Rebuilding credit

[Anonymous]

Hey Jones,

It seems like you're definetly going through some hard times. I just wanted to chime in and off you a different perspective. A little over 3 years ago I was in a really bad situation much like you are. I had 11 credit cards 3 student loans all totaling over 88k in debt and I was only 22 at the time. Its more than depressing to think about your credit and future when youre drowning in debt. I made a life decision. I think you should too.

When you owe this much money you have to take a different approach to things. I was debating over declaring BK or not. I decided just to simply not pay any of the cards and focus all the money to what I could do with my life to build wealth and accumulate more money. I think you're situation is similar. When your annual income is not on par with all your outstanding debt its just overwhelming. You should focus on wealth and attaining more money than merely focusing all the money you have onto paying bills at this time. I know you are on this website to repair your credit, but if the income cant meet debt obligations I think its time to really think about your options.

In the years following my defaulted status on nearly all my obligations (except the student loans I was lucky enough to defer) I have increased my annual salary. I focused all my money into myself and a business rather than just giving it away to creditors and their interest payments. I have since paid off almost all of my debts (just 7k student loan left which is still in defferment). Its true that my credit scores are below average TU 602 EX 607 but I'm now in a position to rebuild not only my score but my life as a whole.

At the same time I had another college friend who was in my same predicament but with less debt, much less, to the tune of 30k. He has since taken the last few years and consistenly paid the minimums on his cards and is still in the whole for 28k or so. He has a better score than me but in terms of nomial value the money he paid on interest could of returned him more money. Over 9k he has sent to the banks purely on interest.

I think repairing credit and rebuilding are ideally good for people who have the means to finally fix things or else you will be just a slave to your creditors. I could be wrong here but I think credit is not really wealth for life, you will always have to pay it back regardless of whether you have a 25k limit or a 500 dollar limit on a card. Its more important to focus on getting money and accumulating wealth THEN paying everybody. 

Just my 2 cents.

[Anonymous]

wow thats really alot. are these all recent charge offs/collections ? and if i were in your situation i would def go for the bk especially if your way off from the 7 year fall of period.

[schjones1978]

Thanks for all the input and advice. Here is an update:

Cap1 2011 $0

Cap1 2012 $0

Merrick Bank 2012 $0

Credit One Bank 2012 $0

IBM Credit Union 2010 $14,200 -Repo

Farmers Furniture 2013 $1,488

Fingerhut 2014 $0

National Credit Systems 2013 $3,198

Enhanced Recovery 2014 $77

Santander 2013 $26,000 

LVNV Funding 2013 $540 for Credit One

Chapter 7 Discharge 2007

Chapter 13 Dismissed 2013

On the flip side the positives are:

Chase Aug. 2006

USAA Dec. 2014

Capital One Jan. 2015

I'm also taking the settlement offer from Santander. Once that account has updated I will only have 3 'baddies.' I think I've made excellent progress.

[Anonymous]

I was going to offer up the idea of discussing settlement with Santander since you are still in possession of the vehicle.

Once you take that off the table, you don't have THAT much outstanding relative to your income. Emotionally, being in debt takes a big toll on some of us and that spills over into all aspects of our lives. And that in turn compounds not only our financial problems but personal problems and our ability to be successful in our careers as well.

FWIW, don't beat yourself up. All of us here have been there, and most of us have not only survived but thrived. We all have our stories and battle scars. Just remember you HAVE to take care of your immediate basic needs and current obligations first, be patient, and walk before you run.

It WILL get better. And we are here to offer support and guidance!

[Anonymous]

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@schjones1978 wrote:

Thanks for all the input and advice. Here is an update:

Cap1 2011 $0

Cap1 2012 $0

Merrick Bank 2012 $0

Credit One Bank 2012 $0

IBM Credit Union 2010 $14,200 -Repo

Farmers Furniture 2013 $1,488

Fingerhut 2014 $0

National Credit Systems 2013 $3,198

Enhanced Recovery 2014 $77

Santander 2013 $26,000 

LVNV Funding 2013 $540 for Credit One

Chapter 7 Discharge 2007

Chapter 13 Dismissed 2013

On the flip side the positives are:

Chase Aug. 2006

USAA Dec. 2014

Capital One Jan. 2015

I'm also taking the settlement offer from Santander. Once that account has updated I will only have 3 'baddies.' I think I've made excellent progress.

