Need support and advise on debt and rebuilding

[Anonymous]

Hi forum,

I’m 27 years old and have what I consider some pretty serious credit issues for someone my age. To keep things short and sweet, I have about $24k in debt. This is between 4 active credit cards, lots of collections, and a car loan, on a car that was totaled. I make 56k a year before tax. I also have neglected all of these collections and have become delinquent.

My month expenses which will can not and will not change. Everything else like extras etc can be cut out cold turkey no issue.

Car: $610
Rent: $1000
Auto insurance: $180

My question is what do I do? Where do I start? How do I got about this. There was once upon a time I had almost a 700 score across the board.

This is starting to rule my life and become depressing. Any real advice would help. If it helps I will list out my debt and who it’s from and the amount.

[DIYcredit]

The most important things to do is never become delinquent again and to start paying down the cc debt.Alot of people recommend the "debt snowball" .To be honest instead of paying down the  smallest cc balances first.I would pay the most I could to the cc with the highest balance and the highest apr and make the minimum amount due on the rest by their due dates and save money on interest.When one cc was paid down, I would start on the next one and make minimum amount due on the rest.Each time I paid down a cc balance, I would work my way down to just one cc balance and that improves your credit score along with keeping every credit account current and keeping cc balances way below 10%.It takes time and patience,but it worked for me.The most Fico score improvement came when the total cc utilization was below 50%,below 30% and then 6%. GOOD LUCK...

[Anonymous]

My balances are low- under 3000 between 3 capital one cards. $2500 on a citi card that I use and pay for work and get reimbursed but thinking of ending that matter as a whole once paid off and using a company card instead. My biggest issue is collections and cards that are deliquent. I was thinking- pay card minimums.. then pay off collections small to large?

[Anonymous]

When you’re ready to pay the collections I would send out PFD (pay for delete) letters first, but only once you have the money to PIF (pay in full). Send these letters (you can find templates everywhere) CMRRR (Certified Mail, Return Receipt Requested). Some or all of the companies may ignore you. Others will mail you (or even call you) denying your request, but you may get lucky and as everyone on this forum likes to quote “you miss 100% of the shots you don’t take”. These will help you clean your report faster.

For the companies that refuse, you can either keep trying (I don’t know what the rate of success is after a PFD denial) or you can pay (in full, or settle) and start a GW (good will) campaign to have the CA (collections agency) remove them from your report. Again, there’s a ton of guides on here on how to increase your chances of success.

I’m also 27 and trying to repair my report. My scores are low 600s. I had two 30+ day later removed and now I’m battling a 120+ late and one collections I PIF before I knew about PFD and they’ve rejected all my GW requests so far. So, know that you’re not alone.

My debt wasn’t as high as yours. It was about 12k. The first thing I did was call the CC companies I owed money to and I asked them about their hardship programs. Synchrony wasn’t very helpful (ymmv) but Comenity (GameStop), and Discover we’re both able to help me with temporary lowered interest rates and monthly minimums. GameStop also refunded all recent late fees after 3 consecutive on time payments. I used this time (6 months on the discover offer and 12 months on the Comenity offer) to pay off as much as I could and use the lower APR to my advantage. I was able to get my debt low enough that I was able to combine some savings I had with a loan from my credit union to pay the revolvers off completely and combine my three credit card bills down to one monthly installment. This also allowed me to exchange the 25-26% apr of my CCs for 11% on the loan. It didn’t help my score (initially) but it did help me get my interest lower so I could get my head above water.

If you decide to go with the hardship programs make sure you ask about all the terms and conditions. I’ve heard of some programs leaving blemishes on your credit, but these didn’t. The only real conditions were I couldn’t have more than 3 late payments during the entirety of the hardship, and I couldn’t have 2 consecutive. If I did, the program would end. I also couldn’t use the cards until they were PIF even if the program ended before then. Again, ymmv.

[Anonymous]

Also, I would very much so get caught up on the delinquents before they turn into more collections or become 90+ (preferably before 60+) lates.

Don’t let your “paying as agreed” accounts start to slip to get caught up, either.