Paying off debt?

[Hecopisk]

I have enough in savings to completely pay off all my debt in collections (a total of 5 accounts, 3 are the same company). Is it better to pay off all debt at once or to make payment arrangements with the the collection agencies? If I make payments (on time) would it turn the collection into a positive? Or no matter what, will I need to wait the full 7 years to get them removed?

[NCperson]

bring all your debts current as soon as possible if you have the cash to do so. 

it'll take up to 7 years to get the credits removed whether you paid them on time originally or not - so best to get back on track - the sooner the better as the credit score may begin to rise as each new month shows payments all made on time 

[Bonnevie]

I would suggest tackling these strategically and as soon as possible. I recently was in the exact same situation and now have 0 accounts in collections and a 740 credit score (only 15 months ago my credit score was around 580)—I would not recommend taking all your savings and paying these off (you always need some kind of emergency fund or savings for a rainy day) but I would take a small chunk and try to settle 1-2 accounts every month or so as you can. Even though it takes 7 years for these to drop off after full settlement, sometimes its worth it to wait because the longer it gets passed around to collection agencies the deeper “discount” settlement they may offer. Try to negotiate a full settlement offer for a lower amount rather than agreeing to a payment plan.

[lo213]

If you have a debt that you were sued in court and lost and agree to make monthly payments on it with as much as you can, can they still put a lien on your house and/or garnish your wages?

[lo213]

Yes I am aware of that. But I was asking if the judge states I owe them and I agree to make monthly payments and the judge agrees with my recommendation of making monthly payments, can they still put a lien on my house and/or garnish my wages?

[NCperson]

this is a community to ask tax questions, not legal questions; which is why @Anonymous_ recommended obtaining legal advice

[lo213]

I went to court. Since we could not agree on the settlement amount it’s most likely going to trial where I can Dispute some of the charges.
So are you saying that if it’s not brought up at court and approved by the judge that they want to put a lien on my house or garnish my wages then they can’t do that?

[Brandi0720]

Yes