Which is better?

dstebbins · #1 (**permalink**) 02-16-2010, 03:03 AM

Last time I checked, I had a credit score of 499.

I owe tens of thousands in student loans, credit cards, etc, many of which are already in default, but I'm judgment proof. The student loans are not in default, since I'm currently enrolled and, therefore, don't have to pay any on them, so my credit actually has 14 current debts and three default ones.

However, I'm about to go to a mediation with a former employer to settle an employment discrimination case out of court. If successful, forget tens of thousands, I could have HUNDREDS of thousands of dollars in damages.

Provided that I can get the money, would it be better if I paid all my debts off, all of them, in one fell swoop, or should I spread out the payments over the course of about a year?

By "better," I mean, I'm trying to bring my credit back from the brink of destruction.

dstebbins · #2 (**permalink**) 02-17-2010, 09:47 PM

Oh come on! Twenty-two views and not one reply? What's the matter? Cat got your tongue?

sapphirecapital · #3 (**permalink**) 02-18-2010, 12:15 AM

a. judgement proof for 30 years????
b. pay or settle the debt when you can, remember any dime they let you off is taxable income
c. do not forget to pay your taxes
d. personally I think you should try and adjust your way of handling things

brian · #4 (**permalink**) 02-22-2010, 06:48 AM

Quote:

Originally Posted by dstebbins

Oh come on! Twenty-two views and not one reply? What's the matter? Cat got your tongue?

No patience?

Rose · #5 (**permalink**) 02-22-2010, 08:15 PM

If you get the damages awarded to you, settle it all. Why wait? It'll just hang over you.

Pay it all, draw a line under the episode and wow never to get in debt again.

C9Consulting · #6 (**permalink**) 05-21-2010, 03:11 PM

I agree with sapphire capital. Consult a knowledgeable accountant on how much your taxes would be. Put money aside for taxes. Then pay off debt with the rest of the money you have left over. Money that's left after that, start a retirement account and leave it alone. I've learned through situations with others that people have a tendency to blow money, they didn't technically earn.

goodyphilips · #7 (**permalink**) 08-31-2010, 08:39 AM

Yes i completely agree first deduct the taxes that you have to pay and from the rest clear all your debts at one go. even if you are left with some money then invest it wisely and never make the mistake of accumulating so much debt.

rice8702 · #8 (**permalink**) 09-07-2010, 05:15 PM

you should definitely pay your balances down below 30% as quickly as possible. Then I think it is up to you if you want to keep a balance or not. I know that have your balance below 30% of the available credit is good for your scores.

DavidBeairsto · #9 (**permalink**) 09-07-2010, 10:13 PM

If and when you get the settlement money visit your financial consultant...
1. the debt will always be the primary concern but a good plan will address paying the debt off quickly while increasing your credit score
2. diversification isn't only for investing so the advice to account for taxes, allowing some of that money to grow, or setting up an emergency fund are all important
3. setting up the budget with qualified support will give you options for how quickly to pay off the debt and how the plan can be adjusted when cash flow begins from somewhere else
If and when you don't get the settlement seek out qualified support even if you can't afford a financial consultant. The biggest mistake is in thinking nothing can be done when professionals spend long days turning nothing into something because they know how.

mikefinance · #10 (**permalink**) 09-25-2010, 12:40 PM

499 is bad..research on improving that. Pay off your balance on time and call them up to work out past errors.

mikefinance · #11 (**permalink**) 09-25-2010, 12:41 PM

and get a financial consultant cuz I think professional help is best in this situation.

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