Time to face it......the long road back

[welshdan]

A few weeks ago I decided it was time to stop burying my head in the sand and face up to my mistakes. Long story short I made a career move just before covid hit which has ruined me but things are on the up and up. I've received some funds to prevent drained bankruptcy o am attempting settlements on 3 accounts which got charged off in late 2020 / early 2021

$17500 credit card charge off with capital one. Its been transferred to LVNV funding who are suing me and are trying to serve me. Their law firm Hayt Hayt Landau have accepted $7500 as a settlement figure which is around 42%. I'm waiting on the stipulation before paying later this week.

$9048 credit card charge off with citibank. They have acceped 25% to settle the account for a few pennies over $2262. Again I will pay later this week.

Finally Bank of America credit card charge off for 12k. I haven't made any contact with this account, just working on the other two first.

My score today per credit karma on both EQ and TU is 613 which is better than I thought due to years of perfect credit history.

So here I am on the road to recovery, I think I'm doing quite well with the negotiations but any pointers or help especially when working with BofA would be wonderful.

I intend to keep this updated to track my progress as a reminder to myself and to track my credit score.

Thank you for reading.

[welshdan]

Thanks for the kudos I feel better already!

I've got a few questions. So my scores are not terrible, how would settling on these 3 accounts affect me. I'm expecting a few months of it being the same or decreasing a little.

1. For LVNV I'm doing a PFD. I assume the OC (Capital one) will still report a loss on this or does the fact they sold it to LVNV mean LVNV now hold the keys to how its reported?

2. With citibank and bofa I assume they don't do PFD and it will report settled for less than full balance for 7 years?

3. I'm an authorized user on my wife's CC which is being paid faithfully every month, I assume this is helping me?

4. I also have 2 credit cards that have remained open this entire time with a zero balance. Should I keep a minimal balance on one of these to keep the good history going or is it pointless given I have charge offs?

TY

[FireMedic1]

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@welshdan wrote:

Thanks for the kudos I feel better already!

I've got a few questions. So my scores are not terrible, how would settling on these 3 accounts affect me. I'm expecting a few months of it being the same or decreasing a little.

1. For LVNV I'm doing a PFD. I assume the OC (Capital one) will still report a loss on this or does the fact they sold it to LVNV mean LVNV now hold the keys to how its reported?

2. With citibank and bofa I assume they don't do PFD and it will report settled for less than full balance for 7 years? The big boys dont PFD or even delete a 30 day late with a GW really.

3. I'm an authorized user on my wife's CC which is being paid faithfully every month, I assume this is helping me? Some lenders dont look at AU acounts. So its a YMMV thing. It does but then it doesnt.

4. I also have 2 credit cards that have remained open this entire time with a zero balance. Should I keep a minimal balance on one of these to keep the good history going or is it pointless given I have charge offs? Have 1 report $20 come statement date. Then PIF before the due date. Then you wont get the no use penalty.

TY

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Once you get the CO's settled. They will no longer count against your aggregate revolving util %'s. So there might be a small score bump. Then time will take care of the rest as they age off your reports 7yrs after the DoFD. Congrats on getting back on track. It will pay off in time. Just remember from here on out. If you cant pay it. Dont charge it. You'll be fine.

[welshdan]

@FireMedic1 

Ultimately my end goal is to purchase a home. As the settled charged off accounts disappear slowly into the rear view mirror, how negatively could this affect a mortgage app in say 12 months? 

Of course for FHA I know mid 600s is a min and I hope to be at least there in 12 months, but does this seem to be a realistic goal? Or should I be prepared for a longer wait.

[FireMedic1]

Going by what you said when they were CO'ed. 2020. Its still fresh. I know it may sound strange. I'd hold off for another year and let your scores climb some more for the possible highest FICO 4, 5, and 6 possible. Just a couple points higher around 650+ your looking at thousands and thousands saved over the life of the mortgage.

[welshdan]

@FireMedic1 great I'll do that and start building up the good payment history again.

Yeah the mortgage will at least be 12 months from now so fingers crossed I can make quick progress once these items are resolved.

Spoke to citibank last night and paid the settlement amount of 25%. Usual disclosure about the 1099c which will affect this year's tax return. Interestingly the rep walking me through the process twice stated the account will be reported paid in full with a zero balance. I would've guessed it would report as something like settled for less than the balance owed but we'll wait and see on that.

Tonight I'll take care of the account that is in suit with LVNV funding to prevent a judgement. 

At that point it's just Bank of America, I tried calling them but couldn't navigate their system to speak to someone so gave up. 

Does anyone have any experience of what sort of settlement BofA may accept? I'm shocked Citibank accepted 25% so I'll be starting off even lower with BofA but for some reason am expecting it to be a tough negotiation.

[welshdan]

Just a quick recap.

Jan 19th settled on citibank

Jan 20th settled on pending lawsuit with LVNV/Resurgent. Case has been dismissed.

Jan 21st charged a small amount to my open CC

Feb 1 my TU/EQ scores on CK score went up by 11 to 624 due to the credit card usage maybe? I know CK isn't the best but for now it's what I have.

To do

Still having zero luck contacting bank of america on the chunk around 11.5k-12k that I owe them. I can never get through.

Hopefully another week or two and we should see LVNV and citibank update their reporting. Citibank agent said they would update to paid in full so we'll see if that actually happens.

[BB30]

No real advice for you but just wanted to say congrats! Keep at it. I have a student loan that was charged off with Citi that I need to take care of. They have some Collection agency working on their behalf  I need to call them but keep putting it off lol. Good luck and keep us updated! 

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[welshdan]

Figured I'd swing back around for an update.

Feb 28

TU and EQ scores per credit karma are 653 which is up 31 points since early Feb.

Cap one / lvnv collections has been deleted.

Citibank still showing up with full balance charged off

Still no luck with bofa very difficult getting a hold of someone.

[FireMedic1]

You can get your free EX FICO 8 score at experian.com monthly.

https://usa.experian.com/registration/?offer=at_frsas102&br=exp&op=FRSC-ALT-AC2-102-MQE-XXXXXXX-XX-E... 

For BoA have you tried 866.266.0212?