topic Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds in Rebuilding Your Credit

Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

slund5499 — Tue, 24 May 2022 04:15:14 GMT

I am in the garden as of May 2022. This is my 2nd rebuilding in 15 years. Total current reported accounts = 78,Collection = 19Utilization 83%

Of the 78 accounts reporting.....24 are closed (CL=26K, Bal=0) reporting positive, 22 are C/O (CL= 25.4K, Bal=23.6K)

Current Portfolio - Active Accounts 12 (CL $11K) , AU (2), Inqui (4)

Fingerhut (2200) Bal = 0 - closed by creditor to open Feti account

Apire (700) Bal = 582 - paid off and not fico updated

Kickiff Lending (120) Bal= 90 updated

ChimeFn (500) Bal = 13 - updated

Kickoff Lending (500) Bal = 0 updated

Merrick (2000) Bal = 1648 - paid off and not fico updated

Fortiva (500) Bal = 326 - paid off and not fico updated

Credit One (950) Bal = 560 - paid off and not fico updated

Credit One (500) Bal = 364 (AU) - current and updated

Celtic Bank (1400) Bal = 847 - paid off and not fico updated

Feti Fingerhut (2200) Bal = 428 (replaces original account) -current and updated

Mission Lane (500) Bal -128 - paid off and closed not fico updated

Fortiva (500) Bal = 208 paid off and not fico updated

Credit One (550) Bal = 377 paid off and not fico updated

Credit One (600) Bal = 383 (AU) current and updated

First Premier (1300) Bal = 528 paid off and not fico updated

First Premier (650) Bal = 6 paid off and fico updated

Collections and charge off's depressing score accross the board but drowning experian fiercely.

Recent loan from LendingClub to perform purple item payoff with 3 year term.

DoFD for red accounts is 1st quarter of 2016....look to drop by 3rd quarter of 2023. remain negative until 2026.

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

FireMedic1 — Tue, 24 May 2022 10:00:40 GMT

Whoa. Dont know where to begin. So you took a loan to pay all the open revolving accounts? Good. Any of those that have a fee. Shut them down. Dont take this the wrong way. You have 22 accounts as CO'ed totaling 23k? But then opened 17 more? No need for that many accounts seeing that you repeated the same route by grabbing all these accounts just to have credit. Close down all the accounts and leave yourself with say 5 that give cash back or some other perk. Make it 3. Why? This will stop from this situation repeating itself again. Work on all those CO's not knowing who the creditor is. Anyone of those could go legal. You have to gain control of credit. Do not charge anything else and carry balances. Use whichever card as a debit card. Charge it for perks, then pay it. You have to break the vicous cycle now or you'll be right back where you were again. Sorry but it had to be said. Got your work cut out for yourself for the next couple years. Best of luck.

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

slund5499 — Wed, 25 May 2022 01:47:10 GMT

Firemedic,

I appreciate the candid response. I already know that the cycle to re-ignite.I took out the loan to pay down all my current accounts so I can beginfocusing on the rebuild. I know every charged off account and the balances owed (where the account is reporting negatively). The charged off accounts that are reporting a zero balance have sold those accounts to a buyer to collect anything they can get or settle the account. I, also, know which original creditors still retain account ownership. Those are the accounts that were closed and charged off and still report a high balance.

I have plans to close nearly all the accounts I just paid down and have started to do so, but I am concerned that closing many or all too fast will tank my scores even further.

There was a plan to begin negotiating to settle as many accounts as possible with my disposible income left over. However, that changed when I got the tax levy that will take 25% of my check over the next 15 months.

I am now trying to decide where to start. the biggest impact holding my scores down is the utilization reported which includes the OC and CO that are reporting high balances. The high balances are OC like, discover, barclays, capital one, key bank, Wells fargo. The CO accounts reporting highbalances are from Commenity and synchrony banks. Everythingelse is closed with zero balances and reporting positive. Some of the positive account credit lines are $2K to $4.5K (which are probably keeping my score from sinkingany further).

