topic Re: Need Advice in Rebuilding Your Credit

Need Advice

mashdun — Wed, 10 Oct 2012 04:46:39 GMT

Hi everyone. I've finally decided to do something about my credit that I have been avoiding since my divorce 5 years ago. In my divorce, my wife was awarded a vehicle that I had financed through Capital One. We had filed for Chapter 7 Bankruptcy a couple years before due to having almost $100K in medical bills, so she could not get the vehicle financed in her name after our divorce. Instead, I let her just make the payments through my loan account... or at least I thought. She quit making payments 2 months after the divorce and 6 months later Capital One (their repo people) came to me wanting their car back... which I had to track her down to get. I tried to arrange to have the payments caught up, but they refused. Since then... they have put a judgement on me ($1900 in July 2009), which I have never paid... been trying to get my ex to pay since I haven't had the money to pay.

It now shows on my credit report that the $2600 balance of the repo on the Capital One Auto Finance account has been closed as a Charge-Off. I received a letter in the mail yesterday from Capital One saying that I can make a one time payment of $393.48 and they will list this account as "Settled in Full" by all the major credit agencies. The remaining amount will be treated as "forgiven debt."

I called Capital One and explained that this was something that happened through a divorce and I'd be willing to pay off the entire balance if they would delete it completely off my credit report. They said they would not remove it from my credit report. So... Should I pay this $393.48 even though it's official charged-off as of Aug 2012? Will paying a portion of the total (paying the settlement) help my credit?

Once this vehicle was repo'd, I went into a bit of depression and didn't pay anything for awhile. My student loans went into default, my credit cards went into collections and I didn't pay medical bills. I totally take the blame for these and am now trying to fix my mistakes. I went through a Rehabilitation program and got my student loans out of default. Although I am upset because the company that I went through said once I completed the rehabilitation program, the default loans would be removed... I have since found out they are not removed.

What I have left now to fix is...

Currently in collections:

$291 - Medical bill

$316 - Medical bill

$1503 - Credit Card

$492 - Medical bill

$685 - Medical bill

I have several "closed" accounts that report negative

$117 - Medical bill, unpaid

$230 - Medical bill, unpaid

$0 - Credit Card, Charge-off/sold (July 2011) is the $1503 in current collections

$2623 - Capital One Auto, Charge-off (Aug 2012) I have settled this with Capital One directly since the original post

$393 - Credit Card, Charge-off (Nov 2010)

$256 - Credit Card, Account Sold or charged-off

I have a chapter 7 bankruptcy that was discharged in April 2005 and the judgement from Capital One in July of 2009.

Previously before all this mess, my credit was perfect. I currently only have one credit card with a $450 limit and $0 balance. I also have 13 student loans on my CR, all in deferement because I'm finishing my degree. And that is all the open accounts with available credit or balances.

My credit FICO scores are:

Experian : 572

Equifax : 582

Transunion : 580

I see here where a lot of people improve their score 50 or more points in a matter of weeks. How is this possible? What suggestions do you have for me?

I have about $3000 saved and was wanting to buy a car, but maybe I should pay off some of these (PFD) and repair my credit and try to get another car loan. My credit report does show 4 or 5 car loans that were paid and never late. Not sure if this will help.

Suggestions on where to start?

Thanks,

Matt

Re: Need Advice

mashdun — Mon, 08 Oct 2012 20:53:40 GMT

Is it better to start on accounts "Currently" in collections or accounts that are "Closed" that report negatively?

And I'm not sure about these that say medical bills. Is there a way I can force these collection agency to show proof that these are my bills? What can be done to get these off other than paying them?

I need to get another car... I'm going to be driving about 100 miles back and forth to school in the Spring. My truck gets about 15 mpg and the amount I could save in gas could easily pay for the payment on something. I guess my question is... should I use the $3000 I have saved on a down payment or try to remove these negatives from my credit report and finance the entire vehicle?

I appreciate any advice. Thanks!

Matt

Re: Need Advice

jamie123 — Tue, 09 Oct 2012 02:46:57 GMT

Welcome to the forums!

You posted your question in the wrong forum. That is why you haven't received a response in a long time. You should be posting these types of questions in the REBUILDING CREDIT FORUM.

Yes, you can rebuild your scores much higher. It really isn't that difficult to do, it basically comes down to writing letters and waiting for lenders to respond to those letters.

