It looks like your credit rating has already taken a beating. If you are already over 90 days late on this debt then you will not look at a significant drop with the proposed debt settlement. However, make sure to get this agreement in writing before sending a penny. Credit card companies will make oral promises that they have no intention of honoring... so make sure to have it in writing BEFORE payment is made. Once this is done the debt should be fully discharged so you should not have any future calls from this company.

It is possible that this could impact any other debts you currently owe. Many promissory notes and loan agreements contain provisions that permit the lender to raise your interest rates if you default on their loan or any other current obligation. This would probably have already happened due to your credit rating drop.

Your credit rating will recover. Generally this will only stay on your credit report for seven years after the agreement is entered. There are exceptions to this rule if they sue and get a judgment or if any other action is taken. This is yet another reason to have this agreement in writing.

This really boils down to a personal decision. You owe the money and probably want to pay it. However you can only pay what you can pay. I strongly recommend you consult with a local financial counselor before making this decision. It is not simply an economic decision... it is also a question of principle. You may be able to restructure this debt and repay it in full by negotiating an interest rate freeze. Whatever you decide, you need to come out on the other end with a good plan for the future.

If you are unable to pay this debt, I would not concern myself with borrowing money to buy a car. Any loan you would be able to obtain (in the next seven years) would be disadvantageous and not worth the effort. Personally I do not purchase cars with borrowed money. If you must default on this debt, you may have to purchase a car in cash... but that really isn't such a bad thing anyway.

I wish you the best and please reply to this message if you need anything further.

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