Is there a way to rebuild without spending copious amounts of $$$$?

[Anonymous]

It's great to hear that you have a good job.  You've got that going for you.  It sounds like your income though is close to your expenses.  With that, and an inability to file BK again, your repair is going to be a long, slow crawl.  Here's what I'd advise:

• Treat your one secured card like gold.  If you share with us which bank it is through we can let you know it's chances of graduating to an unsecured card and when that might happen.
• Do not apply for any new credit right now.  You likely would only get approved for the very worst of sub prime that will cost you way to much in the long run with very little benefit to you.
• If you haven't already this year, order your free credit reports.  Once you get them comb through them thoroughly.  Identify any possible errors and work on getting those cleared up or removed from your report.
• Google WhyChat's HIPAA process to get your medical debts back in the hands of the hospital. Then contact the hospital and ask if you qualify for charity care.  Even if you don't, hospitals will often make affordable payment plans for you.
• Start to work on an emergency savings fund.  Even if you can only save $5-10 from each paycheck, it will grow over time so when unexpected circumstances arise in the future you will have a way to pay cash rather than use credit.
• Start a goodwill letter writing campaign for any late payments on your report.  This is free, and may get some of your negative items removed.
• Decide right now that you are no longer going to use credit irresponsibly.  It is a tool, not an emergency fund or "fun" fund.  With your current card keep your balance to no more than 10% of your limit.  
• Explore ways to increase your income.  I know it is very hard with children, but can you pick up overtime at your current job? Could you work just a few hours a week at a second job?  If you are able to swing this, dedicate any extra income 100% to paying off your debts.
• Once you have some funds set aside start working on negotiating PFD's with those you owe money to.  Pay those off first, as that will increase your credit score.
• After you've completed all PFD's that you can start tackling anything left.  Even if they won't remove, it looks better to have paid what you owe rather than leave it owing.  
• Come back here and keep reading for ideas on increasing your score once you have your current situation under better control.

[Anonymous]

@PNW - her secured card was closed and she doesn't have the funds to secure another one. Her debts are unpaid, so a GW campaign is out of the question. She cannot pay them, so PFD is also out of the question. It doesn't even sound like she can afford to settle the debts at this time.

[Anonymous]

Alright everyone, I'm feeling extremely discouraged about my credit situation.  Here's where I'm at:

Filed bankruptcy in 2014.  After the bankruptcy I got several credit cards:  2 CapOne cards, a Comenity Bank/VS card and a Kohls card.  I tried to be responsible with them, paid on time until husband lost his job.  I then had to put every single penny of my income into keeping a roof over our heads and food on the table - that took priority over the credit card payments.  All the cards were charged off/closed/sold to collections.  I also accrued some medical collections (under 2k) so that is also reporting on my credit.  About 9 months ago I took out 2 secure credit cards in an attempt to rebuild, one I've kept up with and the other I missed payments for 90 days and they closed it.  I checked my FICO today and it's 445...  I just don't know what to do.  I'm now a single mom, most of my income goes towards my living expenses and food on the table, so I can't afford to pay off any of the collections.  I don't qualify for any credit cards due to my low score unless they're secured cards (and I can't afford to have money tied up in deposits for secured cards).  My credit score is affecting my quality of life.  I can't rent a decent home (even though I've never been late on my rent) because landlords look at my credit score and say "no way!" so I'm stuck renting in the ghetto and/or from slumlords that don't care about credit.   I mean, what can I do that doesn't require me to spend thousands of dollars that I don't have?  Am I just stuck until the 7 years runs out and all the negative stuff falls off?  Are any of the credit repair companies effective worth the money? 

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Looks like she's still got one open account.  I agree if BK again is possible it might be the best way out.  If it isn't I don't think things are entirely hopeless, but as I said it is going to be a long, slow crawl.  Perhaps by cutting expenses, increasing income if possible, and most importantly changing spending habits she will be able to get out of the hole eventually without another BK.  

[Anonymous]

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Looks like she's still got one open account.  I agree if BK again is possible it might be the best way out.  If it isn't I don't think things are entirely hopeless, but as I said it is going to be a long, slow crawl.  Perhaps by cutting expenses, increasing income if possible, and most importantly changing spending habits she will be able to get out of the hole eventually without another BK.  

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You're right, I somehow skimmed past the second one.

I actually think closing that to get the deposit to apply to debts may be something that would be a good idea, depending on how much it is and other than the $300 VS, don't know what the debt amounts are.

She addressed that her income cannot be increased, and while she'd consider relocating, she has been unable to find a place to live out of town because of her credit. Catch-22 there.

My biggest fear for her is getting sued. Any sort of activity that isn't at least a debt settlement could fuel a garnishment or bank levy. I'd like to give OP the benefit of the doubt that she is already only spending on necessary things, but OP, if you feel so inclined, you can share your monthly income, debt amounts, and monthly expenditure and we can see if you can afford to set up some sort of payment agreements with the collection agencies.