To be frank. My score were closer to 515 across the board over the last 5 years until I started rebuilding with predetory accounts. So far all muy current accounts that have been paid down with the loan (except Feti Fingerhut...which I am paying off monthly to keep activity moving). The results of the paydown effects and those that have reported the decrease in balances so far have seen a +7 on TU, +4 on EQ and +0 on EX.

Attempting to find the best way to handle the CO which will still probably report for 7-10 after DoFD (even if settled).

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

tnhomestead — Wed, 25 May 2022 01:58:23 GMT

I wouldn't early about tanking your scores. They already sunk. Close accounts, that way they don't get used again. Accidents happen!

Then just start chugging away. I would do the accounts that PFD first, and then go from there.

Any CO will fall off in 7 years, hopefully a bit less. The tax lien is a killer, I stayed broke for 10 years and missed one I couldn't have paid no matter what.

Finances before fico. Get some savings built up, even 500 or 1000 in cash instead of needing a credit card. Then build up cash and start offering to pay, if they won't settle go to the next one. But keep some cash on hand for emergencies, fate loves to kick someone when they are down.

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

FireMedic1 — Wed, 25 May 2022 08:30:43 GMT

If you've been around these parts lurking or as a member you know what we say. Finances over FICO. Scores can wait. As the debts get lower and things fall off. Then scores will follow and start to increase. Closing accounts dont change scores. They are still counted as open accounts for up to 10yrs. I'm almost tempted to say you may want to have a fresh start and live off cash for a while. I never say yes file BK. But your in a deep mess. Never seen a situation come up like this since I've been here that I can remember. Something to think about. Seriously think about. I got all my back taxes wiped clean from a failed business and other factors after they chased me for 14 years. They got the wage garnishment and I file before it kicked in. You dont want to know what the penalties and interest was. So I wish you the best and good to see you admit there is/was a credit problem. Kinda funny after a BK your mindset changes to be more responsible.

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

slund5499 — Thu, 26 May 2022 02:14:47 GMT

Fire medic,

At this point, I do not thinka BK would help.My current income is a BK killer and theTax levy is a penalty that I have to deal with for 14 months. In the meantime. I pulled my annualcredit report.com version and discovered that the OC still reporting balances because they still own the accounts will all fall off between Aug 2023 and Nov 2023. This accounts for 9 OC accounts totalling around $21K and about 30% of the high utilization figure.

If the charge offs due start falling off after 7 years thenthey shouldbegin to fall off around thesame time as the OC accounts. Now I make strides for repair by calling on the charge offs and making payment arrangements to PIF and these accounts range from $150 to $1200. That leaves the collection accounts deal with which is 19 accounts totalling around $18K.

I certainly hate the thought of BK and realize you can't file again for 7 years. However, I know my dad files BK 5 time in 40 years and just kept gettingback into the same situation over and over again.

If I can better learn from the experience, then BK is not an option and I should probably move forward with the charge off scenario and work with the collection agencies for a settlement. I still get some settlement offers with a 5%-10% deduction by accepting their propsed settlement offer. I believe these proposals are from MCM. Jefferson Capital os starting to move out of the 40%-50% and going toward 65% and 70%to settle. Calvary is still staying strong at 20% off balance.

Sleeping on it hopeing a light bulb will come on and find the end of the tunnel.

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

slund5499 — Wed, 01 Jun 2022 02:14:24 GMT

In hindsight….I could of, and probably should of, filed Ch 7 Bankruptcy while I was in the middle of school and my wife was working. Would been a good catalyst of support for the trustees. Wife working minimum wage job, myself a stay-at-home dad going to school and not working…. lesson learned. I, also, remember discussing with my wife and we agreed at the time that bankruptcy would have been worse for us until I graduated and got a new job. How little did we think to visit the FICO forum and discuss as we list touch until recently in relying on community member experience. Could of wiped out the taxes owed and prevented the levy and garnishment