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How were you able to get the capital one charge offs removed? I have 2 that I PIF and cant get them to delete from my reports. 

[Anonymous]

All of the items you are showing as $0, were those included in BK? What items are in your Ch 13? You state your Ch 13 was dismissed, not discharged. That means you are still on the hook for anything that was included in your Ch 13 filing. I may be wrong, but a dismissed ch 13 tolls the SOL.

I'm just concerned there may be other issues nit on your CR, that may come back around legally.

I encourage you to take a look at your ch 13 petition and schedules. Make a master list of everything you owe. Then sit down and do an old fashioned budget. If you had a good bk atty, you have a starting point in your ch 13 petition. The problem is, in many cases a ch 13 budget usually is not realistic. Either they had to cut so much out so you have enough disposable income to cover priority debts, or maybe you just get sick of living on ramen noodles and shopping at thrift stores for 3-5 years. (that's actually the reason a bk atty told me most ch 13 plans fail).

[schjones1978]

I filed a complaint with CFPB siting that it was a duplicate and one must be removed. 

[schjones1978]

"All of the items you are showing as $0, were those included in BK? What items are in your Ch 13? You state your Ch 13 was dismissed, not discharged. That means you are still on the hook for anything that was included in your Ch 13 filing. I may be wrong, but a dismissed ch 13 tolls the SOL."

The items showing a zero balance are not included in the BK. The chapter 13 was dismissed also a year ago. They reflect a zero balance because they are charge offs. Note that anything that is x'ed in red is a result of my lodging a valid complaint with the CFPB and the company directly. So, they will not come back as a debt owed at a later time. I don't beg this companies to follow the rules. I gave them 30 days to make corrections, if not I moved on to the next step. My letter don't contain legal jargon. The tone of the letters are that of a concern consumer. 

[Anonymous]

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@Anonymous wrote:

Hey Jones,

It seems like you're definetly going through some hard times. I just wanted to chime in and off you a different perspective. A little over 3 years ago I was in a really bad situation much like you are. I had 11 credit cards 3 student loans all totaling over 88k in debt and I was only 22 at the time. Its more than depressing to think about your credit and future when youre drowning in debt. I made a life decision. I think you should too.

When you owe this much money you have to take a different approach to things. I was debating over declaring BK or not. I decided just to simply not pay any of the cards and focus all the money to what I could do with my life to build wealth and accumulate more money. I think you're situation is similar. When your annual income is not on par with all your outstanding debt its just overwhelming. You should focus on wealth and attaining more money than merely focusing all the money you have onto paying bills at this time. I know you are on this website to repair your credit, but if the income cant meet debt obligations I think its time to really think about your options.

In the years following my defaulted status on nearly all my obligations (except the student loans I was lucky enough to defer) I have increased my annual salary. I focused all my money into myself and a business rather than just giving it away to creditors and their interest payments. I have since paid off almost all of my debts (just 7k student loan left which is still in defferment). Its true that my credit scores are below average TU 602 EX 607 but I'm now in a position to rebuild not only my score but my life as a whole.

At the same time I had another college friend who was in my same predicament but with less debt, much less, to the tune of 30k. He has since taken the last few years and consistenly paid the minimums on his cards and is still in the whole for 28k or so. He has a better score than me but in terms of nomial value the money he paid on interest could of returned him more money. Over 9k he has sent to the banks purely on interest.

I think repairing credit and rebuilding are ideally good for people who have the means to finally fix things or else you will be just a slave to your creditors. I could be wrong here but I think credit is not really wealth for life, you will always have to pay it back regardless of whether you have a 25k limit or a 500 dollar limit on a card. Its more important to focus on getting money and accumulating wealth THEN paying everybody. 

