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Ozer1

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trying to buy a house, how to start handling old debt on credit report
Me and my wife are currently trying to buy a home. There are about 4 accounts of old (4-5 years ago) debt, 2 are with a credit card company (Discover and Chase), and a third has been sold off to a collection agency for collection. I don't have a lot of money saved, but was told I have to settle this debt before i can get the home loan. How do I go about doing this? I was hoping to settle for less than .30 on the dollar, but don't know if that's realistic. Any advice on how to start or handle this process would be greatly appreciated.

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Can they still sue you for this debt? Find out the Statute of Limitations to be sued for debt in your state and that will have a lot of bearing on the answer. Obviously if you cannot be sued for the debts then you will have more bargaining power. Offer them whatever you feel like, just be ready to pay that moment an be prepared to pay more if they counter offer. It is correct that most mortgage lenders will want these old debts taken care of. Understand that if these accounts havent updated for a while, when you pay them, they will update and could drop your scores. If they have been updating monthly then it really shouldn't matter and may even increase your scores if the debt is counting against your utilization. I guess try to bargain with them for the best deal they will give you and pay them and move on. Worst case, you could set back applying for the mortgage until your credit gets a little better, that would also give you more time to save up a bigger down payment, which would save you money in the long run.

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I live in California, the accounts in question are from 2010. i believe the statute of limitations in California is 3 years. As far as I know, if I contact them it restarts that statute of limitations does it not? The home loan guy said they have to be dealt with, and to provide a letter from each that they are paid off. I do have some money saved up and can afford to pay about 5 thousand, the total debt is about 12 thousand. The cheaper I negotiate the better of course, as any unused portion will go to the down payment of the new home. So basically should I contact a lawyer or service? or save the money and attempt this myself? Is it better to call, or do everything by letter/mail? Thank you for your time and responses. 

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