Newbie with some questions

[CKinNC]

I just recently found this board and there seems to be some very helpful information. Maybe someday I'll know enough about this stuff to help someone else.

Anyway... on to some questions that I have. I would love any input you all can provide. I'm still learning, but hopefully these questions make sense.

My first question is about student loans. UGH! We ran in to some rough times several years ago (hubby was laid off from his job at the same time that I had to take a leave of absence from my job due to being put on bedrest with twins, then some rather harsh medical bills and what was supposed to be a great insurance plan that stuck us with thousands of dollars worth of expenses that should have been covered.... not that you need to know all that). Anyway, we ended up filing chapter 7 bankruptcy. It's been seven years since that happened and now we are back on the right track except I don't know how to handle hubby's student loans. He has a little over $20K that he owes. I think they started coming up due for payment two years ago, but we didn't get the bills and didn't know who to pay what to for quite a while. He did some sort of consolidation earlier this year, but that part doesn't show up on his credit report from what I can tell. All I see is a couple dozen student loans that all show as being 120+ days past due. It looks as if they have never been paid, but he has been paying NCSEAA every month since April. He said that he was told that it wouldn't show everything current until he had been paying on time for a year, but it looks to me like every month he gets hit with at least 7 accounts showing with yet another 120 days past due mark.

So, on to my question... in a couple weeks we should have enough money to pay off at least a couple of the little student loans. Would it be in our best interest (from a credit standpoint) to pay off a few of the small accounts if we have the ability to? Or at least somehow send some money directly to each of those accounts to try to get them caught up? Or would we be better to send some extra money to NCSEAA and wait it out until April to see if something changes then? 

I really want to get this stuff cleaned up as soon as possible because we are getting ready to list our house on the market (amazing enough I was able to get a mortgage to buy a house, even if it is a crappy adjustable rate loan, just a couple years after the bankruptcy). And would like to be able to buy another not long after this one sells (the market here isn't too bad in the range that our house is in). That is not going to be possible with his existing score.

Couple other reasons that his credit isn't great is because his name is not on our mortgage and he only has one credit card (that it's only a $500 limit and currently appears to be maxed, even though we pay it off every month). So, I'm thinking I will add him to my credit cards to see if that helps. That should help if they only carry a low balance, right?  

[Jazzzy]

School loans...Is your husband "rehabbing" his loans? My understanding is that after so much time of on-time payments, the old records will get wiped away. You might want to do some reading on the School Loan forum. Search for those who are or have rehabbed their loans. As to paying some of them off, I would call the lender that he sends money to each month and get their input on what he can and can't do. You say that you will have the money to pay some of the small ones off. Let me ask...do you have an emergency savings account of at least 3 months living expenses? If the school loans are paying off just fine for now, make sure you've got savings to help you when the car breaks down or someone gets sick or someone loses a job. Also, you don't say if you have equity in the home you are selling. If you do, great. If not...and if you are planning to purchase again...then keep some money in reserve for that process.

Credit card...You say that you pay his cc each month. Start doing it BEFORE the statement cuts. Go online and pay it. Then, if a balance shows, be sure to pay that off before the next due date. This process can sometimes result in paying the card twice a month, but you want his card reported as a zero balance each month. If he appears to be maxed out, that is really hurting his score. You may want to post what kind of card he has. Most cards report statement balances to the credit bureaus when the statement cuts, but some report at the end of the month. You want to time your payments to show a zero balance.

Authorized User...Adding him to your cards should help IF...and this is a capital IF...your cards don't show very much of a balance and are older than his average age of accounts. They also need to have a clean payment history. What is his average age of accounts? What is the oldest card you could add him to? Is there a balance on that card? Answering those questions is how you decide which ones to add him to. My husband and I are authorized users on each other's cards, and it does help. Post some of those details, and you'll get advice here.

Congratulations on getting all this under control. It feels good to take pride in how you are handling credit. And it will  make a huge difference in your home-selling-and-buying process. Hang in there, and come back with questions.

[CKinNC]

He might be rehabbing his loans. I'm not even sure if he knows other than that he's paying something the state education authority every month. We will have to call them to see exactly what the deal is, but I'll check out the Student Loan forum too. As far as the emergency savings go, we have a small emergency fund (not three months worth of expenses, but enough to take care of minor auto or home repairs). I also have money that I *could* (I know it's not ideal) borrow against in my 401k. Worst case scenario, we could live off that for a year if we both lost our jobs. So, I haven't worried as much about having a lot of money in my regular savings (we aren't great savers, if the money is easy to get to). We do have equity in our house. It's hard to determine how the house will do once it's on the market, but we can probably get enough to pay off all his student loans and my car - or have a decent down payment for our next house. 

The credit card thing is now beginning to make more sense. We do pay it off every month, but we pay it off in the middle of the month (not long after the statement comes out, but at that point it probably does appear to be maxed every month - even though we are mainly using it because we thought it would help, not because we need to use it). So, beginning immediately we'll only use it minimally and pay it off right before the end of the month. It's a Capital One card. I also have a Capital One card that also appears to be maxed based on what I'm seeing, even though we pay it off every month. I have two other cards (one HSBC and one that was originally Providian, then Wamu, now Chase). They are both in good standing, but the HSBC is only a few months old. 

Thanks for your reply! I'm sure I'll be back.  

[tleventer]

I can't help much but wanted to pass on something hubby said to me this morning.  He said that the Supreme Court will be soon hearing a couple cases involving student loans.  Evidently in the past you were not allowed to include student loans in the discharge of a bankruptcy.  This case MIGHT change that (according to hubby's source, Clark Howard) and if you were in that position (hubby was/is), you might end up getting a check for what you've paid to the student loan since the bankruptcy.  Don't know much more than that.  Good luck!