Repayment of old credit card debt is a morally sound move.
Ethically, it makes a lot of sense.
Financially, it may place a burden but that is not a big deal.
Practically speaking, it can be a decision that can backfire into your face and leave you with a bigger problem at hand.
The minimum that each and every individual expects after repayment of old credit card debt is an improvement in the credit score.
However, if the debt has been passed on to a debt collection agent and if it has gone into default with the agent as well, you probably will suffer from a reduction in your score.
Secondly, if you repay the debt without having the entire amount in hand, chances are high that your creditor will immediately take legal action.
Let's look at it from the creditor's point of view.
You have $5000 receivable from an individual.
You try your level best but he or she simply refuses to repay.
Finally, you decide to write the entire debt amount off as a loss.
One fine day, the individual comes up and pays a $500.
Your first instinct is to secure the balance $4500 as well.
While you did not take legal action in the past and allowed the limitation period to expire, you will not make the same mistake again, will you? You immediately take the legal action and use the repayment of $500 as proof that the borrower still under the obligation to repay the debt.
Coming back to the borrower's perspective, you will end up with a legal notice where you expected gratitude from the credit card issuer.
The best way to focus on this problem is to completely ignore the morality aspect.
Instead, just focus on the practicalities involved.
If you want to repay your old credit card debt, be prepared for the negative impact on your score and the legal action by the credit card issuer.
If you have the entire amount, then and only then should you proceed with repayment.
Do not make the mistake of repaying the debt in full.
Don't you think you can wangle a 50% to 60% discount on the overall amount owed? The credit card issuer would not mind because the entire amount has been written off.
Recover of 40% is actually a profit for the company.
In any case, your credit score is going to suffer.
Why not get a settlement and enjoy more benefits instead?
Ethically, it makes a lot of sense.
Financially, it may place a burden but that is not a big deal.
Practically speaking, it can be a decision that can backfire into your face and leave you with a bigger problem at hand.
The minimum that each and every individual expects after repayment of old credit card debt is an improvement in the credit score.
However, if the debt has been passed on to a debt collection agent and if it has gone into default with the agent as well, you probably will suffer from a reduction in your score.
Secondly, if you repay the debt without having the entire amount in hand, chances are high that your creditor will immediately take legal action.
Let's look at it from the creditor's point of view.
You have $5000 receivable from an individual.
You try your level best but he or she simply refuses to repay.
Finally, you decide to write the entire debt amount off as a loss.
One fine day, the individual comes up and pays a $500.
Your first instinct is to secure the balance $4500 as well.
While you did not take legal action in the past and allowed the limitation period to expire, you will not make the same mistake again, will you? You immediately take the legal action and use the repayment of $500 as proof that the borrower still under the obligation to repay the debt.
Coming back to the borrower's perspective, you will end up with a legal notice where you expected gratitude from the credit card issuer.
The best way to focus on this problem is to completely ignore the morality aspect.
Instead, just focus on the practicalities involved.
If you want to repay your old credit card debt, be prepared for the negative impact on your score and the legal action by the credit card issuer.
If you have the entire amount, then and only then should you proceed with repayment.
Do not make the mistake of repaying the debt in full.
Don't you think you can wangle a 50% to 60% discount on the overall amount owed? The credit card issuer would not mind because the entire amount has been written off.
Recover of 40% is actually a profit for the company.
In any case, your credit score is going to suffer.
Why not get a settlement and enjoy more benefits instead?