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

jrwa81 — Wed, 01 Jun 2022 16:07:07 GMT

Yikes. Yeah, you've got quite a big mess on your hands and it's probably going to take a few years to make a good dent in it. I've honestly never seen anything like this before. You have nearly 80 accounts with 19 of them being collections and 22 charged off. That is WAY too many. To add insult to injury, you also have a tax levy. Frankly, your situation is totally out of control. I agree with what others have said in that you should close down as many of these accounts as possible and live strictly on cash for the next 2-3 years or so. No more credit cards and no more loans. Don't even apply for any new credit. Try to cut back your expenses in any way that you possibly can. No dining out, no Starbucks, no expensive cable packages or streaming services, no vacations, etc. First, start with the collections. Find out which ones will settle for deletion and begin chipping away at those, but ONLY do what you can afford. Don't overwhelm yourself with settlements that you can't actually pay. You basically get one shot with these CA's. If they offer you a settlement and you fail to pay it, they're very unlikely to offer you another one. You're going to have to do this slowly over an extended period of time.

As far as the charge-offs, you're just going to have to let those run their course until they eventually age off your reports, which is usually within 6-7 years of DOFD. It's almost impossible to get those removed early. You can pay them off and the amount owed will zero out on your credit reports, but in your current situation, that shouldn't even be something you're thinking about. You have much more pressing issues to deal with. You're in a very bad situation and you absolutely must get your finances in order before you can even begin to tackle your credit problems. Otherwise, you're going to be in an even worse situation. Best of luck.

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

gdale6 — Mon, 06 Jun 2022 16:12:18 GMT

If you can keep 3 of the older accounts open that would be good for your AoAA down the line.

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

slund5499 — Tue, 07 Jun 2022 03:41:05 GMT

I appreaite the advise and recommendations. I have, for the most part, decided to tackle the collections first. I brought in CS360 to begin working on the collection accounts. Additionally, we hired Optima Tax Services to help fight the tax levy balances and try to negotiate an offer in compromise over a 5 year period under a settlement after abatement, write down of interest, removal of any penaltiesavailable. The goal is to first, rescind the tax levy in order to settle for an offer in compromise. We see how this goes in time. Lastly, I brought in Resolve to help negotiate settlement offers in collection accounts they know will settle for 35% of the balance owed. Settle for monthly payments of $10-$25 a month for 12-24 months and agree to instruct the CB to removederogatory account upon receipt of final payment (no prepayment penalty). Can pay off early and get activity on account removal faster. Got 2 settlement offers from PRA for $10 a month each and a settlement agreemwent of 65% of balance owed.

Notmessingwith OC accounts as they all drop off between Feb - Nov 2023. Charge off's start dropping off on Nov 2023 - Feb 2024 (based onmyannualcreditreport.com).

Waiting to see how everything starts to pan out before doing anything else. I read on my Wallethut (improve your score recommendation) the following:

Improve Your Credit Score by 139 Points

Paying off some of your collections accounts can help you reach a credit score of 697.

WalletHub considered a number of options for how you can improve your credit score. We discovered that you can reach a credit score of 697 in 25 months by paying off the following 9 collections accounts and responsibly managing all your financial obligations.

WalletHub's estimate assumes that you can make a $155 monthly payment toward these accounts.

NowIn 25 Months*

558

697

COLLECTION AGENCY

REPAYMENT RECOMMENDATION

JEFFCAPSYS

Try to negotiate your current balance of $331 down to $280 with a 25-months repayment term.

PORTFOLIO RC

Try to negotiate your current balance of $406 down to $350 with a 25-months repayment term.

PORTFOLIO RC

Try to negotiate your current balance of $431 down to $370 with a 25-months repayment term.

PORTFOLIO RC

Try to negotiate your current balance of $467 down to $400 with a 25-months repayment term.

MIDLAND FUND

Try to negotiate your current balance of $467 down to $400 with a 25-months repayment term.

MIDLAND FUND

Try to negotiate your current balance of $546 down to $470 with a 25-months repayment term.

PORTFOLIO RC

Try to negotiate your current balance of $571 down to $490 with a 25-months repayment term.

PORTFOLIO RC

Try to negotiate your current balance of $570 down to $490 with a 25-months repayment term.

MIDLAND FUND

Try to negotiate your current balance of $618 down to $530 with a 25-months repayment term.