You need to go to the rebuilding forum and read and learn how to write PFD (Pay For Delete) and GW (Good Will) letters. You also need to read and understand the DV (Dispute and Verify) process works. You need to have ALL the negative information removed from your report. Don't expect miracles overnight but if you spend an hour or two writing letters each week in a couple of months your scores will improve.

A few VERY important suggestions for right now:

DO NOT PAY ANY OTHER COLLECTIONS OFF UNTIL YOU READ ABOUT AND UNDERSTAND HOW THE PFD PROCESS WORKS!

Read, read, read and read some more. There is some great information on these boards if you just spend some time reading and learning about the credit rebuilding process. And of course there are always people here to help if you have any questions.

You want to start working on the newest baddies first and work back to the oldest. Negative information on your report loses some of its impact as it ages. That's why you want to attack the newest baddies first.

Treat the 1 existing credit card that you currently posses like GOLD! You would have a very difficult time being approved for a new credit card with the scores you currently have. Use this card gently each month and make sure you pay it off in full every month. Do not carry a balance month to month.

You can do this! It really is easy once you start. The first step is the hardest!

Good luck!

Re: Need Advice

igids1 — Tue, 09 Oct 2012 15:51:58 GMT

Well, I think its important to realize a few different things, and prioritize. Based on you having only 3,000 in reserves, the amount of debt you have listed, and (unknown) amount of student loans that will have to be paid back in the near future, I think you should be holding off on purchasing or financing a new car. If you have something that is running, I would say keep it. If not, something second hand that you can pay in cash.

Right now, in my opinion the most dangerous thing you have is the judgment. Now that they have it, it can stay for 10+ years depending on your state, and it can usually be renewed. Also, it is far easier for them to get a court order to have your wages garnished. If the letter was actually from capital one and they will squash this for the 393, I say go for it. Realize you will be taxed on the amount that is "forgiven" though, and take that into account. Paying it off will not help very much for your scores, but it will keep them from coming back after you in a few years from now for 4-6k.

The medical bills, have been in my opinion the easiest to have deleted through both goodwills and PFD. I would just call each medical bill place and explain your situation, they are usually more understanding than capital one. I would try to offer like 50% in exchange for deletion. Pay those who agree, for now, ignore those that will not.

Those credit cards that have been charged off/sold, who are they with? You want to get on top of those before those $200 balances become $1,000 balances.

I would suggest applying for a secured capital one card, with say a 500 deposit. You are going to need positive credit once all the negative stuff starts to fall off.

Re: Need Advice

mashdun — Tue, 09 Oct 2012 17:59:25 GMT

Well... I didn't mean I wanted to get a 'new" car... just something new to me. But I do need it to be reliable and something that is fuel efficient can pay the payment compared what I drive now. My truck gets 15mpg. Driving 200 miles round trip costs about $50 in my truck. A fuel efficent vehicle getting 35mpg would cost me $20.

Driving three days a week or lets say 12 days a month.... my truck cost me $600 in gas. One with better gas mileage would cost $240. I thinking of just a small car in the 7-8K range to get me through law school.

I do work from home as a web developer and make decent money while going to school full-time. Honestly, I could pay off a 7-8K vehicle in 6-8 months. I don't have any debt other than rent, utilities, insurance, and cell phone.

So I'm going to call Capital One and pay this settlement on the repo. Yes the letter is from Capital One directly.

I do think there was something messed up about the judgement on my record. Seems like the attorney sent me a letter afterwards saying something was incorrect about it. Of course I don't know where the letter is now. I was thinking about getting a copy of the judgement and finding out who the attorney was and see if it's possible to have it removed.

Has anyone had success removing judgements? If so how?

Re: Need Advice

mashdun — Tue, 09 Oct 2012 18:44:32 GMT

I'm looking for info on here about Dispute and Verify... can someone send me some good links? Any good example letters?

Re: Need Advice

llecs — Tue, 09 Oct 2012 18:03:22 GMT

Welcome to the forums!

I'd suggest reading the following:

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

What Steps Do I Take - great for learning the repair process.

and Example letters - PFDs, GWs, DVs, etc.

Re: Need Advice

mashdun — Tue, 09 Oct 2012 18:52:14 GMT

I called the court house where my judgement was filed. I was living in florida at the time of the original judgement and I drove all the way to Tennessee to go to court. The day in court, the attorney for Capital One said the paper work was all messed up. A week or so later I got a letter from them saying it was dismissed.

When I called the courthouse today, the clerk said the one on file (on my credit report) is a default judgement (she said I didn't appear) a month or so after the intial judgement. She agreed that the intial judgement was dismissed.

