Need advice on what to do?

Question

I need to clean up my score-here's my awful history;
1 bankruptcy (2001)
1 auto reposession (2000)
3 cc's that have been sent to collection agencies (after bankruptcy) totaling about $1600.00
And some smaller bills (about $500)
After bankruptcy--I was doing fine---my mom began having bad financial difficulties (she lost more than half her monthly retirement income)and I tried to help her, consequently my bills began to go unpaid, she is now back on her feet and now I don't know what to do with my situation. I don't have any other bills besides rent and insurance and daily expenses. I checked my FICO and it is at 550---where do I begin? Do I call the collection agencies or do I call the original card companies. Should I seek advice from the consumer credit counseling? There are so many things in the future that I know I will need credit (son's braces, car , etc)and I'm desperate to fix this!!

Answer 1

When doing credit repair - NEVER talk to anyone on the phone. Always send letters and send them certified return receipt.

Before doing credit repair, opt out and also update your personal information on your reports. Those are the only two things that you can/should do by phone in credit repair.
1-888-567-8688 [1-888-5-OPTOUT]

The repo should fall off 7 years from the date it was sold that resulted in the deficiency. You are probably getting close to that date. If you are within 6 months of that date for it to fall off your reports, you can try and dispute it as an obsolete account.

You are out of the collecting SOL for the repo since repo's fall under the UCC for SOL, which is 4 years from the sale of the vehicle.

As for the cc's you should look up the collecting statute of limitations (SOL) for your state before you contact anyone.

If you are still within SOL or close to being out of SOL and you want to pay, you should start with sending them a debt validation letter, then send a pay for delete letter.

If you are out of the collecting SOL, you are not legally bound to pay. It is totally up to you to decide if you want to pay or not.

As for building up your credit, many who have had bankruptcies newer than yours have had success in rebuilding.

I would suggest going to the site I've listed. Start reading in the newbie forum and then in both the credit forum and the bankruptcy forum. There is a great deal of info on how to deal with collectors/creditors, the bureaus and rebuilding credit.

Everything on that site is free to read and use.

Answer 2

There's nothing you can really do about the bankruptcy or reposession until it comes off your record (should be able 10 and 7 years from the date it happened, respectively)

However you can do something about the credit card debt and other bills at collection. If I were you, I'd talk to the collection agencies. Either tell them you want to set up a payment arriangment or pay it off in full (depending on how much money you have on hand) Get an agreement from them (in writing) to take the collection off your record when it's been paid off.

As for where to go from there- get another low limit card (if you don't still have cards) and maybe a secured loan from the bank or credit union you are a member of. On the card, only charge what you are going to pay off (not at the bill's due date- get a card with online access and no annual fee and pay the bill the day after you charge something to it) And don't get behind on the loan payments. That'll start you building credit like you should have when you began to have credit.

Keep making all payments on time and in full and give it time- you're score can recover. It'll just take a little longer than usual because of the bankrupcty and repo. Good luck.

ETA-

I also agree with the other poster about having your mother help you now. She should be grateful for what you did for her and she should be more than willing you help you now.

Answer 3

usually if CC's have already been sent to collections the card company wont deal with you anymore. I would call the collection company and explain my situation and start payments with them. The smaller bills i would call and again explain you situation and start paying them, dont be a stranger if you talk to them most times they wont send to collection cause they know you are trying, and after all, all they want is their money back and your continued business(thats how they make money) Consumer Credit Counseling goes on your credit report and affects it in much the same way as Bankruptcy so thats a bad idea. Its better to deal with the company (or collections) that has the account yourself. I dont know how much money you make or what your bills are but $2100 is not a lot of debt, if you talk to the companies and let them know you are insterested in paying them back, they will work with you, if they lose you as a customer they havnt gained anything. Fixing this is not an overnight thing, it didnt take overnight to get into this situation so its not going to be over overnight. I would begin with making a budget so you know what you can reasonably afford to give each company you owe, then get them on the phone and ask them for a payment plan, if the payment plan fits in your budget, GREAT!, if it doesnt explain your plan and start negoicating. IF they refuse to come down on payment, write them a letter(copied and notorized)explaining your plan and how you have to pay other as well as them and the amount you are willing to give (be reasonable) and then make sure you send them that amount EVERY month and keep good records. Do this for every person/company you owe. When you have paid one off, put that money toward another and another and so on, until you have paid them all. When that happens youll be out of debt. Now you have to rebuild your credit. I would start with a small bank loan $1000-$2000, 24 months. Put that money in savings and dont touch it. Make your payments on time every month and that will show a good history. If the CC card companys will let you, keep the account open, length of credit is just as important as payment history. If you can keep CC card accounts use them RESPONSIBLY, dont pay them off every month, but make sure you can if you get in a bind. Never be late with payments and never go over credit limit, the fees with those are way more than interest ever will be. Good news is the repo is fixing to fall off and by the time you get all this straight the bankruptcy should be close to falling off too. Hope this helps, if you have any questions you can IM me thunder31634......not an expert but been through it myself

Answer 4

Do not use credit counseling. It shows up the same as a collection account on your credit report. I'm in the loan business and I see this mistake happen all the time. Get yourself a prepaid credit card that reports to the credit bureaus. You will most likely pay some ridiculous fees, but just think of it as the expense of fixing your credit. If you can get your collections paid off, call the collection companies and pay them. Watch your credit reports and make sure they are updated. You can do this free at www.annualcreditreport.com. When you pay off a collection, your score will actually decline at first, so get these paid many months prior to requesting a loan. If you are looking for a mortgage, don't pay them off until you've had a loan officer research your situation. I hope this helps. Good luck, you can do it!

One more thing... if you get a prepaid or low limit credit card, do not carry a balance of more than 49% of your available credit. Going above 50% starts to reduce your score, but under 50% actually improves it.

Answer 5

Your repo is pre-bk not much you can do about that, and the bk will unfortunately linger on your credit report for at least 7-10 years. If your cc's are also appearing on your credit report as profit/loss writeoff's, there's a chance the collection agencies may settle these debts for as little as .50 cents on the dollar but you will need to inquire if a settlement is available and if so, they usually require a lump sum payment. Do not advertise to them that you have already filed a bk. Once you have the cc's straightened out you may contact the 3 credit reporting agencies, transunion, equifax and experian - you are allowed to write a consumer statement that will appear at the end of your credit report expaining whatever circumstances you would want a potential creditor to know about when applying. Starting over means obtaining another line of credit (with unfortunately a high rate) using it regularily and paying it like clockwork each month. Be patient and good luck.

Answer 6

I know this may be touchy but what about asking your mom to help you now. You helped her out. If she can't help you, how about moving in with her until you can get back on your feet financially. Since the CC companies have turned you over, you should probably call the collection agencies. I'm sorry for your situation but I hope you can get some help.

Answer 7

You obviously have no business accepting credit from anyone. You didn't learn anything from your bankruptcy if you still managed to get credit cards and blow that deal as well. I would start worrying about repairing a credit file until I learned how to manage one in the first place.

Answer 8

there's a book called get out of debt, stay out of debt or something like that that's helped me a TON. I suggest you get that book. . .

best of luck to you

Answer 9

WORK HARD AND SMART