Your Proposed Plan

Confirm that the information related to the above collections accounts is accurate. If not, dispute them directly with TransUnion®.
Ensure that you can comfortably afford $155 in monthly payments towards your collections accounts.

I seriously doubt a 139 point gain is possible under their scenario, but well work at it through Resolve and see how things work out.

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

Chazzay12 — Tue, 07 Jun 2022 23:45:15 GMT

The members of the forums have given you great advice.
I think the biggest thing I'm reflecting on what people are saying are FINANCES over Fico. You've got to get an emergency fund. I wouldn't even worry about paying anybody until you get your finances back in order. It seems a mess. I don't fully understand a tax levy so I can't speak on that.

I have paid several collections, and let me tell you, you would Not want to be stuck paying each person 25$ a month or so for 25 months. That's two years. Why not instead save up money, and AFTER you get an emergency fund and have another spare couple hundred, then call them and pay off one at a time? Just a thought but now on top of your crazy number of accounts you have to pay monthly, now you're also paying the collections all monthly. It just seems like a lot.

I've never gone through BK and can't speak on it, nor would I recommend, however, I would HIGHLY suggest talking to some sort of credit counselor/bk attorney to try and find some options. Are the company's currently helping free? If not a lot of lawyers/credit counselors do a free consultation.. Idk, just my thoughts.

Best of luck.

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

slund5499 — Sun, 19 Jun 2022 20:25:57 GMT

Well this is an update to my situation and progress.....

We did retain Optima Tax to help fight the tax levy and get a payment plan setup and are currently waitingto see what they say and want to charge. Reviews across the web are well mixed. In general, the majority have posted negative reviews regarding cost, actual performance and lack of follow through with most posters red flagging their good reviews as paid reviews.In my case, their investigation is still in process after 3 weeks and no updates yet. Not confident at all.

Firtunately, I did make contact with the right department servicing my account, after 3 days or call backs. I spoke to the agent, explained what I was up against and asked to rescind the tax levy in lieu of an installment agreement. That went no where. I was offered a reduction in the monthly levy amount to help with future obligations and reduce the struggle the tax levy was causing. CA FTB reduced the tax levy from 25% down to 12%. Progress in the right direction for setting up my emergency fund in exchange for an extended garnishment period. The CA FTB will accept an offer in compromise with a lump sum payment offer if they feel it is in the best interest of the state. I, also, found out that a tax resolution business I hired 10 years ago to file my taxes and try to get an offer in compromise....never submitted my tax returns. If I can locate those copies and file 2005, 2006, 2007, 2008 and 2009.....the CA FTB will accept them and may reduce penalties if I claim my dependents. Well, these tax yeares were after my divorce and my ex-file (who has since passed) was not working and may not have file returns. Although I believe her sister claimed the dependents and works at the IRS.

Still in the garden. Have 5 PRA (Portfolio Recovery Associates) collection accounts on a $10 monthly payment plan under a 70% settlement reduction of balances owed. These account settlements were appliedfor before the tax levy hit. I am able to budget them in under current circumstances before the tax levy reduction. With the tax levy reduction, I can put $600 away a month for emergency funds.

After closing 2 of my accounts, the impact was a drop of -5 points on EQ, --3 points on TU and 2 poins on EX. As of today, EX is only score that has not recovered or reverted back.

Current scoring: EQ 590 (+12) TU 632 (+19) EX 565 (-2) (Utilization still high due to collection balances reporting but over all has dropped from 88% down to 69%. I think the utilization drop was a result of paying off all my accounts, closing 2 current accounts and keeping my BofA in use for monthy gas purchases.)

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

Chazzay12 — Sun, 19 Jun 2022 20:57:57 GMT

Sounds like you have made some progress.. good to hear.

Have you talked with any sort of BK attorney at all? Or are you desperately trying to avoid that

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

slund5499 — Sun, 19 Jun 2022 23:44:17 GMT

Have not spoken to a BK attorney. Based on reports from myannualcredit report.com, The OC accounts, will all have dropped by September of 2023. The CO accounts will finish dropping in Feb of 2024. I believe my loan for credit card consolidation will be paid off in Jan 2024. I should be able to get an offer in compromise for the tax lexy if I can do a lump sum payment between $8K-$10K.

