@VALoanMasterwrote:
I've done tons of reading, met with credit counselors, my bank (Wells Fargo) and my bank's mortgage person, read other forums, talked to BK attorneys (of course all say oh yeah go ahead and file! It runs about $2k in my area).
I don't want to file BK if I can help it. I got myself into this mess and not sure I can just pay one fee and let it just go away.
Here is the advice I've been given:
1. I've been told to try and settle those charged off cards - all of them. - This is a good option for 2 reasons. 1) "Charge off" is the status of an account & it happens to be a derogatory one so if you change the status from negative to positive (paid, zero balance) it will increase your scores. 2) As you've already found out, the creditor can sell your account to a collection agency (CA) even though it's been charged off. This ends up double dinging your scores once the CA starts reporting & you now have two trade lines to fix. Get the settled before they are sold & become a bigger problem.
2.I've been told not to settle the cards that are charged off more than 3 years because it will tank my credit due to showing a current charge off, unless I can get a pay for delete. - See above. This advice would be more appropriate for collection accounts.
3. I've been told to keep paying on the one judgment I have been, and then try and contact the other judgment's lawyer to try and settle for making payments for "today's balance" and not accrue more interest and in exchange they don't immediately attach my bank account or garnish my wages. - I'm really not sure what the best course of action is when it comes to judgments but do you really want to worry about them seizing your bank accounts or garnishing your wages? This one be one of the primary reasons why I would strongly consider BK if I were you.
4. I've been told to file BK Ch 7 and be done with it all, then wait two years to purchase the home. - I would seriously consider this option. Look at this way. You can file BK & be done with all of this in 3 months, give or take. That gives you the next 21 months to re-establish/build your credit so you'll be ready to buy your home once your BK has been discharged for 24 months. Here's another reason this option makes sense. It's almost impossible to increase your scores when you have derogatory accounts reporting every month. Sure you might see some improvement but overall it will take until all of the derogatory accounts have been resolved & stop reporting before you see significant improvement.
5. I've been told to file BK Ch 13 if I felt I had to pay something - and then after a year I could ask the court to purchase the home. - This is also an option.
6. I've been told #5 is wrong because no court would allow me to do that. - Not true. As long as it makes sense trustees will approve it.
7. I've been told to keep paying on the first judgment, enter into a payment arrangement for the second judgment, show payments on time for a year; forget paying or settlement on anything charged off over 2 years - the one that is more recent try and do a lump sum settlement (the last offer was $1800 that they sent). That the mortgage companies *could* possibly make me settle/pay the old charged off in underwriting but likely won't. After a year of paying on both judgments (and proving the payments), showing the settlement on the one credit card, the mortgage company likely will work with me on a mortgage.
8. I've been told I'm screwed and will never own a home, and I need to forget about all of it, wait 7 years for it all to fall off, hope the one judgment goes away after ten years, and keep paying on that one judgment to keep from getting garnished, and just let my husband get the mortgage. - See #4 above.
So if I filed Ch13, after a year (paying on time of course and everything "good" with the case), I could go to the trustees and ask for permission to purchase the home? And mortgage companies will give a mortgage on someone in Ch13 repayment?
