Messed up bad with new Victorias Secret and Dress Barn account, is there any hope? GW?

[Phoenix-rising]

My friend who was recently divorced made some pretty bad mistakes her first time out of the gate with new credit accounts.  She's been a SAHM for 20 years and has 3 children at home.  Last year when her ex left the marital home he convinced the court he would pay all the household expenses and give her an allowance that could barely cover the necessities with no funds left over for emergencies.

She didn't have money to buy underclothes for her daughter or to buy suitable clothing for a court appearance, so she opened a Victoria's Secret account with a $100 limit and a Dress Barn with a $220 limit.  When the inevitable emergencies cropped up it left her unable to pay her credit cards and needing to borrow money from her oldest child in order to pay for groceries and gas. 

Both the VS and DB accounts wound up going 30, 60, 90, 120 days late and are showing up as serious delinquencies now.

The VS account was opened in 5/2008 and was late August - December 2008.  The high balance shows as $11, so it was barely used.  The balance is $0 now with a status of Pays as Agrees.  The last OK that shows up on her CR is from 02/09, so I suspect the account was closed even though it doesn't show a Date Closed on the TL.  A couple of lingerie items cost her 4 serious delinquencies on her credit report.

The DB account only recently became delinquent.  It was opened in 8/2008.  It started reporting delinquent on 7/2009.  Yesterday was the due date and they said that if it was paid in full yesterday it would report as Pays as Agrees for October.  It was paid in full, but of course there's the matter of the late payments left behind on her report.  I spoke to the Dress Barn (WFNNB) rep on the phone and he was only willing to accept payment in full, but said that legally they had to keep the lates and couldn't possibly remove the TL.  The amount paid was $293.

She has a long list of accounts on her report, but the majority of them were joint and were closed due to the divorce.  Others were closed from non-use.  She had an individual Discover Card from 7/2004 with a $6,000 limit that was NEVER USED.  Unfortunately Discover cancelled it in 02/2009 due to non-use.

She had an individual VISA card opened 1/2007 with a CL of $4,000 that she reported stolen in the beginning of this year when her car was broken into.  The only thing stolen out of it was her purse and the sachel she kept all the legal documents for her divorce documents in.  The bank said they wouldn't reissue after doing a "periodic review" of her credit record.  The only way to get that card reissued is for them to do a hard pull and with credit scores of 586 and 570, she isn't likely to get it reinstated right now.

Most of the GW letters I've looked at make references to being customers in good standing or long standing customers.  She is neither of those things.

What's the best chance, if any for a GW letter to work for someone in her position?

[Phoenix-rising]

I asked her yesterday about the VS account.  She had planned to pay in cash but she opened up the charge account to get the 10% discount trying to pinch pennies.  She actually did pay cash for all but $5.00 of the purchase.  When the statement came in the mail and it came time to pay the $5.00 she froze because she didn't think it was OK to pay for something from VS from the allowance she was given for NECESSITIES.  The only checking account she had was the joint account and she was afraid there would be repercussions from her ex if she wrote a check to VS.  It's hard to explain that sort of fear unless you've lived it.  She didn't think it was OK during the divorce to get her own separate checking account.

Does anyone think she has the slightest chance at getting some sympathy from WFNNB?  She's trying to compose a GW letter now. 

Since both VS and DB are owned by WFNNB should she write one letter to WFNNB?  OR

Two letters - one to DB and one to VS? OR

Two separate letters to WFNNB, one for each account?

Anyone????

[IOBA]

If I am reading this correctly, she wants to get the bads off her credit?

If that is her goal, she can write a goodwill letter that explains how her situation has changed -- then she was in a divorce, limited income.  Now, she has a full time job, receives additional income, and is much more financially educated.  Minimize the past, focus on the growth.  If she is aiming to purchase a house, then stating this in the letter may help. 

[IOBA]

Yes - each account needs to be treated as an individual account -- separate letters.

[Phoenix-rising]

Thanks for your reply IOBA.  She's not quite that far out yet.  The divorce was just granted a month or so ago.  She's still having to live off the allowance until the marital home sells and she gets her share of the assets.  She still doesn't have enough money to get off his cell phone plan and get her own phone.  She's not working yet and still has a long way to go.  There aren't a lot of positives to focus on yet.

Is it best to wait a year or so before trying to GW and she's got more financial experience under her belt?

[llecs]

It will never hurt to send a GW. Send it to each account.

[IOBA]

Why wait?  The sooner the bads are gone, the better!

The sooner she starts taking control of her finances, the better! 

How is your friend going to make ends meet between now and employment?  

[Phoenix-rising]

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@IOBA wrote:

How is your friend going to make ends meet between now and employment?  

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The same way she's been doing it for the past year, living on the court ordered allowance.  She's starting to job hunt now, but her skills are rusty and her self confidence is practically non-existent.  She had a masters degree and a job 20 years ago, but gave that up when her ex demanded she stay at home to raise a family and wait on him hand and foot.  She plans to start with a part time job to get her feet wet.  She'll be OK financially when their home sells and the assets are divided. 

Message Edited by Phoenix-rising on 10-07-2009 11:43 AM