In August of '17, I was looking in to filing BK and spoke with a lawyer, agreed to start the paperwork process, paid them $1000.00 and did not pay on CC's, they all went 30 days late(had never been late before). I kept all other things current, i.e. mortgage, car note, utitilies, hoa's. Then, I decided I could not file BK, just could not do it, could not come to terms with it. The stress was too overwhleming and I was rightfully worried the trustee would come after my home because I had equity over the allowed exemption and was afraid to be forced in to a BK13 and not be able to complete it.
This is what I did:
Sold my home(no late's ever, made $29K off sale, only lived there 1 1/2 yrs and miss it a lot), moved in with B/F(paying some utilities & all groceries) he does well financially and is good with the arrangement.
Sold my car(no late's, PIF). Driving an old but reliable care now with no payments.
Put $15K in to saving account for now and will look in to putting some in to a ROTH IRA. I will also be saving at least 30% of my income monthly to add to this.
US Bank-PIF (account was closed by grantor when I asked for a hardship program when I decided not to BK) They lowered APR to 4.9%. I wanted this gone. Paid $7700
Chase- (same screnario as US Bank) they gave me 0% until PIF which will be 5 year's & I do plan I paying double payments to get this PIF within half the time. Owe $20K and had this account for a decade.
CAP One(Furntiture store account)- PIF, account is still open with an available balance of $8K. Paid them $2200
Chase Amazon- PIF(account closed when Chase closed above account). Paid $1100
Best Buy- Owe $600.00, account is open with $4K available and balance due is 0% for 4 years. Will be paid off in the next 3 month's
I have a long and thick credit history going back 30+ year's. There are many accounts that were closed by me year's ago because I did not need the accounts any longer & accounts closed by grantor due to inactivity. Many loans and other mortgages that were PIF and closed and store cards that are still open but I never use and shredded the card long ago.
In December, I received a Discover IT card offer and app'd for it, surprisingly was approved but with a low $1300.00 CL. This helped me out during the sale of my condo and got me by until after closing.
I would like to see my FICO scores but think I should wait until all the PIF's show, tho I am admittedly scared to see my scorse. When I was in the BK process, my scores were mid 700's, when I purchased my home in Aug '16, they ranged from 780-802 and when I purchased my car in Jan '15, the highest was 837.
I feel I did the "right thing" but it was very hard to do, there was no easy, feel good outcome. I miss my home that I made look just the way I had wanted. May be in some time I can purchase another property, time will tell. I know thing's could have been much worse and had much poorer outcomes, so I am grateful, just taking time to adjust and it has only been a month since moving.
How bad will the 30 day late's affect me and for how long, 7 year's? Was it a bad idea to PIF without asking for a deletion of the late's? If so, can this be corrected by me? Any advice?
30 days typically affect Fico 8 for up to 2 years but in your case since there were multis it could be longer. Good thing is they are only 30s and I would begin a goodwill letter campaign asking for forgiveness of the late.
That is a tough story to read, I'm glad you were able to avoid BK and selling the house had to be tough. I'm not sure if you'll have to wait out the 7 years or if once they show as PIF you will be able to ask for GW to get some of the lates off. I guess it might depend on how they show on your reports as well.
Thanks for sharing and you'll be back on your feet with patience.
Thank you both for your replies. I will def look in to the GW letters and start that process, thank you for the link.
I ran my scores today:
The plus on all 3, no serious delinquencies and long credit history. The negative on all 3, high credit usage(PIF's haven't reported yet), bad payment history (30 day lates) but show as current. Exp/Trans show too high loan to value and Equifax shows not enough.
Time to start the rebuild. I seriously cannot believe 30 day lates can do this much damage. Lesson learned.
Updating for my reference(may help someone else, never know):
Ran credit scores today:
Experian 655 (up 8 points in less than 1 week)
Equifax 655 (up 8 poins in less than 1 week)
Transunion 672 (up 31 points in less than 1 week)
Noted that US Bank removed my (1) 30 day late payment after I paid the account in full. I did not request the removal, but it is gone from all the CRA's, so that is good news. Waiting on other PIF accounts to update, recheck CRA's and see if they follow suit or if I will need to call and go the GW letter route.
Good little update congrats! I have 1 late from a year and half ago that drags a little. I haven't wrote a goodwill letter but thinking about it. That is my only drog.
great story yo avoid bk. your scores will take care of themselves over time
Thank you wa3more & jlitnns
I called Capital One today and they gave me a fax# to send in a letter asking for deletion of the one 30 day late payment, the account is paid in full. They said to give it 3 days to hear something back. We will see what happens and the account is PIF.
I also called Chase about my (1) 30 day late w/Chase Freedom and Chase Amazon, no go. They state they will not/ can not remove accurately reported information. I was late, they will not remove. Seems it will stay on for 7 year's....
Ran credit scores today (Experian account), all PIF accounts are still not showing:
Has anyone had any luck with Chase removing 30 day lates? I searched the board and it doesn't seem they will. They will help with APR and late fee's but not late payments it seems.
Yay, from what I've read Chase is tough and hard to remove as they say 'accurately reported' late payments as they are valid. Good luck, maybe something will turn up!
Great story usually if there is a will there is a way and you proved it.. Kudos to you. Alot of time people take the "easy" way out which you did not. Not saying BK7 is not stressful for people, but for alot of people there are certainly other ways than filing although this certainly doesn't applly to all such as unexpected medical bills, etc, etc. Nice to hear this story. 4 years ago I owed close to or over 30k in debt (CA's/CO's,etc) I hated paying it back, but made to much for BK7 I buckeled down for a year cut some expenses and paid it all back in a year. Alot of times it is just about priorities and cutting the "fat".