Focus on active cc's or default account
I currently have 13 accounts: 5 active, 5 with defaults on credit report, 3 not on my report. Who should I prioritize to pay back? I am paying over min payments on the active accounts and on payment plans with everything else.
I am thinking to just let the defaulted accounts run as they are, I am not paying much to them, but throwing any extra money I have at them say at the end of each year.
Currently my DFD is June 2024.
I would also prioritize the active accounts, and that's because I hope that these companies will continue to like you as a customer over the next years and decades. I think for the cards that you defaulted on, those companies see you more as a risk and will probably not want to do further business with you, at least for the next couple of years.
So I'd say it's best to keep the companies that you still have active accounts with on your side.
For the defaulted accounts, I'm wondering whether you've tried to offer them a reduced amount to forgive the full debt. Say, the amount of debt is $3500... you could see whether you can negotiate with them to pay for example $1500 in one go, and then they will forgive the rest of the debt. (For the company it can be beneficial to get $1500 from you and be done with it, compared to maybe you not paying anything to them or only very low amounts per year). If you try this, you should indeed have that $1500 to pay them with (or better yet, have $2000 so you have some negotiating room). And get the deal in writing before you pay!
Focusing on your five active accounts makes the most sense, however, it’s probably not a great idea to let your defaulted credit card bills sit. A debt collector could potentially sue you for what you owe, and if you lose the case, your wages could be garnished. While paying off the debt in full is great if you can afford it, making partial payments could set you back if your debts re-age. If you can’t afford to repay the debt in full, you’re better off settling the debt, especially if you can settle for less than what you owe. In any case, if you’re paying off debt collectors, make sure you get proof in writing to whatever’s agreed upon or confirming that the debt’s been repaid.