Help! What should my next move be??

[mattayy]

Hello,

So I have been up and down with my credit cards and scores over the last couple years and I really just need to figure out a solid plan. Right now most of my credit cards are close to their limits and i have a few negative marks on my credit. Below are the balances owed on my credit cards currently and the limits. I will also put the negative marks on my credit and just what everyone thinks I should do going forward. I am 24 but moving home next month for a year to pay off everything (hopefully) and start fresh. 

Also I only have lates on the Capital One Charge off every other credit card is on time and current with no 30 day lates.

Negative marks:

Capital One Charge off from 03/09 $1,121 but the debt was transferred to --> (Portfolio Recovery) on 05/13 (even though it was from March 2009?? How does this affect my CR?)

Santa Barbara Cottage Hospital, collection agency --> (financial credit network) collection of $120 11/09

Bank of the West, collection agency --> (The Best Service Co.) $373 06/09

Current cards and balance/credit limit:

Barclay Arrival 1476/1500

Bank of America Cash Rewards 960/1000

Amazon Store Card 385/700

Walmart Store Card 61/600

Paypal Smart Connect 399/500

J.Crew 495/1050

Macy's 740/CLOSED

Nordstrom 136/300

Credit One 595/800

Shell 0/500

Gap 0/200

Express 0/650

[Anonymous]

If I was you, I would use Dave Ramsey's baby step system. Stop using your cards, save $1000 for a basic emergency fund (for EMERGENCIES), and get on a monthly written budget. Any excess money (determined by your budget, before the month begins) goes towards your smallest debt first. Once that is paid, the money from that payment rolls into the next lowest debt. Lower your expenses by cutting out things you don't need. Moving home will definitely speed up the process!

[StartingOver10]

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@Anonymous wrote:
If I was you, I would use Dave Ramsey's baby step system. Stop using your cards, save $1000 for a basic emergency fund (for EMERGENCIES), and get on a monthly written budget. Any excess money (determined by your budget, before the month begins) goes towards your smallest debt first. Once that is paid, the money from that payment rolls into the next lowest debt. Lower your expenses by cutting out things you don't need. Moving home will definitely speed up the process!

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^^^Yes, exactly right.

Except I would start with your Macy's card if possible because that $740 is eating up the excess utilization of the other cards....

[RobertEG]

What is the SOL status of each delinquent debt?

[mattayy]

What does SOL mean? Sorry

[cartwrna]

Statute of limitations. The timeframe in which they can actively use legal ramifications against you. It is different state by state. My states SOL is 7 years, convenient huh :-p

[mattayy]

Hmm well I live in California and the card has been charged off since 09 I am not sure how I find out the SOL for CA?

[cartwrna]

Collection of debt SOL for California is 4 years. So you are way out of your SOL for each account listed. Which ultimately means they will be more willing to offer you a deal as they can't bring legal action, but they can pester you a lot. The deal COULD consist of a pay for delete. If they won't accept that then the next best thing is settle for a less % owed on the debt, while ALSO having it updated as paid in full. Potential lenders don't like to see an account that has been settled for less than owed. If you don't plan on getting any credit prior to 2016, I would leave them alone as they will age off anyhow. If you pay them now and they haven't been updated in some time the date of last activity/update of the account will be more recent. FICO will look at that as a newer account for scoring purposes. Older accounts affect your score less and less as time weeps by. Hope that helps. You can find several outlines of PFD letters on here. If offering one and they accept make sure you ask for it in writing on their company letterhead, although some will not fullfill this request, an oral agreement is just as good (in most states).

[Dj4Money]

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@Anonymous wrote:
If I was you, I would use Dave Ramsey's baby step system. Stop using your cards, save $1000 for a basic emergency fund (for EMERGENCIES), and get on a monthly written budget. Any excess money (determined by your budget, before the month begins) goes towards your smallest debt first. Once that is paid, the money from that payment rolls into the next lowest debt. Lower your expenses by cutting out things you don't need. Moving home will definitely speed up the process!

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 Only Dave would tell you to cut up the credit cards and don't EVER use them again. He is of the mindset that because he was irresponsible with credit that nobody can be responsible with credit.

 Then again if you call him up with debt problems (and that's mostly the case) and you can't seem to handle it, he will tell you this = Self fulfilling Proficy

 Coming here, we live in reality that major purchases happen mostly with credit. Very seldom do people purchase a car with cash, just as many put down more than 20% on a car or a home.

 You should never spend more credit than you can handle, I learn that the hard way. it took a windfall (my father dying) to pay off Aspire and Capital One. Capital One was charged-off, I paid it anyway, it fell off my report years ago.

 My spending is low and coming here taught me how to use credit cards properly, I don't have to use Dave Ramsey's extreme measures to get my life under control.

 But his Baby Steps are all helpful and if taken all the way down to Step #6 your doing pretty good. Then you'll have the best of both worlds, very little debt, low DTI, low credit usage and high FICO scores.

  That said if Midland would have taken a PFD, I would only have the Capital One card. Since they won't, it's more important to build trade lines I can benefit from than to pay them, my score will go up by just having trade lines, I didn't have any until I open these cards.

  There's more than one way to skin a cat...

[Anonymous]

Why is it that our society is so dependent on debt and credit? What's wrong with Dave's principles of having no credit cards? I understand it's possible to live a life without high credit card debt, and still have credit cards, but that just doesn't ever seem to be the case.