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Rebuilding - Need input

Vu
Frequent Contributor

Rebuilding - Need input

Greetings all,

 

My sister-in-law came for help with rebuilding her credit. Currently, her scores are sitting at 440-449 on Credit Karma.  I am not going to bother to try for FICO scores because, well it doesn't matters lol.

 

She currently has a total of around $50K in charge-off credit card debts: 

Chase: $22K on 3 different accounts.

BoA: $4K

Discover: $12.5K

State Farm: $10K

None of the debt from these OC is currently with collection agencies.

 

Then about $14K with collection agencies with stupid amount in a few hundred dollars...  The largest one is from Portfolio for CapOne, but the good thing is that they do PFD, so that's good.

 

No active credit card accounts as all of her accounts get canceled by creditors.

 

1 active auto loan that is 90 days late.

 

1 active mortgage loan that is 90 days late.

 

My plan of action is:

 

1. Get the auto and mortgage payment on track to stop the bleeding.

2. Get her 1 secured credit card and add her as AU for two of oldest credit cards.

3. Try to get to work with the original creditors to see how to pay off the debts, this is where I need your expertise on how to tackle this issue for the best possible outcome.

4.  Collection agencies will be dealt with PFD or settled only if the refused to PFD.

 

Any suggestions would greatly be appreciated.

 

Thank you.

 

 



Message 1 of 5
4 REPLIES 4
FireMedic1
Super Contributor

Re: Rebuilding - Need input

Not much to say other than make arriangements with the CC's before they hit a collection agency and pay them all off. Or before they get lawyers invovled and judgements filed. She's got 46k in debts. Behind on Car and Mortgage payments. Get these back on track will help the most. She doesnt need anymore credit cards right now. She needs to get this cleaned up with your help. Fix whats broken first. Then worry about more cards after the cleanup. Go to Discover Scorecard and get her EX FICO to watch as it rebounds. Its free. And do your best with the CA's and see what they will accept to close them out. Thats about it. Good Luck!

 

 






Homeowner since Sept 2020. My posts are JMHO. My siggy is not to brag. Just sharing my experiences after BK from learning here from rebuild to recovery @ 540's.
Message 2 of 5
Cloudburst2000
Frequent Contributor

Re: Rebuilding - Need input

She does not know how to manage money.  She should not be getting any CCs at this point, secured or not.  I think she would just max that out too.  She is in serious danger of getting her car repossessed and her home foreclosed on if she does not get her finances under control.  She needs to go on a strict budget.  She needs to cut out any extra expenses....cable, netflix, smart phone, higher end  makeup, clothes, eating out, going to the movies, going out drinking with friends, etc.  She has no money to do any of these things.  She doesn't need cable, netflix, hulu, or any other TV subscription service.  Antenna TV will do just fine for now and it is free.  She doesn't need a smart phone.  A pre-paid flip phone capable of making calls/texts is pretty cheap...much cheaper than monthly payments for smart phone services.  If her work requires a smart phone, then her work should buy the phone and pay the phone bill.  When she needs clothes, she needs to be shopping thrift stores.  She doesn't have the money to shop at the mall.  Tell her to buy in bulk for necessities from places like Costco.  It saves money in the long run.  She needs to cut out all entertainment that costs money...trips to the movies, eating out, etc.  For entertainment, do free stuff...hiking, biking, free local festivals, etc.  She desperately needs to save every penny she has and put it to paying down these debts.  I would even say that she needs to start looking for a second job.  If she can find even a part time job for, at least, $10/hour, that's around an extra $10,000 if she does a minimum of 20 hours per week.  She is going to need to make some major sacrifices to get out of this hole she has gotten herself into.

Message 3 of 5
Remedios
Moderator

Re: Rebuilding - Need input


@Vu wrote:

Greetings all,

 

My sister-in-law came for help with rebuilding her credit. Currently, her scores are sitting at 440-449 on Credit Karma.  I am not going to bother to try for FICO scores because, well it doesn't matters lol.

 

She currently has a total of around $50K in charge-off credit card debts: 

Chase: $22K on 3 different accounts.

BoA: $4K

Discover: $12.5K

State Farm: $10K

None of the debt from these OC is currently with collection agencies.

 

Then about $14K with collection agencies with stupid amount in a few hundred dollars...  The largest one is from Portfolio for CapOne, but the good thing is that they do PFD, so that's good.

 

No active credit card accounts as all of her accounts get canceled by creditors.

 

1 active auto loan that is 90 days late.

 

1 active mortgage loan that is 90 days late.

 

My plan of action is:

 

1. Get the auto and mortgage payment on track to stop the bleeding.

2. Get her 1 secured credit card and add her as AU for two of oldest credit cards.

3. Try to get to work with the original creditors to see how to pay off the debts, this is where I need your expertise on how to tackle this issue for the best possible outcome.

4.  Collection agencies will be dealt with PFD or settled only if the refused to PFD.

 

Any suggestions would greatly be appreciated.

 

Thank you.

 

 


Mortgage should be the priority for obvious reasons 

As far as secured cards and AU accounts, I'd wait. There is simply too much negative noise in there for those to make a difference. Later, yes. Now, just a waste of deposit. She can pay off couple of collections with that money. 

 

Recently someone posted about settling with Chase. The CO was relatively new, but they were able to settle for a rather low amount. I'd contact them and see how low they will go at this time. 

Discover is very litigation happy. They are brutal, especially with large amount like hers. I'd really start with them 

BOA, settle if she cant pay it in full. Same for state farm. 

It's important to get in touch with them before they decide to proceed with other means for collecting. 

Message 4 of 5
Vu
Frequent Contributor

Re: Rebuilding - Need input

Thank you, everyone, for your input.  Greatly appreciated.



Message 5 of 5
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