Credit Questions??

Mobuis · 12-02-2008, 02:18 PM

I know this isn't bike related but maybe some people can relate and maybe offer some sage advice or some alternative to this situation. But I was wondering if any of you have had any problems with recovering from bad credit? Me and family right now are tight on cash these days ( who isn't) but our situation right now allows us to make the the basics and hopefully keep a roof over our head. My biggest concern is that we have medical and credit card bills that are outstanding and some have even went to collections. Now I know that they have changed some of the debt collection laws, but I am not going to do like most people who get into my situation and file for bankruptcy because I know that can stay with you for awhile. I guess what I am asking, is it better to ignore the bank and pay the bill when you can or is better to keep in touch with them and send what you can when you can. My ultimate goal is get rid of everything and become debt free (somewhat) and hopefully have a good credit score to refinance our house, but how long does it take before you can see an improvement on your credit score? How long is too long to try and pay a debt off? and what other options other than debt consolidation is there?

rockertom · 12-02-2008, 02:23 PM

Call the loan agencies and get the interest dropped. Make them aware of your situation. I can pay X amount or nothing at all. They will work with you if you attempt to work with them. Otherwise it's 7 years of bad reporting.

Mobuis · 12-02-2008, 02:29 PM

The car loans aren't what I am worried about its the credit cards, but I can't really pay them alot and most them want most of the debt paid off before they are willing to help.

rockertom · 12-02-2008, 03:04 PM

Quote:

Originally Posted by Mobuis

The car loans aren't what I am worried about its the credit cards, but I can't really pay them alot and most them want most of the debt paid off before they are willing to help.

You have to be forceful with them. Give them the 3 options you have.
1 card consolidation agency. Only thing that will do is reduce the interest rate and they get a cut. Do it yourself. If someone won't work with you ask for a supervisor. Also get the agreement sent to you in writing.
2 Don't pay another dime. Goes into collection. Same as above.
3 bankrupsy. I personally don't like that option. But hey, if you have to threaten with it. It works.

Gotta be persistant with them.

Mobuis · 12-02-2008, 03:09 PM

Sounds like along the lines of what I have been thinking.
Thanks!

cory1848 · 12-02-2008, 03:18 PM

I know quite a bit about this as I went through a lot of it. Visit CreditBoards.com - Credit Help, Credit Repair Tips, News, Forums and read...

My advice - do not let them go past 30 days late. IF they already went into collections, they are already effecting your reports and if they arent reporting, they will soon. Do not let them charge off either. Work with the companies and ask about hardship programs, most will do it as the alternative is them not getting paid.

For credit cards, you MUST make the minimum payments or they will report you as late. One late can drop your score more than 50 points and its hard to get that removed, though not impossible.

For Collection agencies - Do NOT talk to them at all, do not promise to pay, dont even pick up the phone if they call. Do everything in writing. If you get a CA (collection agency) notice, the little bit they put on there that says... "You must dispute this debt within 30 days or we will assume this debt to be valid" You need to respond to that within that 30 days stating you dispute it or you lose legal options....

recovering from bad credit sucks. One time I had over 17 collections on my reports...(Its how I got through college), I have since removed 14 with "letters" and others have dropped off due to age... I have threaten legal action with some and they folded, and I have 2 left that wont budge.

What ever you can do to avoid getting lates on your reports do it... If it means selling a bike, need to consider that...

Medical bills - If they are already in collections they can be easy to delete... Florida has some good credit protection laws when it comes to medical... Ask for proof of the debt....if the CA supplies it and the amount is listed...They just violated the law and that can mean money in your pocket to the tune of $1000 per violation. I used that with 3 collection on my wifes report....they all folded and were deleted.

There is a wealth of knowledge on creditboards.com.... I would highly recommend you reading up on that a lot.

And bankruptcy isnt an option anymore as there is no more a true Chapter 7. You have to pay back your debts and you still get hit with a bankruptcy for 10 years. It only prevents you from getting sued.

Mobuis · 12-02-2008, 03:24 PM

I am already past the 30 days on alot of them, if I end paying the original holder of the debt will that help too? As for the credit rating I am really not worried about the score as much as I am wanting to pay the debt, the way I look at it is if I pay the debt first the credit score will fix itself. I just need an option as to how to get the banks to work with me when I can't even offer them any money. Right me and my wife are looking at another year before we can even make a dent in our debt.

cory1848 · 12-02-2008, 03:37 PM

Quote:

Originally Posted by Mobuis

I am already past the 30 days on alot of them, if I end paying the original holder of the debt will that help too? As for the credit rating I am really not worried about the score as much as I am wanting to pay the debt, the way I look at it is if I pay the debt first the credit score will fix itself. I just need an option as to how to get the banks to work with me when I can't even offer them any money. Right me and my wife are looking at another year before we can even make a dent in our debt.

Are any charged off yet? Charge off happens at 180 days from date of delinquency. You can still avoid that. Sometime you can pay the original creditor and that will remove the collection, sometimes the OC will refuse and make you deal with the CA. Usually depends if its an inhouse CA or outside CA. Inhouse CA are easier to deal with. IF they were sold to a CA, you can offer them them a deal like at a third of the balance to settle in full. Selling of debt cant happen until its charged off so if it hasnt reached that point yet then you options a few.

You can offer to close the account and make payments on the remaining debt at a reduced rate or use a credit counseling agency, though most are scams... Try for a consolidation loan, citifinancial offers personal loans that are easy to get but there rate is high. Got me out of a jam though.

Can I ask how much CC debt you have? I took out a 10k loan that wiped out 7k of debt I had...saved me $140 a month and now I am paying $250 a month for 5 years...sucks but it worked for my situation.

Home equity? That would be your best bet if the current housing market hasnt cleaned you out of equity. IF you are planning on Refi'ing, you must have equity...but if you already have lates...that might be tough.

Credit score wont fix itself...well after 7 years it will... Even if you pay the debt, the lates are still reported and if its a charge off, it doesnt age like a regular 30 day late will...

Mobuis · 12-02-2008, 03:46 PM

Check you PM Cory!

396d1ss · 12-02-2008, 04:45 PM

Cory that sounds like solid advice...im also a member on CB btw

cory1848 · 12-02-2008, 04:53 PM

Quote:

Originally Posted by 396d1ss

Cory that sounds like solid advice...im also a member on CB btw

They are the real experts over there...I owe a lot to them...

shark · 12-02-2008, 09:51 PM

HEY Mobuis.....do I see some toyz for sell?

1000ccrider · 12-02-2008, 09:58 PM

Bankruptcy is probably your best bet, I filed back in 2000 and you will not believe how many credit offers get sent to you soon after!

cory1848 · 12-02-2008, 10:40 PM

Quote:

Originally Posted by 1000ccrider

Bankruptcy is probably your best bet, I filed back in 2000 and you will not believe how many credit offers get sent to you soon after!

Back in 2000 you still had the Chapter 7 option. Since that is not longer an option, it may not be a good idea cause he would still have to pay everything back.

Mobuis · 12-03-2008, 08:21 AM

I really don't want to do the whole Bankruptcy thing, because I know that stays with you for awhile, plus with the way they have changed the laws there isn't really much of option there, but I will take most of the advice into consideration and hopefully figure out a plan. And btw thanks to all you guys.