26 years old. $10k in total debt. Cap1 civil judgement next Monday. Help!

[Anonymous]

Ok so as I said, I'm 26, I currently have about $10k in total debt.

This includes:

-Capital One $2127 charged off and seeking default judgement (hearing next Monday)

-Capital One $534 charged off but then paid off
Indigo card $339/$300 balance and current, 2 30-day lates most recent 11/18

-Credit One Bank $292/$300 and current, 1 60 day and 2 30-day lates most recent 11/18

-First Premier Bank $214/300 current, 3 30-day lates most recent 11/18

-Discover It $220/$300 and current, never late

-Citi Cards $46 balance left, closed by Citi in August, 3 30-day lates most recent 8/19

-Local Credit Union - Personal Loans of $1064, $10100, $867, $977, all paid off since Apr 2015 but 2 of the accounts were 150 days delinquent at one point

-Student Loan $5127 account current and paying, was 30 day delinquent twice, most recent July 2015

-Unpaid Verizon Wireless bill $939 since August 2017

-Fingerhut - $164- Paid since Sept 2018 - Was delinquent 60 days in August of 2018

-Chrysler Capital $26,000 - was in a total loss, paid October 2017 except $650 and ended up with 3 30-day lates which I wasnt even aware of most recent January 2018

-No inquiries

-Medical collections of $319, $496 and $485 all from before I had medical insurance (I understand not an excuse but still)

-No public records

-Total credit history 8 years

-AAoA 54 months

-Payment History - Fair

-FICO 8 - Experian - 529

(Only pulled Experian but this information is 99% equivalent across the other 2 bureaus on CK)

Now before anyone says it, yes.

I did a piss-poor job of managing my credit for the last several years. That much is obvious. But I've had a wake up call with this civil complaint from Capital One for next Monday September 16th.

I want to know first of all if civil default judgements still show up on the credit bureau reports? I read multiple articles as of last year stating they no longer do.

I would also like to know if I should bother paying this $2127? Upon calling the law firm representing Cap1, Hayt Hayt and Landau, informed me that for a lump sum payment of $1700 they would retract the civil complaint. Does this sound realistic? And if so would i need to obtain an agreement in writing before doing so?

My other option from them was to pay the full amount in installments over 9 months and the default judgement would be entered but as long as I kept making payments they wouldn't touch my bank accounts (I live in Pennsylvania where they can only levy bank accouts, not wages AFAIK)

I visited a bankruptcy lawyer and surprise! His advice was to file Chapter 7 because I'm already sub-600 and have $10k outstanding PLUS a civil judgement bearing down on me. Of course I expressed that i don't want to have a 10 year recovery process and he tried telling me most bounce back within a year. I really do not want to go that route for obvious reasons: I'm too young and am now in a spot financially where I can feasibly pay off the remaining credit cards including the $1700 settlement offer from Hayt/Cap1.

Do public records/civil judgements still show on credit and what about an employer background check?

What would your advice be?

Really appreciate any feedback.

[Remedios]

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@Anonymous wrote:
Ok so as I said, I'm 26, I currently have about $10k in total debt.

This includes:

-Capital One $2127 charged off and seeking default judgement (hearing next Monday)

-Capital One $534 charged off but then paid off
Indigo card $339/$300 balance and current, 2 30-day lates most recent 11/18

-Credit One Bank $292/$300 and current, 1 60 day and 2 30-day lates most recent 11/18

-First Premier Bank $214/300 current, 3 30-day lates most recent 11/18

-Discover It $220/$300 and current, never late

-Citi Cards $46 balance left, closed by Citi in August, 3 30-day lates most recent 8/19

-Local Credit Union - Personal Loans of $1064, $10100, $867, $977, all paid off since Apr 2015 but 2 of the accounts were 150 days delinquent at one point

-Student Loan $5127 account current and paying, was 30 day delinquent twice, most recent July 2015

-Unpaid Verizon Wireless bill $939 since August 2017

-Fingerhut - $164- Paid since Sept 2018 - Was delinquent 60 days in August of 2018

-Chrysler Capital $26,000 - was in a total loss, paid October 2017 except $650 and ended up with 3 30-day lates which I wasnt even aware of most recent January 2018

-No inquiries

-Medical collections of $319, $496 and $485 all from before I had medical insurance (I understand not an excuse but still)

-No public records

-Total credit history 8 years

-AAoA 54 months

-Payment History - Fair

-FICO 8 - Experian - 529

(Only pulled Experian but this information is 99% equivalent across the other 2 bureaus on CK)

Now before anyone says it, yes.

I did a piss-poor job of managing my credit for the last several years. That much is obvious. But I've had a wake up call with this civil complaint from Capital One for next Monday September 16th.

I want to know first of all if civil default judgements still show up on the credit bureau reports? I read multiple articles as of last year stating they no longer do.
They do not on EX, EQ and TU. They do on others 

I would also like to know if I should bother paying this $2127? Upon calling the law firm representing Cap1, Hayt Hayt and Landau, informed me that for a lump sum payment of $1700 they would retract the civil complaint. Does this sound realistic? And if so would i need to obtain an agreement in writing before doing so?

