Here's the short version of my story.
Filed for BK7 in 2003 after years of irresponsible debt management. The court referee basically lectured me about how stupid I was for filing and made me feel like a complete POS. The court wanted to convert me to a 13. I had a change of heart and decided to suck it up and make a go of it myself. I wasn't interested in being babysat by the court system for several years, and figured I could fare better on my own. I petitioned to get the filing dismissed and they obliged. Thus began the real work.
After the dismissal I knew that I had a small window of time before my creditors were notified and came beating down my door again, so I started formulating a plan of action. I absorbed every piece of information I could find about credit. How it works, how it's assessed, how it's reported, what rights I had as a consumer, what obligations creditors had under the FCRA, etc. I learned all about disputes. It was a really enlightening time. Instead of running from the enemy, I snuck up under it's slumbering belly and observed it's habits.
Next, I analyzed my debt and the severity of each account in order to prioritize. Honestly, I did engage a 3rd party to help with disputes. This was a huge step. As I started seeing success on that front, I began writing to creditors for my smaller accounts, paying them off when I could, settling when I could for less. At that point I was not hip to the concept of PFD, so I blew some opportunities early on to clean up my file. Later, I got pretty good at it and had a lot of success working with creditors directly.
On my larger accounts, I managed to settle for an average of 40%. This was tough, as I had to scrape together the funds before approaching the creditor. I learned early on as well that EVERYTHING needed to be in writing, using explicit and detailed language about what happens on both ends. I began paying bills on time, monitoring my bureaus. I sent, emailed and faxed countless letters. I worked on this for over 3 years on and off.
Jump forward to early 2007 when I started to see everything begin to pay off. In 2003 my scores were mid 400's. Today, I'm a dozen points away from 700 on 2 bureaus. Experian is being a little more stubborn, but not too far behind. I bought a house at prime in July and have 2 Amex cards, and that's mind-blowing to me.
Whenever I buy something with a credit card now I am reminded how it felt to go to a restaurant with family or friends and not be able to spring for the entire bill because I didn't have any credit. I remember not being able to rent a car, or take my family for a spontaneous weekend outing. I remember the piles of collection notices in my mailbox every day, and not being able to answer my own phone without checking the caller ID. It was a horrible feeling, and it still resides in my gut. I guess it's healthy. I don't ever want to forget.