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We've had a tough couple years and we are close to being in a place to try to repair the damage. My husband was laid off work shortly before the pandemic and did not have luck finding work in almost 2 years. We reduced expenses as much as we could but our debts obligations were too much for my income alone. We both have missed payments and become seriously delinquent on credit card and personal loans. We have kept up on mortgage and car payments.
Now that he finally has a job, I'm not sure how to dig out of our 2 year hole where debt has only grown due to interest. From what I can tell I won't qualify for bankruptcy. Is debt settlement worth it to get out of the hole? Paying minimum payments will never allow us to get out of the debt cycle. It's just financially impossible.
Your story is unfortunately all too common right now. Without specifics of your credit file, it's hard to give specific advice, but yes. You can improve your credit file yourself without needing 'credit repair' services that will often only make things worse. Paying delinquent debt can have immediate positive effects to your credit scores. It is a myth that paying old debts won't help your scores. You just have to have a plan and know how to go about it correctly and efficiently.
My advice is to go to annualcreditreport.com and pull your 3 reports there. This can be done weekly for free through Apr 2022. These reports do not show credit scores, but they are your official and accurate reports from the 3 major CRAs. Make a list to form a picture of where you are no matter how ugly it may look. Any accounts that are still open despite your late payments, you want to at least make minimum payments to keep them open and in good standing to provide good payment history while you repair your credit. If you are so inclined, make a list of your accounts...opened, closed, credit cards, installment loans, charge offs, and collections, and give us non-specific specific information, and we can help you formulate a plan. Example:
Card A - Bal $2000 CL $2500 still open
Card B - Bal $1500 CL $2000 closed - charged off
Loan A - Bal $10K of original $15K loan - still open
Collection - Portfolio Recovery - $2K (This is really the only time where the name of the collection agency will enable us to give you better advice)
You can use general amounts and no creditor names if you're worried about privacy. If you're embarassed to list it all here...don't be. We're all here bc we screwed up our own credit and now try to help others fix theirs. If you're still uncomfortable giving info like this, it's harder to specifically help other than to say to talk with your creditors. Don't hide from it, bc it won't go away. Many lenders are offering some kind of help during the pandemic. Use the snowball method if possible. Pay minimums on everything, but focus anything extra on 1 particular debt (highest interest, smallest amount, you pick the way that works best for you). Once 1 account is paid, snowball that onto the next one while you pay minimums on the rest still. Keep doing it until it's gone. Come back with specifics if your comfortable, and we'll help you make a plan.