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I have poor credit due to a few collection issues and about 40,000 + how to fix it.
I have poor credit due to a few collection issues and about 40,000 + in student loans and I want to clean up my credit, I just don't know how to go about doing it. I recently got information on bankruptcy but it seemed that it wouldn't be a good idea to go that route.

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It's not worth it.

 You can't file BRtcy on those loans so to make the cost worth it you should have a lot of additional debt to deal with. If not you are going to have to do it yourself. 

Its not easy but you can dig yourself out of this. You're taking the right first steps by trying to educate yourself. Use sites like this one to your advantage. Learn how credit works and you can control it not the other way around. 

Google  Dave Ramsey.  I don't subscribe to everything he says. But his fundamental theories on getting yourself out of debt saved me. I still listen to his podcasts once in awhile just to keep myself motivated. 

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You're RIGHT!!!

Bankruptcy is a lousy way to try to "fix" debt issues AND-----student loans are generally not dischargable in bankruptcy and remain collectable until paid off, even if it means the government garnishes Social Security benefits.  Unlike other debts, there is NO drop-off the credit report for student loans until they are paid.  And, if they haven't been paid regularly, the "negatives" from those are going to have the biggest impact on your credit.

There have been some recommendations on this forum about people to contact in order to get a workable payment plan set up for student loans.  I just don't have that information right now.

The collection accounts may be able to be settled under a "Pay for Delete" arrangement which has to be done in writing.  That topic is covered in one of the Articles on this site and you'll find them on the left side of this page, along with many other helpful articles to help you learn how credit works and how to build and maintain a good credit score, which is the purpose of this site.  Please consider giving some time to reading them and learning these skills.

Also, make it a habit to check all three credit reports once a year so you can make sure only the correct information is being reported.

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Make sure you understand this before...

For student loans (blurb from a web site this is VERY accurate):


I have heard that the federal government can collect on federal student loans forever. But I took out my student loans from a nongovernment private student loan lender. I have been in default for several years. Can the lender sue me forever, or is does it have a time limit to do so?


You are correct that federal loans have no statute of limitations. But private student loans do – and that time period is governed by state law.

What Are Private Student Loans?

Federal loans are those made by or guaranteed by the federal government. They include Stafford loans, PLUS loans, Direct loans, and others. Private student loans, sometimes called private label loans, are provided by banks or other businesses, and are not guaranteed by the federal government.  (As of June 30, 2010, the federal government no longer guarantees student loans, it just makes them directly. But many people who took out loans prior to June 30, 2010 have federally guaranteed student loans – these do not fit within the definition of private student loans.)

What Is the Statute of Limitations?

The statute of limitations is a rule that sets a time limit within which a creditor may sue you for payment of a debt. The length of time that a creditor has to sue you on an unpaid debt varies from state to state. In some states, it's four years. In other states, it might be longer. To find out your state's statute of limitations for various types of debts, see Chart: Statutes of Limitations in All 50 States.

If you are trying to determine if a statute of limitation has run, you must know when the time period starts ticking. For most breach of contract actions, the limitation period starts running when the contract was first broken. That would be when you first stopped paying your student loan. (Learn more about the statute of limitations in collection actions.)

Reviving the Statute of Limitations

If you’ve defaulted on your student loan, and then you later make a payment, you can reset the clock on the statute of limitations. You might also risk reviving the time period in which the student loan creditor can sue you if you sign a new agreement to pay the debt, make a payment after the statute of limitations has run, or acknowledge your liability on the debt in some other way.  The specifics regarding when you revive a debt or reset the clock depends on state law.

What Happens if the Statute of Limitations Has Run?

If the statute of limitations has run on your private student loan debt, the creditor can ask you to voluntarily pay the debt. But it cannot sue you, threaten to sue you, or take other actions against you to force collection of the debt. 

For other debt:

I recommend you take a hard look at when the accounts are scheduled to come off the report. If you go to your free annual report - each account should have some wording that says "scheduled to report until, xx/2013. You would need to do this for all 3 CBs.

If the account(s) is scheduled to come off in 1 or 2 years (or what you think would be the magic #), then i would not contact them and set up a payment plan or even pay it off. Reason: This is considered an event that could start the reporting clock all over again. So instead of the account coming off in 1 or 2 years, you've just re-set it to 7 years (time bad stuff gets reported to CBs).

Also, there is a statute of limitations that a debt collector can sue you for the debt. Some states are 3, 6, 7 years. That doesn't mean they can't try, just that they legally cannot sue you. Check it our by state:

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