Rebuilding after these issues

[Anonymous]

I have the following issues on my report, my score is currently 545 :

Chapter 7 BK 12/11 b/c the bank was going to take my home. They modified, BK was dismissed by Court b/c I didnt file docs (didn't need to continue the BK after they stopped the sale date and modified). Mortgage is now paid on time for last 6 months. Here are my collection accounts, mostly updated in 2011 (about a year and a half ago)

Account:   Balance / Reported Payment Status:

1. PORTFOLIO RC		$1,282	In Collections
2. TRUE NORTH		$130	In Collections
3. TRUE NORTH		$130	In Collections
4. CAL SVC BUR		$700	In Collections
5. MERCHANTS CR		$95	In Collections
6. CB STOCKTON		$168	In Collections
7. C B S J		$268 - 2008	In Collections
8. BEST SERV CO		$0	In Collections

I have read there is little point paying off these collections to try to improve my scoreand that they will not do a PFD with

a compromise (I don't have the cash to pay these accounts). I have one secured CC and I'm working toget a second one.

I offered #5 a full payment in writing for a PFDabout 4 months ago and they never responded.

Would it help to have a letter put in my file explaining that my mortgage co forced me to file BK to save my home?

Suggestions about what I might do to improve my score?

[llecs]

Welcome to the forums!

I'd suggest reading the following:

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

What Steps Do I Take - great for learning the repair process.

and Example letters - PFDs, GWs, DVs, etc.

I'm guessing these are CAs?

For these 8, if inside your state's SOL make sure you have 100% of the money saved up before doing anything. Otherwise, wait until your state's SOL expires. If you have the $$$ set aside to PIF or SOL expired, then send each a DV letter. If they verify and you agree with the debt, then send a PFD (you can always offer a settlement if you wanted to).

ETA...on #8, since paid, mail them a GW letter asking for deletion.

Your CR allows for personal statements but they won't do anything for your credit and lenders don't view them. Plus, they are very difficult to remove. I'd skip it. You also wouldn't want to put that statement in there. The lender didn't force you to file BK. It was a lack of cash flow or savings due to job loss, illness, whatever that led to not paying the mortgage which resulted in the BK.

[Dapper_Dan]

What's the deal with #8 @ $0?

If I were in your shoes, because these are not charge-offs yet, I would go for PFD.  These balances, as hard as they may be for you to pay off, are nothing.  If you had $10k balances, then fuggeddaboudit.  But I think you can tackle some of these.  If you can do 1 every 3 weeks, then you're getting somewhere.  If the collection agencies become a royal pain, then DV them and dispute and deny deny deny.

Go for the smaller amounts first.  As the older ones age, you'll have more time and they'll turn into charge offs if you let them lag.  At some point, you could settle, but from what I've noticed on myfico, settlements are just as bad as charge-offs and there's almost no point.