Just my 2 cents.

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The purpose of BK7 is to do EXACTLY what you describe, without the risk of creditors pursuing you in court, getting judgements, wage garnishments and asset seizures. Its not too difficult to emerge from BK7 in 24 months with 700-725 scores. They won't get much higher than that until the BK is gone but 700's are a dream for many of us.

Also in your last paragraph you seem to equate "Credit" with "Debt". Its very possible to have plenty of credit without having a lot of debt - and vice versa.

While I would say you are technically correct, credit is not real wealth - but having good credit reduces your "opportunity cost", and can make building real wealth easier.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

Hey Jones,

It seems like you're definetly going through some hard times. I just wanted to chime in and off you a different perspective. A little over 3 years ago I was in a really bad situation much like you are. I had 11 credit cards 3 student loans all totaling over 88k in debt and I was only 22 at the time. Its more than depressing to think about your credit and future when youre drowning in debt. I made a life decision. I think you should too.

When you owe this much money you have to take a different approach to things. I was debating over declaring BK or not. I decided just to simply not pay any of the cards and focus all the money to what I could do with my life to build wealth and accumulate more money. I think you're situation is similar. When your annual income is not on par with all your outstanding debt its just overwhelming. You should focus on wealth and attaining more money than merely focusing all the money you have onto paying bills at this time. I know you are on this website to repair your credit, but if the income cant meet debt obligations I think its time to really think about your options.

In the years following my defaulted status on nearly all my obligations (except the student loans I was lucky enough to defer) I have increased my annual salary. I focused all my money into myself and a business rather than just giving it away to creditors and their interest payments. I have since paid off almost all of my debts (just 7k student loan left which is still in defferment). Its true that my credit scores are below average TU 602 EX 607 but I'm now in a position to rebuild not only my score but my life as a whole.

At the same time I had another college friend who was in my same predicament but with less debt, much less, to the tune of 30k. He has since taken the last few years and consistenly paid the minimums on his cards and is still in the whole for 28k or so. He has a better score than me but in terms of nomial value the money he paid on interest could of returned him more money. Over 9k he has sent to the banks purely on interest.

I think repairing credit and rebuilding are ideally good for people who have the means to finally fix things or else you will be just a slave to your creditors. I could be wrong here but I think credit is not really wealth for life, you will always have to pay it back regardless of whether you have a 25k limit or a 500 dollar limit on a card. Its more important to focus on getting money and accumulating wealth THEN paying everybody. 

Just my 2 cents.

---

The purpose of BK7 is to do EXACTLY what you describe, without the risk of creditors pursuing you in court, getting judgements, wage garnishments and asset seizures. Its not too difficult to emerge from BK7 in 24 months with 700-725 scores. They won't get much higher than that until the BK is gone but 700's are a dream for many of us.

Also in your last paragraph you seem to equate "Credit" with "Debt". Its very possible to have plenty of credit without having a lot of debt - and vice versa.

While I would say you are technically correct, credit is not real wealth - but having good credit reduces your "opportunity cost", and can make building real wealth easier.

---

I stated that you have to pay back your credit limit. I never made the statement that credit equates to debt, though not paying it back certainly does. I think you infered from your own perspective. It might be a general sentiment that often people can get into credit troubles from simply having too much of it and being careless.

The opportunity costs allowed by credit are tremendously helpful there is absolutely no doubt about that . Its more important to focus on wealth and money first if you find yourself in a position where you are indebted by your credit. The reality of credit is this though, you are essentially selling your tomorrow TODAY. Take a conventional 30 year fixed mortage at 3.5 percent for a 300k home. If you finance this purchase as many people will, after 30 years you have paid over 600k to the bank for the home you purchased today. I mean I dont think anyone can really argue the fact that cash is king and opportunities from having a stockpile of it are better than credit ALONE, but thats why the rich are rich. More money begets more money in almost all aspects of life including credit. They dont hand out high credit limits to people who have low income.