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Self-Inflicted Credit Destruction - Need some serious advice

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Self-Inflicted Credit Destruction - Need some serious advice

This is horribly, horribly embarrassing. But, the past few years of hardship and negligence have completely decimated my credit. I had actually started my credit journey on these forums, building and establishing myself. And, I had put myself in an incredible position. My scores were all in the high 700s. I had an absurd amount of available credit. I was in with every prime lender. I owned a home. I never really had to worry about approvals. This was around 2016.

 

Fast forward to 2019, and it's hard for me to even get an apartment, a subprime CC, or an auto loan. It's so devestating and I'm really ashamed. I never imagined I'd be in this position. It all feels terribly hopeless.

 

I've nearly burnt every card issuer along the way; CITI, Sync, Chase, Amex, Discover, Cap1, all of them... So, I'm not even entirely sure if I'll ever get back in with anyone substantial. I have multiple active collections, multiple charge-offs, currently late on my car payment because I can't afford it anymore, and have a couple of lates reporting.

 

This whole downslide started around the time I was hit by a commercial vehicle in Las Vegas. I was doing real estate at the time, and wasn't able to work for a while. As a result, all of my accounts began to fall behind. I had already amassed a rather large amount of debt, due to poor financial decisions, and feeling as though I was invincible to some extent. After losing my income, the payments and debt started to pile on top of me. I regret it all. I wish I could go back and do everything over. I had too much available credit, and didn't take time to account for hardship. 

 

I'm now sitting on 400s across the TU, EQ, and EX. And, I have about 80k+ in charge-offs/collection accounts. I've since changed work, and there's no way I'll be able to settle/pay any of these accounts that I owe. And, Amex is already pursued me legally, though I haven't heard anything from them in some time. I just don't have the funds or income to cover these enormous debts. It's hard enough covering my 412 dollar car payment. And, unfortunate for me, the car is a total loss. So, I've got a ton of negative equity in this vehicle I'm paying an absurd amount of money for every month, which has held me back even further from getting out of the car. 

 

I recently signed up for Lexington Law, as a desperate attempt to repair these things. But, I'm starting to think it might have been a scam. I can't be sure, yet. 

 

Is there any hope for me? I'm 26 and feel very overwhelmed and lost as I've dug such a deep hole that I don't feel like I can dig myself out of. I feel like I'm being buried. Does anyone out there have any advice or relatable story to help me? I want so desperately to get to a healthy place again, financially.

 

Thanks in advance for any words of encouragement or advice! I'm back to scour and get out of this mess I've made. Smiley Sad

1/14/19 - TU: 457 | EX: 403 | EQ: 458
Message 1 of 29
28 REPLIES 28
Valued Contributor

Re: Self-Inflicted Credit Destruction - Need some serious advice

I'm sorry to hear about your troubles.  Have you considered a consultation with a BK attorney?  If you know that you can't afford to pay creditors, they will still come for the money legally.  Amex has already started.  Wage garnishment at the very least is where this is headed.  I'm a firm believer in @#$% happens so I would at least set up a meeting with a BK attorney.  Wishing you luck!

 FICO 8
Message 2 of 29
Regular Contributor

Re: Self-Inflicted Credit Destruction - Need some serious advice

Thank you for the reply. I'm not super familiar with bankruptcy, and haven't seriously considered it. Do you think this would be a good route to take? Would I still be able to keep my car? Would my finances suffer the same, either way? It would be nice to start over. But, to my understanding, a bankruptcy might make it a bit harder going forward, or no? 

1/14/19 - TU: 457 | EX: 403 | EQ: 458
Message 3 of 29
Valued Contributor

Re: Self-Inflicted Credit Destruction - Need some serious advice


@Dhar33 wrote:

Thank you for the reply. I'm not super familiar with bankruptcy, and haven't seriously considered it. Do you think this would be a good route to take? Would I still be able to keep my car? Would my finances suffer the same, either way? It would be nice to start over. But, to my understanding, a bankruptcy might make it a bit harder going forward, or no? 


It is possible to keep your car however with negative equity, it is unlikely your attorney would recommend that route.  I don't know what your finances are like so it is hard for me to comment.  Many people have been very successful in rebuilding quickly after a BK.  I know it sucks to have to go this route but from the amounts that you mentioned and the probable legal action very soon, things will just get worse for you before they get better.

 

Filing for a BK:

Because of the automatic stay, the moment that you file for Chapter 7 or Chapter 13 bankruptcy, all phone calls, emails, letters, and other demands for payment from a credit card company or collection agency must stop. All lawsuits must stop too. This means that once you file for bankruptcy, a credit card company cannot begin a lawsuit against you for past due bills, and if one has already been filed, that court proceeding must immediately come to a halt.

 FICO 8
Message 4 of 29
Valued Contributor

Re: Self-Inflicted Credit Destruction - Need some serious advice

So sorry...

But as Overmedicated said: @#%& Happens.

 

Bankruptcy is a tool in the financial world for a reason.

I've very rarely advocated for it and without knowing your balances, income, expenses etc it's tough to say if this is a good route for you.

Also as OM posted; that's why you consult with a BK lawyer- to make that decision.

 

I will add: Lexington Law is a waste of your time & money. They can't do anything YOU can't do. If you would rather try to fix your credit issues without BK; You can post all your debts, collections, CC's limits and balances and somebody can attempt to help you work out a repayment budget.

 

I wish you good luck! Don't worry, you fixed it once- it can be fixed again.. 




