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Every CA is refusing PFD. Is it even worth paying?

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hippychic823
Regular Contributor

Re: Every CA is refusing PFD. Is it even worth paying?

Would it make any sense to pay off the CC's that are on collection and then file BK on the 47k foreclosure debt?
Message 31 of 41
Anonymous
Not applicable

Re: Every CA is refusing PFD. Is it even worth paying?

I wouldn't file for bankruptcy. I would also stop paying in full!

I had 20 collections when I began this road (in May) and my score was mid-500s. I've been going down the line settling the ones that report monthly (for about 40% of what's owed across the board), getting errors off my report, and now I have 6-7. Only a few are left and I'll settle them and pay when my mortgage closes.

In my case, they were almost all old debts. I think only two were within the last 2 years. They weren't impacting my score anywhere near as much as you might expect. I got two tiny credit cards and that boosted me a ton, just having good payments every month.

I'm not sure why you're worrying about your score right now. This is all really recent stuff. What happened? You say you have good income but you defaulted on everything really recently. As time goes on, if you figure out what happened, address it, and make sure it doesn't happen again, your score will increase.

My finances were a wreck when I got all my collections and I've really had to solve that before any repair strategies would've worked.
Message 32 of 41
hippychic823
Regular Contributor

Re: Every CA is refusing PFD. Is it even worth paying?

What happened? Life. My hours at work got cut drastically; the home I let foreclose on turned out to be a major money pit as far as needing repairs (apparently the previous owners fixed some major problems just enough for it to be able to pass inspection and then about 6 months after moving in I had to sink some serious money into repairs); the town that the home was in was seriously price gouging the utilities (Google "Cairo Public Utilities", the Atty General of the state even stepped in but nothing was done about it) I'm talking my avg electric bill was $1k monthly seriously.; I got pregnant and some complications towards the end of the pregnancy and was forced to take off work waaaay earlier than I had planned so had basically no income at that time and started living off my cards and what little savings I had accumulated; began only making the minimum monthly payments on my cards, then just quit making payments completely just to keep food on the table and pay my mortgage and my ridiculously expensive utility bill; when it got to the point that I had to take out a loan from a freaking payday loan finance company just to buy groceries I decided to say "f#*K it" and just walked away from the home and moved into a nicer rental home.
I'm worried because credit is important. I've never ever been this low financially and I want to fix the mess I got myself into. I just want to go about it the smartest way possible.
Message 33 of 41
hippychic823
Regular Contributor

Re: Every CA is refusing PFD. Is it even worth paying?

Also I'm worried because 2 of my accounts are in PRA's litigation department and I don't want to be sued. And I'm tired of getting called by these CA's all the time.
Message 34 of 41
Anonymous
Not applicable

Re: Every CA is refusing PFD. Is it even worth paying?

I'm not asking that to judge you. I understand things happen. But digging out from the mess is much more important than your credit score, and rebuilding your finances and gaining stability is probably a better goal right now.

I've been in a huge mess too and it took a long time to settle with creditors, pay off debts, stop the collection calls, etc. If you focus on that, your score will go up through time, and you don't need to do much about it other than ensure you have a few positive credit lines reporting every month (opening a couple of secured CCs might be a good idea right now just to get positive payment history going).

I just think it's important to get on secure financial footing first before really worrying about accessing new credit. Whether you decide to declare BK or just work your way through these debts (settling!! Not paying in full!) that's going to help you establish a realistic budget and financial habits that will avoid you having these issues again.
Message 35 of 41
hippychic823
Regular Contributor

Re: Every CA is refusing PFD. Is it even worth paying?

I definitely don't want to access new credit at this time. I guess I'm probably focusing too much on my score but my whole CR is just a big mess. It is literally nothing but collections and my car loan (the only positive thing on there besides a few payday loans/finance companies that I got loans through and paid off quickly). My score is in low 400's, even if I wanted new credit I couldn't get it. I just want to stop living in fear of getting my wages garnished and stop the never ending phone calls. But also, I would like to see an improvement in my scores because they're just sooooo horrible lol Smiley Sad
Message 36 of 41
Anonymous
Not applicable

Re: Every CA is refusing PFD. Is it even worth paying?