It's not "bothering" with payment. If you dont, they will collect via other means such as bank account levy. They have a long time and judgements can be renewed. Paying voluntarily is better than what happens if you dont. I would not use "They cant garnish wages" as a reason to end up with a judgement.  At least with garnishments, they would have been limited to certain amount per paycheck. With levy, unless the source of income is something they cannot touch, they can empty it and continue to do so till judgement is satisfied. Life without being able to keep bank account opened is torment. 

My other option from them was to pay the full amount in installments over 9 months and the default judgement would be entered but as long as I kept making payments they wouldn't touch my bank accounts (I live in Pennsylvania where they can only levy bank accouts, not wages AFAIK)

This would work too, but you dont want to live under a threat of what happens if you miss a payment. They are very aggressive when it comes to litigation. If you can, pay and be done. If you can't, payment plan is fine but while judgement wont be on three main CRA, plenty of data aggregators and smaller reporting agencies do retain this information. Lexis Nexis will.Your auto insurance rates will be impacted. Sage Stream, Clarity  and Innovis also collect and retain this info. Their reports are used in lending. You really do not want judgement 

I visited a bankruptcy lawyer and surprise! His advice was to file Chapter 7 because I'm already sub-600 and have $10k outstanding PLUS a civil judgement bearing down on me. Of course I expressed that i don't want to have a 10 year recovery process and he tried telling me most bounce back within a year. I really do not want to go that route for obvious reasons: I'm too young and am now in a spot financially where I can feasibly pay off the remaining credit cards including the $1700 settlement offer from Hayt/Cap1.

You wont bounce within a year and filing BK over $10 is really not the wisest decision. You're young and capable of working multiple jobs if you need to. There is nothing easy about BK but I'll leave that to others to explain. 
Do public records/civil judgements still show on credit and what about an employer background check?

Depending on who they use, yes especially for those purposes. Three big CRA dont, but  I've mentioned the others above and there are plenty of others that  do. 

What would your advice be?

Really appreciate any feedback.

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Hi and welcome to the forums 

The advice would really be to do this the right way, which is also the hard way. 

$10K is not exactly BK material. While you may be a student now, you wont be a student forever. You'll need a place to live, cars, phones, credit cards etc.  Life without a decent credit can get quite difficult.

Attack one debt at the time. Settle ones you cannot pay in full. Offer them something. Even small payment plans will do. Work and develop a budget. Without it, all this will be in vain. There is a cycle there that you need to break. 

Stick around and read, ask questions, it can be done. It's not easy, but it's worth it in the end 

Good luck 

[Anonymous]

Appreciate the advice, I think I’m gonna call up Hayt tomorrow and offer to settle a lump sum and go from there

[Anonymous]

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@Anonymous wrote:
Appreciate the advice, I think I’m gonna call up Hayt tomorrow and offer to settle a lump sum and go from there

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If they offered 1700, I would offer 1200. Negotiate ... don't take the first offer. Also, do not file bk7 for such a small sum. Pick up side jobs, gigs, Overtime etc.. whatever you can, you can get this paid off quickly. 

Your post on what your debts are is also very unclear but it seems your largest debts are this capital one bill you are settling, and your student loan for 5k. Firstly your student loan will not discharge in bk7, so you would be declaring bk7 to discharge 5k. Not sure what your yearly income is, however this amount seems easily conquered on even a modest salary. If you wanted someone to write you an exact plan on how to pay everything off more details are needed. It seems you have the $1700, to pay Capital one currently, so I would negotiate that down if you can and pay that immediately. You would then need to figure out how much disposible income you have, which is your yearly income minus necessities we obtain this by making a budget. Then list all open accounts (dont bother with closed accounts or what was late or when), balances, APR, minimum payments. From here, there are many options, the most popular being snowball, or avalance. 

Snowball is you make minimum payments too all creditors, and apply ALL other money left in the budget to the smallest debt. Once that smallest is paid off, you apply all the money you were applying to the smallest, PLUS your minimum payment to your second smallest debt and apply it all to the second smallest debt, and so on until everything is paid off. 

Avalanche is similar however instead of paying by smallest balance to largest balance you pay by highest interest to lowest interest. 

Do NOT file bk7. 

If you need more information or want more help on coming up with a plan PM me. 

[Anonymous]

Yes, the largest of my debts is the Cap1 for $2100.
Other than the student loan which I was aware would not be discharged even in Bk.

However if I counteroffer $1200 or whatever and they agree, should I obtain the agreement in writing to cover my own ass?

And I make a yearly salary now of about $51k net income, this a recent development lol I was not making anywhere close to that amount before.

So yes I think I’m going to go the snowball route also like you suggested

[Anonymous]

Everything you do get in writing, but your take home pay is nearly 2k every 2 weeks. Just pay all of this off in the next 3 months and don't go back into debt. 

Plan, use savings plus next check, we will call it check 1 to Pay cap1, check 2 Pay verizon, check 3 Pay off ALL CC, checks 4,5,6 pay off student loan. 

If you have anything left over after paying one thing on the list, pay the next thing... Ridiculous to have a 51k NET yearly salary and go bk over 5k.