry to hijack the thread, but would this work for a credit card debt?

[an_aurora]

Thank you all for the responses! I am taking notes

Originally Posted by RolliePollie

Woah! $112 in library fines!? I thought they had caps! When I racked up a huge fine, all I had to pay was like $40.

What happened was, I checked out these 5 books, and then got one notice saying they were late. We were moving so it took me awhile to find the books (DH packed). Two weeks after the "hey, the books are due" letter I get a statement from the collection agency.

[shayinme]

Originally Posted by RolliePollie

Woah! $112 in library fines!? I thought they had caps! When I racked up a huge fine, all I had to pay was like $40.

Depends on the library, I owe the Chicago Public Library system $400, checked out some books 18 years ago forgot to return them. 8 years ago when I was still in Chicago I tried to get a new card and they told me nope, gotta come up with the books or pay the fines. Need less to say I don't have a card there and thankfully I no longer live there and now treat my current card like gold.

As for the OP's situation, I agree with the posters who stated 1K should go towards an emergency fund and the pay off debts with the rest.

Shay