Frankly, I look to see score rising above 750 once the charge offs and OC accounts drop off. A BK now would save money but will still keep me from buying a house for at least 3-4 years after being granted.

I am still leaving this option open for the time being. My parents filed BK 5 times in 38 years. I am not doing a repeat.

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

Chazzay12 — Mon, 20 Jun 2022 00:30:34 GMT

Oh okay. It just sounds like so much. I'm sorry to hear you are dealing with all of this and I hope you have learned your lesson and don't make the same mistakes in the future.

especially with having so many accounts open. Remember just 3 revolvers and an installment is all you need. Having too many accounts is a handful and hard to deal with IMO. I think you also get hit with a point deduction after so many accounts for "too many open revolvers" but not 100% sure. I think I read that in an in-depth post on scorecards.

I think too you are able to get an FHA loan 2 years post BK. But either way, sounds like you are paying your debts.

Best of luck!

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds

7774x — Wed, 22 Jun 2022 19:53:56 GMT

@slund5499 wrote:
Have not spoken to a BK attorney. Based on reports from myannualcredit report.com, The OC accounts, will all have dropped by September of 2023. The CO accounts will finish dropping in Feb of 2024. I believe my loan for credit card consolidation will be paid off in Jan 2024. I should be able to get an offer in compromise for the tax lexy if I can do a lump sum payment between $8K-$10K.
Frankly, I look to see score rising above 750 once the charge offs and OC accounts drop off. A BK now would save money but will still keep me from buying a house for at least 3-4 years after being granted.
I am still leaving this option open for the time being. My parents filed BK 5 times in 38 years. I am not doing a repeat.

Best Wishes

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds - update 7/7

slund5499 — Fri, 08 Jul 2022 02:30:11 GMT

Dear Community,

As if this post, I am still in the garden. Current fico 9 scores = EQ 591 +1, TU 633 +13, EX 565 +0.

I have settled with 5 PRA accounts through Resilve as follows:

US Bank - $570 owed, settlement for $199 ($10/mo. payments) - discount of 65%

Capital One - $571 owed, settlement for $199 ($10/mo. payments) - discount of 65%

Buckle - $406 owed, settlement for $142 ($10/mo. payments) - discount of 65% - Account deleted from TU 7/6

NY & Co - $431 owed settlement for $150 ($10/MO. payments) - discount of 65% - Account deleted from TU 7/6

J.C. Penny - $467 owed settlement for $163 ($10/mo. payments) - discount of 65%

CS360 activity:

Collections pending dispute process - 8

Under review - 3

Pending dispute process - 7

Deleted - 2 (accounts deleted from TU report, have not been disputed yet by CS360, but have a setttlement offer with 2 payments made on each accpunt with PRA.

I found this strange to see on the CS360 updated email I got today. I think PRA has ask TU to delete this account and wonder if I should wait to see it the account gets deleted from all 3 reports or continue making monthly payment until the deletion occurs on all 3 then cancel the payment arrangement.

Can a collection agency request to delete an account and then try re-inserting it on the credit report after deletion?

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds - update 7/7

GMCTexas — Sat, 09 Jul 2022 01:01:36 GMT

I'm certainly not one to give advice as I've had my fair share of credit issues in the past with regards to credit cards, running up balances I couldn't pay, charge offs, etc. I was looking at some of your other posts and in 1 you said you have a pre-tax income of $115k. Why are you making $10/mo payments on these settlements vs just knocking one or 2 or more out a month on 1 shot?

Re: Rebuilding for the 2nd time looking for advice on how to proceed with limited funds - update 7/7

mfinsmi1 — Fri, 15 Jul 2022 05:21:15 GMT

I think it is also important to note that once to do get a handle on your finances in a few years to stay away from all these subprime cards . If you consider opening up any new accounts after you handle all your debt in the way future , go the secured card route - otherwise the cycle is going to repeat. best of luck