topic Re: Fixing this mess quickly in Rebuilding Your Credit

Fixing this mess quickly

Anonymous — Tue, 19 May 2015 08:53:23 GMT

I desperately need help. Through my own fault, I've messed up me and my husband's credit terribly. We want to move in a few months, but I know that no one will rent to us with our credit in this shape. I want to begin with my husband's credit since he is the breadwinner, then work on mine. Our goal is to be able to sell our house and move in 3-6 months.

The biggest problem is that we have a mortgage that has 'rolling 30s' for the past 16 payments. We just cannot seem to get enough money to make the extra payment to get caught up. Essentially, we make the previous month's payment each month, so we are always a month behind.

We have a combined student loan of $79k that has been deferred/in forebearance for a long time due to inability to pay the monthly payment, or because one of us was in school. Right now, it has come due again, and it's 2 months past due.

Judgment for $3777 filed in 7/2014.

12 open accounts, 12 closed accounts.

5 collections, 15 accounts derogatory.

His TU Fico score is 594.

Thanks in advance for any advice.

Re: Fixing this mess quickly

Momof5 — Tue, 19 May 2015 14:32:24 GMT

My advice:

FWIW....Have a garage sale. Sell whatever you have of decent value, up to and including any and all TVs, video game consoles, etc. Cancel cable TV. Change cell phone and service to be 'phone' only - no data. Get a second job. Get enough to get that mortgage current.

Did you attempt to get the IBR program? If your income is low enough, you may qualify for a much lower payment that you can afford.

What are the specifics on the CAs? CA, OC, amt due, DOFD, etc.....

Re: Fixing this mess quickly

tiger_uppercut — Tue, 19 May 2015 20:09:49 GMT

@Anonymous wrote:
I desperately need help. Through my own fault, I've messed up me and my husband's credit terribly. We want to move in a few months, but I know that no one will rent to us with our credit in this shape. I want to begin with my husband's credit since he is the breadwinner, then work on mine. Our goal is to be able to sell our house and move in 3-6 months.

The biggest problem is that we have a mortgage that has 'rolling 30s' for the past 16 payments. We just cannot seem to get enough money to make the extra payment to get caught up. Essentially, we make the previous month's payment each month, so we are always a month behind.

We have a combined student loan of $79k that has been deferred/in forebearance for a long time due to inability to pay the monthly payment, or because one of us was in school. Right now, it has come due again, and it's 2 months past due.

Judgment for $3777 filed in 7/2014.
12 open accounts, 12 closed accounts.
5 collections, 15 accounts derogatory.

His TU Fico score is 594.

Thanks in advance for any advice.

It sounds like you're operating at a deficit monthly - that's not something that can be fixed without more income and/or significantly reducing your monthly living expenses. Especially if you're in any kind of rush (nearly a contradiction when it comes to credit repair). What is your employment situation, and your husbands?

Additionally, is there anywhere you can cut your bills? Use a cheaper cell phone service, cut cable, etc etc.?

Re: Fixing this mess quickly

Anonymous — Wed, 20 May 2015 03:17:40 GMT

If we were to just pay bills every month, our income would be sufficient, however we have a lot of child-related expenses that are only going to go up as the years go on. It's actually embarrassing because my husband has a decent salary. We've always been really bad at managing money, unfortunately.

One of the reasons why we are moving is the high cost of living, and the plan to lower bills by moving to a lower COL area.

We cut cable years ago, got rid of landlines and have no car payment, thankfully. I have gotten so used to checking email on my phone, that I use it for my part-time job, too. It would be a hard habit to break but I'm going to look into it.

Re: Fixing this mess quickly

tiger_uppercut — Wed, 20 May 2015 03:33:17 GMT

@Anonymous wrote:
If we were to just pay bills every month, our income would be sufficient, however we have a lot of child-related expenses that are only going to go up as the years go on. It's actually embarrassing because my husband has a decent salary. We've always been really bad at managing money, unfortunately.

One of the reasons why we are moving is the high cost of living, and the plan to lower bills by moving to a lower COL area.

We cut cable years ago, got rid of landlines and have no car payment, thankfully. I have gotten so used to checking email on my phone, that I use it for my part-time job, too. It would be a hard habit to break but I'm going to look into it.

