So It Begins.... Rebuilding my Credit

[iham32]

Hello Ladies and Gentlemen,

This thread is in hopes of rebuilding my lackluster credit score and eliminating my debt. With all of your knowledge and experience, I know I have come to the right place for some great advice. I have been reading threads for a few weeks, yet I understand that every situation is different so I decided create my own. To all of you who help, please know how sincerely I appreciate it. Let me begin....

My Debt:

Chase CC = $4,227...... Listed as charged off/closed on credit report. The debt is now under collections from Midland Funding LLC.

Capitol One CC = $3,727....... Listed as charged off/closed on credit report. My credit report does not show this as being under collection, however there is a local law firm who has filed a lawsuit against me in order to collect.  The complaint has been filed and they are currently in the process of attempting to serve me. I have a letter from the law firm claiming they sent a debt validation letter, however since I have been avoiding this problem for a while I can not find it nor do I remember it.   

Both have been delinquent since 2009, and are scheduled to come off in 2016.

My Scores:

Transunion =   573 via creditkarma

Experian =  655 via creditsesame     

Current Situation :

I do have enough saved up to pay off both debts if I am allowed to pay a reduced amount. I have read that getting these negative marks off of my credit report would be the first step to take to rebuilding. I would prefer to make one lump sum payment if that would save me money. I am assuming that it is far too late to deal with the CC companies themselves and am now forced to deal with both collectors. My plan is to take care of what I owe first and then to create some positive marks on my report via secured CC.

????  

Should I send a debt validation letter to Midland Funding? What would that achieve?

What are my chances of getting a reduced payment for the debt currently in court? I can only assume they would be able to validate my debt. Would they accept an PFD?

Should I pay off first the debt considered in "Collections(midland)" or the debt in court (it is scary)?

Basically what would you do if you were me.

All of this is very unfamiliar to me, and if there is anything else I could provide I will be happy to do so. Once again any help is greatly appreciated.

[themizlyne]

I would take care of the one filing the lawsuit first and as quickly as possible. Then after either settling or PIF (might have to), save up more and offer PFD to other one.

[traveler2005]

I would call the lawyer for capital one and agree to pay in full to avoid law suit and judgement on your report. Judgements are public records that stay on your credit report for 7 years. Trust me they are difficult to remove, I have 2 of them on my report, and they will tank your scores and prevent you from getting cards from chase and discover in the next 7 years. You can set up a payment plan with midland, do not give them your bank account info, or debit card number, go and get a walmart debit card, load with just enought funds each month to make your payment until you are paid up. Midland is not known to do very many PIF for deletes, and they will also stay on your report for a long time. 7 years from DOFD.  

Best wishes to you. Its a long road ahead, but the rainbow at the end is worth it.

[choppa02]

I would go after a couple secured cards as soon as possible to get something positive showing

[mebell]

I agree, with everyone. Try to take care of the pending lawsuite first. Also, as Choppa said, you would be able to get a secured CC now and start gaining good credit history for payments. There are many available out there that you will qualify for and be able to get with not much money to put down. Some want a dollar for dollar amount. I was able to get one for $50 down with a $200 limit. The positive reporting from that secured card has enabled me to get 2 other cards as I am taking care of the negatives on my reports. Hope all this info helps and good luck!

[iham32]

Thanks for the replies.

I do have a friend who is an attorney who will help me deal with the pending lawsuit. As suggested I will work upon settling that asap in hopes of avoiding a judgement.

I will update soon.