I was never told about this second court date. What can i do about this? I'm going to get a copy of it sometime this week. She said I'd have to drive by and get a copy. Can I not request a copy by mail? It's like a 4 hour drive round trip.

Re: Need Advice

jadeite788 — Tue, 09 Oct 2012 19:49:57 GMT

That does not sound right. I have a funny feeling Capitol One resold that car. Thats probably why they dropped the settlement that low. I would ask to double check.

Re: Need Advice

jadeite788 — Tue, 09 Oct 2012 20:09:13 GMT

As far as the default judgement goes the courthouse or Capitol one must submit proof that not only they filed but sent it either certified mail or hand it personally in your hand. It is up to you to make sure contact information is updated with creditors. If they have proof then you are kind of stuck. Repo's stay on your credit report for 7 years. Personally me I work on those medical bills and either write GW or PFD's along with disputing inaccurate information.

Re: Need Advice

mashdun — Wed, 10 Oct 2012 04:32:27 GMT

OK. I've read up on DV's. I'm unclear on something. Do validation letters have to be sent out in the first 30 days? I don't know when they were added to my credit report, so hope that's not true.

I received a settlement letter from a CA that purchased a collection from a credit card company (HSBC). The HSBC account on my credit report shows a balance of $0, saying account sold. The collection agency has not reported it to my credit report yet and I'd like to avoid it being added. The settlement offer is for $252... balance being $722.

Should I ask them to validate the debt first? or Pay the settlement? or see if I can PFD? Is there anyway to get the negative HSBC account removed since they sold it? It says I have til November 2nd, 2012 to respond... assuming they will report this on my credit if I don't. How should I squash this?

Update....

I just noticed on the settlement letter, they are refering to LVNV Funding LLC as the creditor and HSBC as the "Original Creditor." Maybe LVNV Funding purchased it from HSBC, then Convergent Outsourcing (current CA who the letter is from) is working the collection for LVNV Funding. They refer to them as the client. Either way... neither company have reported anything to the credit bureas yet. Appreciate any advice here.

Re: Need Advice

llecs — Wed, 10 Oct 2012 05:06:55 GMT

Per the FDCPA, you have 30 days to send a DV to the CA in response to their initial collection activity (usually via a dunning letter to you). IMO, it's OK to send a DV post-30 days. You lose the legal oomph within the letter, but most of my CAs responded after having sent out the DV months/years later.

You can't send a PFD if they aren't reporting. You can modify the PFD for a pay-for-not-reporting letter (e.g. I agree to pay $x in exchange for not reporting...please agree to these terms in writing). Is it possible it is too old to report? You can try to pay the settlement, but there's always a risk they'd report $0. However, if not paid they can report anyway. Catch 21.

It's normal for the OC to report as a paid CO. You could try GWing them once the debt is paid.

Re: Need Advice

mashdun — Wed, 10 Oct 2012 08:19:12 GMT

OK. I'll see if I can get them to agree to a pay-to-not-report. Should I just agree to the $252 or something less?

Re: Need Advice

llecs — Wed, 10 Oct 2012 12:18:42 GMT

I always offered 100% in my PFDs, but that was because the need to have the baddie removed was greater than the need to save money. I didn't want $50 or so to hold up a deletion or to diminish the odds of a deletion. I also didn't want to be placed in a position where I had to increase the PFD offer because they rejected it at a lower amount.

Re: Need Advice

annielorie — Wed, 10 Oct 2012 13:53:36 GMT

With re: to your judgement you can go to court claim improper/noservice to you and if the attorney for the other side doesnt show uyp or have proof of you being served judge must vacate/dismiss judgement. Chances are they wont show because they have no proof for the court ot show u were properly served. THE END

Re: Need Advice

mashdun — Wed, 10 Oct 2012 14:06:17 GMT

I actually do think I was not properly served notice. I was served notice for the first court date, traveled from Florida to Tennessee... a few weeks later it was dismissed. I never received notice that they set a new court date. I think they are using the first notice to apply to the second court date. I'm going to go up there in a couple weeks and hopefully get it removed... I may wait til this paid Capital One Auto settlement shows on my credit report... that way, if it becomes a headache I can show them it's been settled in full and maybe they will go ahead and vacate it.

Re: Need Advice

annielorie — Wed, 10 Oct 2012 20:28:39 GMT

Look bring all paperwork from original court date with u and the proof payment was made they should vacate get there early to get happy judge not tired n hungry one