Internet is actually one of the ones you keep - you need it for job hunting, bill paying, etc.

I think you should do a new budget and include the child-related expenses (even if they're estimates) so you're covered. Would you still have enough to cover everything if you counted these expenses? In the short term, you need money to catch up. That means someone has to pull in more income. I got a 2nd and 3rd job when I was tackling debt. It sucks, but credit repair is slow even if you have money to throw at it. It's considerably slower if you don't. Does everyone who can work in the household have a job? Right now you have to stop the bleeding and get your bills caught up. You can do it.

Re: Fixing this mess quickly

Anonymous — Wed, 20 May 2015 08:11:30 GMT

Thank you for the advice. It's really appreciated.

I recently got a job and am working as many hours as I can. Plans to sell off the few things we can sell are in the works.

We want to catch this mortgage up, but it's truly difficult to do right now. I'm not borrowing money from family to do, that'll put us in a worse position than what we are now, which is adding to the pile of owing someone. We started paying a few of the CAs, do we stop paying them for a month to catch up?

My biggest fear right now with moving is that we sell our house and get the huge stressor of being behind is alleviated, but then we can't find a new place to live because of the wrecked credit. I haven't rented in many years and am guessing that if one place denied us, then all of them will deny us.

Re: Fixing this mess quickly

Anonymous — Wed, 20 May 2015 09:23:37 GMT

Yes, stop paying the CAs for a month. They are already there, new lates on the mortgage keep adding fuel to the fire. At the very least get that back to even so the lates start to age. If you sell the house are you going to get any cash out? If so, dont worry about the rentals not working. If you have even a bit of cash coming out of the house when sold, most landlords will work eith you if you can offer even an extra month of security.

Re: Fixing this mess quickly

Anonymous — Wed, 20 May 2015 10:39:39 GMT

Screwedup, I just want to commend you for your approach. Your not blaming anybody else, your family, your job, the Govt, etc... It's so refreshing to hear someone accept responsibility, and not "lay down" or look to cast blame on others for your situation. If I was a landlord and you came to me with this approach, I'd bend over backwards to try and help you. You sound extremely sincere and honest in your attempt to get yourself out of this mess. Please continue to post here and keep us updated. I'm pulling for you and believe you can be one of the success stories. I wish you the best.

Re: Fixing this mess quickly

superdad — Wed, 20 May 2015 10:44:27 GMT

Good advice from everyone, there are plenty of landlords, apartments that will take you, you'll have to search but they are out there. Loose the cell phones and go with pay by the month, sell what ever you can live with out "will make moving easier" less stuff. I would get enough saved up that you can pay 2-3 months of morgage. You'll still need money for security and first months rent and some places want first and last months rent. Sounds like to me that if you have done all that and still behind you might have to walk away from the house. If you want to give more details on your bills, list of baddies on your CR and income that might give people a better idea where to help.

Where all here to help so dont be embarressed. We have all been there and a lot of us are still there.

I work 2 full time jobs to help get me out of my mess. I work from 6:30am-2:30pm then go to my other FT job and work 3pm-11:00pm. I get 4-5 hours of sleep, thank God for weekends "sleep" LOL people do what they have to do.

Re: Fixing this mess quickly

Anonymous — Wed, 20 May 2015 10:54:02 GMT

Thank you, drewg350. That means a lot.

Re: Fixing this mess quickly

Anonymous — Wed, 20 May 2015 11:14:55 GMT

One other suggestion, I use ting for my phone service. It saves me an absurd amount of money over what i was paying with tmobile before that. My phone over the last YEAR has cost me less than 400 bucks. Its a postpaid pay for what you actually use. If you are on wifi for data most places you spend time, I would almost certainly guarantee it will save anybody a significant sum. On the flip side if you use gobs of data maybe not. They have a savings calc on their website. You pay for your own phone (or BYOD) on either tmo or sprint networks. And if you ever actually need to talk to them, they are just as if not more friendly and helpful than the people at discover. not that a few bucks on phones is gonna save a house, but pennies turn into dollars, dollars turn into hundreds. That might be the title of my memoir. Pennies Turn into Dollars, Dollars Turn into Hundreds, memoir of a cheapass by pfarro1.

