11-08-2012 11:57 PM
Hi everyone. First time poster, I was directed here by some friends who received tremendous help and support so I decided to come here and reach out. I'm not entirely certain what I'm expecting to get out of this, but this at least seems like a first step to communicate with people more knowledgable than I am, so why would I turn that down. Here we go.
Short background: I just turned 30. My score is 585. I work in the legal field. I don't make millions, but I do okay. I rent. I have very low monthly overhead for living. My car is fully paid off. I'm not married, I don't have kids, and I don't live outside of my means. I have no credit cards. All of my monthly living expenses are paid on time, and are a very small/manageable fraction of my monthly income. I have no propertly/mechanics leins against me for anything, and all (the few) possessions I have I own outright. My very first (and only positive) line of credit was my car. I financed through a bank for 5 years when I was a junior in undergrad. This has been satisfied, and only blemish is I was 30 days late 2 times out of the 60 payments. For the last year I have been level headed, and mostly living cheap, saving as much money as I can, repairing one life issue at a time, and now everything is complete, and the last thing to address is my financial.
All of my problems began after law school. I made some bad life decisions. What they were doesn't affect this story much, but the important part is that now today, I am happy to be alive, I am fully physically healthy again, and mentally I am sound and back to normal. It was a long road, but the important part is that the problems that caused all of this have been expelled and are no longer affecting me, or around to cause more damage, and I am 100% motivated to tackle and make whole the financial issues I acquired. The problems I created during this long period are: I let my student loans go into severe default. This is the greatest sum of money. I ran up a credit card to roughly ~$1400 and bailed on it. I had a default judgment entered against me in court for this credit card, which is now roughly ~3k. And lastly there is a tiny checking account that went negative for a couple hundred bucks, and says it is in collections. With interest I'm guessing its a few hundred more. To be fair, I can write two checks tomorrow and pay those off in full, which I intend to do, so they aren't really the issue. It is mostly the edu loans, and then re-establishment of credit score.
From what I can tell almost all of my edu loans have been sold off to collections. My credit report is a massacre and difficult for me to read because I've never looked at one before taking on this life project of repairing. Most of the entries from the defaults reflect severe default and report claims filed with the government. Here's the breakdown:
I have two entries for US DoE, one is obviously my unsub loan, the other is my subsidized. These have been assigned to a collection agency who now has their own entry, I've gathered and read the letters. The original principal was ~$6,400. This is now roughly ~$8,500. To my knowledge, I have NOT been sued for this.
I have 3 entries for loan company A. These reflect the severe default for history and lack of payment. All 3 say claim filed with government, and the balance and past due for these say 0.
The guarantor for that company A has 3 entries of their own now, all 3 saying "collection". The balance owed amount on these 3 is roughly ~$66,300, which is declared on the credit statement as of 9/2012 and I do not have any mail or statements for this. To my knowledge I have NOT been sued for this.
So now my questions: How do I even go about making this right again? I obviously cannot pay it all off in full, so some kind of arrangement will be necessary. Should I call the DOE or their collection company? Should I call the loan company Or the guarantor? It seems like such an amount to not come back from. At what point do I begin long term repair after getting a plan for repaying this? Should I get a cheap credit card and just keep it at a zero balance every month? Should I not apply to anythin to keep inquiries low? I don't know where to begin or what my options/best course of action even are. I truly know nothing about how any of this works. I'm open to all suggestions and avenues to explore. I'll also check back in regularly to answer any questions that might help clarify. I'll be reading as much in these forums as I can. Thank you to everyone just for reading. God bless!
11-09-2012 01:09 AM
Hello and welcome to the forums. First I want to say congrats on improving your financial situation. We make mistakes, that's why most of us are here, I know that's why I'm here. You're not in that difficult situation, with a little time and work you can greatly improve your CRs. Let's take a look at what you have.
1. Default judgement on the CC. You should pay this and then contact the court where it was filed and see what their process is for vacating it if they will.
2. The checking account. You need to send a PFD for that. You should also pull your report for Chexsystems and make sure you're not listed.
3. The student loans, and yes this is the biggie! You should look at who exactly has what. You need to send DVs to the collection companies that are listed on your CR to make sure they still have the debt and exactly where you stand with them. The problem with government backed student loans is there's no SOL on those. So they can come after you at any time. You need to see what it's going to take to get these back on track.
Now, where did you get your reports from? Have you pulled your free reports from www.annualcreditreport.com ? This isn't one of those advertised tv spots. It's your actual free mandated yearly report. They generally have more info than the some of the others too. Once you have those from TU, EX and EQ. You should post them on here, leaving off account numbers and personal info. That way we can break each one down.
I wish you good luck and will be watching for your follow up posts.
12-18-2012 10:46 PM
Wow. Just spend the last hour typing, and lost it all so I'll try again to remember it all. So it has been roughly a month, and here is the update:
1) The Credit Card judgment has been completely paid off. I paid it off in full, in one payment. This judgment satisfaction has been filed with the court, and I have all of it in writing.
2) The checking account has been completely paid off. I paid it off in full, in one payment, it was small. I have the PFD in writing. The Agency said that they only report to TU. I completely forgot about the Chexsystems, I have just ordered my free report from there right now, it said 5 days. I don't anticipate being on it anymore than what this little debt was. I will post the results in this thread when I get them.
3) The educational loans are in 2 different spots. The first is a US DOE loan, that is now owned by a company called Financial Asset Management Systems. The size is actually rather small. The principal is $6.4k, the interest is $461, the BS fees and costs is $1.7k, for a grand total of ~$8.5k. I could actually write a check tomorrow and pay this off in full in 1 shot, but it would flatten me a bit, and I am not convinced that would benefit me at this point in time. Perhaps a settlement offer would be a better approach. This sum of money is also from a dated letter from 10 months ago, I can contact them to get an accurate total, but it shouldn't be more than a few bucks more. Also, there are 3 entries for DOE, and I am not sure what the third means, however there seems to be no dollar amount attached to it.
The other is a much larger series of 3 entries, by two companies: College Assist and Nelnet Guarantor Solutions. These companies are basically a functioning arm of the Colorado Dept of Higher Education (where I went to law school, but do not currently reside). If I'm reading these right, they represent roughly $65k. I have absolutely no clue how to go about approaching them for this.
I have obtained credit reports from TU and Experian. Equifax told me I needed to send them a whole bunch of documentation proving who I am, but I just haven't bothered doing all of that because the TU and Exp ones are pretty accurate and similar. How should I go about posting those here? As image files with blackout? Or as text?
So at this point, I'm really just overwhelmed by the edu loans. I have absolutely no idea how to approach them. I vaguely have read up on rehabilitation and consolidation. I just don't know where to even begin. In addition, I'd like to adopt a strategy that would allow for me to obtain student loans again in the future. Obviously not tomorrow, but I'm not quite where I want to be in life, and for me to make that last step will require a bit more school. So whatever strategy can make that goal happen, is the one I'm more likely to be interested in, unless it's going to completely bankrupt me some how.
I'm open to any and all ideas, thank you for reading, and your help.
12-29-2012 10:28 AM
I've posted this in the student loan forum. I've started my loan rehab process, but I've hit a snag with the Windham group who wants a ridiculously high monthly payment.
Here is a link to the post in that thread:
12-29-2012 11:29 AM