[aLottaGoodEggs]

My net monthly income is $2,800.00 + $260 in Food Stamps

My expenses are as follows:

Rent $1,350

Child Care: $500 (I have 3 kids)

Phone: $140

Utilities (electric, water, trash, gas): $350

Car insurance: $120

Gas: $40

Food/ household items: $400-$500

So my total monthly expenses are about $3000

My outstanding debt is as follows:

Hospital Bill: $1,435

Hospital Bill: $397

Capital One: $300ish

Capital One: $500ish

Kohls: $568

Comenity/VS: $300ish

Credit Union Loan: $700ish

The secured card is with OpenSky $300 credit limit

[Anonymous]

Now seeing that your secured card is Open Sky (won't ever graduate, is seen as sub prime), I agree with closing it and using your deposit to pay of the Comenity/VS card.  That takes one thing off your plate.  Contact the hospital and ask about charity care.  As you qualify for food stamps you will likely qualify for their charity care program.  If they will remove those debts that leaves you with a little over $2000 outstanding.  That doesn't seem like a terrible amount.  If you could find a way to cut expenses and perhaps even earn a little extra on the side you could pay those off in a year or so.  If you aren't eligible for discharge via BK again, but could gain the protections against garnishment that may be your way to go.  Get creative with cutting expenses and earning extra.  It may be a tough year, but I've done it and it's worth it.  I babysat a neighbors kids during her evening shifts a couple days a week.  She paid me just $50 a week but it was enough to really make a difference.  

[Anonymous]

So say I cut my expenses an just fed my kid's beans for dinner 5 days a week and could put $100 a month toward payments of the debt... will that actually help my credit significantly? It's still going to be considered a bad debt, right? I already tried negotiating a PFD like a year ago with Kohls and CapOne and they refused to agree to anything like that saying it was illegal.

[sarge12]

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@Anonymous wrote:
So say I cut my expenses an just fed my kid's beans for dinner 5 days a week and could put $100 a month toward payments of the debt... will that actually help my credit significantly? It's still going to be considered a bad debt, right? I already tried negotiating a PFD like a year ago with Kohls and CapOne and they refused to agree to anything like that saying it was illegal.

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PFD's happen everyday...nothing illegal about them that I've ever heard of.

[Anonymous]

While each small payment will not increase your score, over time having these paid will improve the overall picture of your credit.  I would save up until you have enough to pay the smallest debt then try for a PFD for it.  If they won't do it, pay it anyway. Repeat this process until you are caught up.  Anyone doing a manual review of your credit will see this as favorable opposed to having unpaid debts (which will be very important if you hope to buy a home someday).  7 years or so after the date of first delinquency for each debt it will fall off your credit report and you will see a small increase.  You will get your biggest increase when the last falls off.  At some point (but not now, and not until you've built an emergency fund and have seen increases in your scores) you will want to apply for credit again.  Don't do this until you are sure you can make every payment, every time, on time!  Try for another secured card with a bank that will graduate you to an unsecured card.  Discover is often seen as the best, and may graduate after about 7 months.  Citi and Bank of America also offer good secured cards, but take a little longer to graduate.   

As far as "feeding your kids beans for dinner", that is a choice you will have to make.  There is tons of info online about feeding a family cheaply.  It's hard to say no to the kids when they want dinner out, or a new toy.  Just keep telling yourself you are making tough choices to improve you and your kids lives.  It's hard, sometimes thankless, but it can be done.  I've been there, have crawled (most of the way) out of a deep hole.  I'm 7 years out of my own bankruptcy.  I'm down to my last two "baddies" on my credit report that I have the money to pay and am trying for PFD's for, will pay anyway if they won't.  I've got 3 credit cards in good standing and will qualify for a decent rate on a car loan this summer when I go to replace my car.  Keep you chin up and keep focused on what you're doing and why.  The fix won't be quick or easy but totally worth it in the long run.  

[Anonymous]

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@aLottaGoodEggs wrote:

My net monthly income is $2,800.00 + $260 in Food Stamps

My expenses are as follows:

Rent $1,350

Child Care: $500 (I have 3 kids)

Phone: $140

Utilities (electric, water, trash, gas): $350

Car insurance: $120

Gas: $40

Food/ household items: $400-$500

So my total monthly expenses are about $3000

My outstanding debt is as follows:

Hospital Bill: $1,435

Hospital Bill: $397

Capital One: $300ish

Capital One: $500ish

Kohls: $568

Comenity/VS: $300ish

Credit Union Loan: $700ish

The secured card is with OpenSky $300 credit limit

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1. Contact the hospitals and ask about charitable outreach and what you can do about your outstanding bill with your income and lack of insurance coverage for them. If they don't forgive them, google "WhyChat HIPAA" and start there. I believe there is a section about ACA laws that you would be covered under.

2. Close the Open Sky secured card. That thing is straight garbage. The positive payment history will sit on your file for 10 years, so you'll still retain that. You don't need a relationship with them.

3. I budget $100/mo per person in my house. That's $200 between my daughter and I. As long as I don't buy crazy stuff, I can hit that. Shop at the cheapest grocery story you can. Here we have Aldi, Shop 'n' save, and Trader Joe's, all of them with very inexpensive groceries. I work a lot with Share our Strength and No Kid Hungry to help provide resources and programs for people in our situation, but especially in yours where you are stretched much more thin than I am. https://cookingmatters.org/ Locally, we have cooking classes available with a partnered food pantry through Cooking Matters, but there's also a ton of resources on their website. 

I think you can get this down to $350 without having to eat canned beans for every meal. 

4. Are any of your outstanding debts still at the original account holder, or are they all in collections? Can you list the collections agencies, if any, each account is with, and the dates each of these were closed or charged-off (with a label of whether or not they were charged off)? We can figure out the best place to send the $300, or if it should be spread out with that information.

Ideally, I want to see if we can change your budget, send payments to each creditor (or collection agency) and put some away for savings.