Message 5 of 29
Established Contributor

Re: Self-Inflicted Credit Destruction - Need some serious advice


@Dhar33 wrote:

I'm now sitting on 400s across the TU, EQ, and EX. And, I have about 80k+ in charge-offs/collection accounts. I've since changed work, and there's no way I'll be able to settle/pay any of these accounts that I owe. And, Amex is already pursued me legally, though I haven't heard anything from them in some time. I just don't have the funds or income to cover these enormous debts. It's hard enough covering my 412 dollar car payment. And, unfortunate for me, the car is a total loss. So, I've got a ton of negative equity in this vehicle I'm paying an absurd amount of money for every month, which has held me back even further from getting out of the car. 

 

I recently signed up for Lexington Law, as a desperate attempt to repair these things. But, I'm starting to think it might have been a scam. I can't be sure, yet. 

 

Is there any hope for me? I'm 26 and feel very overwhelmed and lost as I've dug such a deep hole that I don't feel like I can dig myself out of.


You stated that there's no way you can pay back the $80K in debt, and it's not going to get any easier. At your age you should be starting over ASAP. Go see a BK attorney. Once you are discharged your scores will jump up a bit & you'll be able to begin your rebuild. A lot of us on here have done it. It's better than being ruined forever.



Starting Score: Nov 3, 2018: EX 597 TU 599 EQ 616
Current Score: October 1, 2019: EX 665 TU 688 EQ 675
Goal Score: Dec 31, 2019: EX 700 TU 700 EQ 700

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Message 6 of 29
Established Member

Re: Self-Inflicted Credit Destruction - Need some serious advice

I would seriously look into bankruptcy. Lexington Law for me was a big waste of $200-$300 for DH and I... luckily I realized that quickly, I could have used that money to pay back an old debt or bring an account current. All they do is basically dispute debts for you and hope they are somehow forgotten about and deleted. I did that several years back myself.

 

However, Lexington worked for my Father in law.. he ended up buying a house fairly quickly after using them. But his debts were 6+ years old and probably due to age off anyway. 

 

I agree with everyone else. Crap happens but it doesn't define your future. Get back on the pony and do what you have to do it fix it. 

 

 

 

Repairing my husbands and I credit:
me starting: 9/18 ex 531 eq 535 tr 499
current: 1/19 ex 520 eq 539 tr 542
his starting: 10/18 ex 543 eq 566 tr 569
current: 1/19 ex 600 eq 575 tr 589
Opened CCs:
$300 Nordstrom Store Card | $300 Indigo Mastercard | $300 CreditOne Visa | $200 Citibank Secured Mastercard | Fingerhut Freshstart
Gardening, until we prequalify for a non subprime card.
2019 Goals: 670 across the board, Amex Approval
JUST FIX IT.


Message 7 of 29
New Contributor

Re: Self-Inflicted Credit Destruction - Need some serious advice

I would also recommend speaking with an atty for BK. A lot of them do free consultations. I filed in July last year and was discharged 10/12/18. I was extremely depressed and stressed about my situation, wish I could turn back time and change some things, but life happens. I feel so much better now that my debts are discharged and can start over fresh. An attorney should be able to let you know if you can keep your car, my husband was able to keep his, I had one as well that I was making payments on but chose to give it up since the payments were so high.
10/12/18: Discharged from BK7
10/15/18: EX 541 | TU 490 | EQ 555
6/7/19: EX 625 | TU 624 | EQ 655

Message 8 of 29
Senior Contributor

Re: Self-Inflicted Credit Destruction - Need some serious advice

Its very rare that anyone here will say BK is the way to go. But there is always an exemption. If I was in your shoes. I'd be on the phone tomorrow setting up appts for a lawyer ASAP.  They're coming after you and now is the time to close the door on them. Learn from your mistakes. Time for a fresh start. Dont worry now about what you can get after BK. First step has to be completed first. Then after DC the rebuild will start.





My posts are JMHO. I DO NOT claim to be a FICO expert. Just sharing my experiences from rebuild to recovery after BK DC. My siggy is not to brag at all. Just to show fellow members what can be accomplished when you do it right and play the FICO Credit Game.
Message 9 of 29
Frequent Contributor

Re: Self-Inflicted Credit Destruction - Need some serious advice

I'm still a newbie here and I'm not qualified to give you much advice... but my first thought to myself when reading your post was "bankruptcy!" At least talk to a lawyer.

 

If I can tell you anything, I can tell you this: This forum is full of people who have bounced back after bankruptcy and are doing GREAT, and far sooner than you'd think. I hadn't really known that about bankruptcy before coming to this forum. I thought it was the end of the world. Don't get me wrong, it's not like anyone likes a BK, but sometimes it's the only sane solution.

 

You are young. You learned your lessons young. You won't be repeating the same mistakes again. You have many years ahead of you and that future can be bright with much more wise credit decisions. Don't feel ashamed. Some of us have to wait until we're much older before we figure it out. Cat Wink

 

You'll get a lot of good advice here and I'm confident that you'll come out all right. Cat Happy

FICO8: Nov 20, 2018:
FICO8: Sept 25, 2019:
Goal for December 2019: FICO 640-700
Overstock Store Card, $2,250Walmart Store Card, $500 limitDiscover IT Cash Back, $2000Navy Fed cashRewards, $1000Shell Citi store card, $800Navy More Rewards, $17,000RIP Green Dot Platinum
Overstock $2,250, Walmart $500, Discover IT Cash Back $2000, Navy Fed cashRewards $1000, Shell (Citi) Fuel Rewards, $800, Navy More Rewards, $17,000, (Green Dot Platinum Secured, $200, to be cancelled.)

Starting Score: 539
Current Score: 659
Goal Score: 760


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Message 10 of 29
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