@hippychic823 wrote:
I definitely don't want to access new credit at this time. I guess I'm probably focusing too much on my score but my whole CR is just a big mess. It is literally nothing but collections and my car loan (the only positive thing on there besides a few payday loans/finance companies that I got loans through and paid off quickly). My score is in low 400's, even if I wanted new credit I couldn't get it. I just want to stop living in fear of getting my wages garnished and stop the never ending phone calls. But also, I would like to see an improvement in my scores because they're just sooooo horrible lol Smiley Sad

Forget the number for awhile. Pretend it's 700. Anything to not focus on that.

 

Focus on the idea of settling/paying debts.

 

As far as whether or not you should file bk, I think that just goes back to how you feel about the larger debts, namely the foreclosure. Please do the math of how much you can afford to put towards your debts each month and then just figure out how long it would take you to pay it all to 0 (settling or not) and consider if that's a timeframe you are comfortable with. If not, then bk might be a better option for you.

 

I don't think it's fair for us to compare our situations to yours. It's your life, not ours. We can offer you hope and guidance, but truthfully most of the "quick success" getters from poor to fair are getting rid of VERY OLD debts and then opening new credit, or paying down utility. 

 

Your journey is going to be longer and probably more frustrating, and I cannot imagine the amount of stress you're under with the threat of garnishment from so many sources.

 

I think the sooner you get your budget for paying these debts figured out and communicating that to the CA's, the lower your stress levels will be. They tend to be less harassmenty if you're paying them and communicating with them. 

 

If you can afford to pay them in full, I would. You're going to have a better time with goodwill deletions if you do. Even if they won't remove them, the notation that it was paid in full looks better than settled for partial. Your goal is to greatly improve your financial situation and your credit profile in the quickest time possible - so just sit down with a spreadsheet and take the amount you have to put toward debt every month and divy it up among the CA's. Call them up, and tell them what you can afford to pay per month (or per pay period) and start paying it asap. 

 

You can think about BK on the foreclosure and perhaps talk to a few more lawyers before making a decision... do you know anyone who could refer you to someone trustworthy? 

Message 37 of 41
hippychic823
Regular Contributor

Re: Every CA is refusing PFD. Is it even worth paying?

Yes, I have a friend who referred me to someone. I'm supposed to speak with him on Wednesday. Thank you for all of your advice and encouragement Smiley Happy
Message 38 of 41
Anonymous
Not applicable

Re: Every CA is refusing PFD. Is it even worth paying?

Keep me posted Heart

Message 39 of 41
Anonymous
Not applicable

Re: Every CA is refusing PFD. Is it even worth paying?

I think it all feels so overwhelming and horrible, the key is to get back some sense of control and empowerment. When you're afraid of garnishments or judgments, the worst part (for me, at least) was that terrible, helpless feeling... and the shame.

 

I went through all of that (more than once) due to all sorts of awful life circumstances, but like the other poster said I was only able recently to get my credit on the road to improvement because a lot of time has passed. My strategy when I pulled my credit report back in 2012 and it was in the low 400s was actually to just... wait. I learned that wasn't the best strategy and I should've at least opened a couple of small secured cards to have SOMETHING reporting positively while I waited, but otherwise it wasn't such a bad strategy. It taught me to budget better, live within my small means, etc. It's amazing how creative you get when you don't have access to even one dime of credit lol. BUT that was only possible for me at that time because there weren't any debts that were going to result in garnishments or judgments or any of that awfulness. 

 

The foreclosure debt is really going to kill you if they are at all inclined to go after you. The other ones are probably workable to either settle for about 40% of what you owe or enter into small monthly payments. They aren't going to garnish or sue you if you've either paid them in a settlement or come up with a monthly payment plan they accept. That foreclosure is the real risk. I don't know what you can afford to pay on your non-foreclosure debts but they aren't overly high and you can likely work something out to stop any threat of litigation and/or garnishment.

 

I had a foreclosure in 2008 and they never even contacted me past the initial letters. My balance was very low, though, only about 6k owing plus some fees. Still, it eventually just fell off my credit report quietly with no drama whatsoever. So if they aren't currently hounding you it might be worth it to just focus on the other ones, get them all settled or in repayment, and just wait and see. You can always file for BK quickly if that foreclosure tries to bite you at some point down the line.

Message 40 of 41
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