Re: Fixing this mess quickly

Anonymous — Thu, 28 May 2015 11:41:14 GMT

I don't have much to update, unfortunately. I talked to my cell phone carrier and got the bill lowered considerably. My husband and I keep knocking around the idea of getting cheaper cell phones, but I don't really see how much that will save us. I have a Galaxy S4 that is still being paid off through TMobile. If I trade in for a new phone, I'll still have to pay the new phone off vs. paying off my current phone in 6 months and using it until it dies. Does that makes sense?

We plan to catch up on the mortgage in June by making 2 payments in a month and really, really having a tight month, only paying for groceries and utilities. July won't be pretty when we try to catch up on the unpaid June bills, but I guess that's the price we have to pay.

To be honest, it's depressing. I have no time to pack and clean up my house to get it ready to sell and it's got me down. I feel stuck with bad credit, a crappy house in a place where I no longer want to live. It stinks.

Re: Fixing this mess quickly

Momof5 — Thu, 28 May 2015 14:06:29 GMT

As the old saying goes, "This too shall pass". I know it's tough. I lost my job and was out of work for months. By the time I found a job I was 5 mo late on my mtg and had a spattering of lates on all my CCs and 2 on my car note. It took a YEAR of no extras. I didn't get my hair cut (it was at mid back level and now down to my waist...but I like it like that), no makeup, no manicures, no lotions or potions... I purchased my new work clothes at Goodwill! (They actually have some pretty nice stuff!) I milked the HAMP program (applied, denied, reapplied, denied, reapplied) until the mortgage was brought current.

By that point my scores were in the 470s. That was 12/2013. As you can see, I have rebounded quite nicely. During the past year I have focused on getting my util down (99% to 17% so far). I went on an app spree and obtained an additional $45K in avail credit. My final car payment occured in the meantime so my spare $ is definitely up!

I wont sugar coat it. It wasn't easy and it was depressing at times. But good choices and hard work pays off! Keep your chin up, you will get there!

Re: Fixing this mess quickly

Anonymous — Thu, 28 May 2015 14:09:31 GMT

Thanks, Momof5.

Re: Fixing this mess quickly

Anonymous — Thu, 28 May 2015 14:50:13 GMT

Hi, Screwedupbadly.

I don't know where you live, but there are always places to rent, in good areas, with sub-par credit. Usually, I find that some places are willing to supplement a lacking credit rating with actual money, i.e., they will want to know your income from wages and a LOT of other personal tidbits, but you'll manage. Since you and your husband are working, be prepared to walk into a leasing office with proof of employment and at least 2 or 3 months of check stubs to show your cash flow. Of course, I am basing my assessment on where I live, which is Chicago, but if you're trying to move into an area with a lower cost of living, USUALLY there are those that more likely don't have the means to move to a higher cost of living area and manage, and the landlords know this and tend to stress credit less and immediate cash flow more.

But, all in all, I wish you luck in your apartment hunting and credit rebuilding efforts.

Re: Fixing this mess quickly

Anonymous — Sat, 29 Aug 2015 01:15:13 GMT

I would say the first this you must do is put first things first. You know that you have not been responsible in the past and both of you have messed up your finances and credit. Facing the facts and being honest with yourself is a first step on the road to recovery. You have to know exactly where you are and how you got there so you won't do it again.

Anyone can make a mistake or be irresponsible. but there comes a day when we all grow up, accept responsibility for past mistakes - follish misdeeds and frivilous behavior.

If you're ready to start anew and change your future, then you're in the right spot.

First things first means sitting down as a couple and accepting where you are and knowing that together you two can turn this around. Nothing is hopeless forever.

Get a pencial and paper and write out a monthly budget. What are your expenses (fixed and variable) and income? What can you cut? What is essential? Can you generate new income streams?

Do this and then come back here and give us some real numbers to work with. Facing your fears is an essential beginning point and it frees you to move to the next step.

Re: Fixing this mess quickly

Anonymous — Sat, 29 Aug 2015 01:46:13 GMT

Also, read everything you can on here about goodwills and having old baddies removed. It won't make you current on your mortgage, but if you could get even one or two of your old baddies removed, you could see a bump in your score and that could help in getting a place to rent. Even removing one late payment from your record can make a huge difference. You can't really create $$$ you don't have from thin air, but following the advice on this forum and working on your file can be the next best thing. Hang in there -- you can do this!!