Cocotel, my heart goes out to you. After the birth of our disabled child, who needed blood transfusions at birth and an extensive open heart surgery at two months of age, it was impossible for me to return to work. The next four years were spent in hospitals, doctor's offices, therapies and on my knees, as the bills went way past due -- some into collections, others into charge off. We were nearly foreclosed upon half a dozen times, and sometimes had to decide between groceries and electricity. Our A+ credit took a dive bomb, to say the least, and it was doubtful that we'd be able to borrow a hair from a llama.
Credit counselling wasn't an option, for us either, as they wanted more than we could commit to, being self employed and on a fluxuating income, expecially during the last few hurricane seasons. When two hurricanes , in one year, did a number on our roof, we had no choice but to seek out subprime lenders who were willing to refinance our home in spite of our recent, past history. I was so afraid of the terms adjustable rate (two year term) and prepayment penalty -- three year, and what sense does that make? -- but for that, we'd have lost everything. My greatest fear was the possibility of not being able to improve the credit well enough to refinance at a fixed rate before the interest adjusted at the end of the two year period. The trick was, of course, refinancing in spite of the subprime status of the lender, and not adding to the debt once the bills were paid off with the refinance, and focusing on repairing our credit, so that when the time came we'd be able to refi at a fixed rate, which is what we were able to do, though we had to eat the prepayment penalty.
It seems a small price to have paid, now, for all of the debt we were able to resolve and not have to sell, or worse, be re-poed out of our home. Some might well disagree that this was the best course of action, but our options were next to nil, things being as they were. Even with the worst case scenarios, the collections and charge offs, all having been paid in full, we were able to recover within those two years. I might add that a subprime credit card offer from First Premier helped re-establish us, too, so I don't spit at all of the fees involved. FP was good about reporting and I could always afford a ten dollar payment.
Of course I don't know what your possibilities are. I do know that my son and his wife got themselves into a whole lot of credit card debt, as a young couple just starting out and having to have it all, so to speak, and after three years with a credit counselling service (United Way I think) they were getting no where, as the payments made toward their debts were so small they'd barely put a dent in their balances, though their credit scores did go up due to on time payments, just not fast enough. My son took matters into his own hands and cancelled the credit counselling which was, on average, sending $20-25 a month to each of the creditors, against ten thousand dollars worth of debt! He offered them all $40, in writing and enclosed checks to each, all of whom accepted his offer to include Rooms To Go, Capital One, Providian, Target, Sears, etc., etc. In less than three year's time his credit scores have gone from the 400s to the mid 700s, across the board, and they've learned a rather valuable lesson, wouldn't you say?
I hope I have offered you some sort of hope, and perhaps an idea or two on how you might recover from all of this. Keep us all posted, okay?
Mercy
