Chargeoffs

[Anonymous]

Hi all,

A few years back I had some tough financial difficulty. My wife was ill and I lost my job. We almost lost everything. My mortgage was behind, my car payments everything. I was trying to make arrangements with all of my creditors because I knew my unemployment was running out and they all pretty much blew me off because I had a good payment history. But then the inevitable happened and my unemployment ran out and what little income my wife had we were spreading out to try to stay afloat. But the moral of the story is no one offered to help. I had to practically go into foreclosure to get a forebearance agreement to keep my home. Sorry to the boring backround.

By the time the dust settled all my credit cards went into collections and eventually were charged off because they were all so unreasonable with there terms, I truly wanted to mke good but they just wouldnt do anything that was manageable for us. I probably shuld have filed for BK but figured I wanted to do the right thing and now Im stuck with low 500 credit scores and my wife with high 400 scores. What in the world should I do to get back up to snuff? My mortgage has now been current the past 12 months, my previous car payment was on time for about six months and I just traded it in and got a new one, and I just got 2 small credit cards (not the predatory ones with the 280 fees and 300 limits)Is there anything I should do? Should I pay off those charged off accounts? Some say yes and some say no? I just want to restablish what I once had and dont know how to do it. You see all these credit repair scams but I want to do it legitimately, even though dong the right thing penalized me. Any advise or input would be greatly appreciated. Thank you in advance for your input!

[Boswd]

In the grand scheme of things, yes you should start settling your old credit card debts.  Even though by paying off in Full or settleling for less isn't going to increase your score you will get rid of the dark cloud that is hanging over your head.  Ignoring them doesn't make them go away and you could be setting yourself up for legal ramifications if they decided to sue for a judgment and if they get that then your credit scores will plunge even more let alone of the possibilities of them seizing your bank accounts, garnishing your wages and putting a lien on your house.   I would try to work something out with the collection agency to either settle or get into an afforadable payment plan.   Ignoring them will just open yourself up to much further headaces down the road. You have major assets and collection agencies will take that into account on whether or not they will proceed to sue.   Also if some of the CA's are reporting monthly then after you either settle or pay the dings will stop.     Sometimes to go forward you have to take a couple of steps backwards.   

[Anonymous]

I seen in another thread that maybe trying to settle debts by paying for a deletion. Is that a common practice?

I know paying off the bad debts will not only not increase my scores, but they will actually drop. Talking to collectors is like talking to the wall, they will tell you absolutely anything to get you to pay, that is why I wound up in this spot in the first place, no one listens, they just yes you to death and when you are in a bind you will almost try anything. I unfortunately got fed up and did nothing about it. My house was way more important than my credit cards and that how I prioritized.

[Anonymous]

"I seen in another thread that maybe trying to settle debts by paying for a deletion. Is that a common practice?" In the grand scheme of things a typical collection agency "customer" has very little if any clue of their rights, options, etc. So in that sense obviously this isn't a common practice. Of those that do take the time to study their options, surely it's a more frequently tried approach, but there really isn't any way to have a conclusive way about how common or successful it is. However, it is typically the best solution with regards to getting the credit back in good shape as quickly as possible, and there's no harm in trying.

[Anonymous]

I agree, I have no clue what my rights are and they will never outright tell you. I know if I could choke the person on the other end of the phone, I probably would because they are typically very abrasive.Thank you and I am definitely going to try it and post my results. I would also like it if some others wuld post their results as well.  Thanks.

[Boswd]

There are a few things you need to take into account when dealing with accounts gone to collections. ( this is coming from someone who has had multiple dealings with collections)

1.  Ignoring it will not make them go away, even if they fall off your credit report.  If they still fall within your state's Statute of limitations they can still go after you.

2.   How much is the debt for?

3.  With the new changes in the bankruptcy laws,  Collection Agencies and Credit card companies are sueing at a much higher rate.

.4.  Pay for deletions are possible, you may have to work hard on it but they are obtainable.   I for one had no luck what so ever in obtaining them, but some have,  so it is without a doubt worth a shot.

Here are your rights   http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm

I personally reccomend not fooling around with them.   Again try to get a settlement or a good payment plan.     If you don't think these guys won't come after you  just read some post on this forum

http://forum.freeadvice.com/forumdisplay.php?f=84   these are real life horror stories of what Collection Agencies can do to you.   Not only will a judgment destroy your credit report, that will be the least of your worries when they can put a lien on your house or they seize your bank account.

I'm not trying to scare you into doing anything,  I just think you need to know what could be some of the consequences by ignoring them.   

Try Debt validating them,  

Figure out your date of first delinquency and see if they are passed your state's Statute of Limitations

 I also subscribe to the belief that before you work on your credit score you need to clean up all the baddies first.    You can dillute your score all you want by opening up new credit cards and such and being good on them but while the collections and chargeoffs still remain unresolved that bump in score means nothing  in a manual review of your score.   besides you have a house and a car ( I assume)  those are the real reasons you want a strong FICO SCORE  and since you already have them, I would say go back and clean up the debt. 

[Anonymous]

LOL!. Thanks, I know getting anything in writing from them is tough. I once tried and it took my numerous phone calls and hours before I actually received something. I am going to give it a shot and see how I make out.Thanks.

[Anonymous]

"I know if I could choke the person on the other end of the phone, I probably would because they are typically very abrasive." Check if your state is a one party recording state (you only need consent of one party to record - i.e. yourself). Google or the like should return plenty of searches (e.g. http://www.rcfp.org/taping/). If you are in one of those states, begin recording all your conversations. It won't make them seem nicer, but the additional incentive of being compensated for their violations (see above for instance for some basic pointers about where to get started about your rights), it will become a lot merrier. If you're not in one of those states above, or don't wan to deal by phone, just send a limited cease and decist (again search for sample letters) allowing them to only contact you by mail. It will be slower route, but maintains paper trails and evidence if you go to court or the like. Finally do note not to send a full cease and decist as that would leave the collection agency only the option of suing you (which I imagine you don't want).