Paying off bad debt

[jerelj]

In the past year, I have built up a great credit history. Sounds good, not really. I have one installment account and two secured credit card accounts that I pay on time every month. I dont want to get any more cards or loans because I dont want to get myself back into debt I cant afford. I just recently applied for a home loan thinking that since I have this great recent credit history, that would be enough. I was wrong! I have 13 collections account dating back to 2007 thru Jan 2012. I was told by several lenders I have to pay these off or settle them. I am willing and WILL do this but here is my question:

 

Once I settle these charge offs and collection accounts, will my score dramatically drop and if it does how long will it take to bounce back since I am paying all my new debt on time before the due dates? Will it take another year to get me VA mortgage ready. Right now my middle score is a 600. I want to get pass a 640 but like I said I pay all my new bills on time. Has anyone experienced this and how long did it take your score to improve? On average, what will my score drop if I pay these 13 debts off in the same day? How much will my score increase each month since I am paying my bills on time?

[futurehomeowner?]

no one can answer how much your score will move but if you not do a pay for delete then your score will almost definitely go down.

 

also most lenders require at least 12 months of no missed payments in order to qualify for a mortgage so if you have a collection from 2012 you'll probably need to get that completely removed in order to qualify

[jerelj]

I have 12 months of no missed payments. The collections is from 2010, but the last time it was reported was in January of 2012. I plan on paying off every negative item. But I need to make sure I say "pay for delete" right? Do most collections agency settle and do a pay for delete on a settlement? The collections agencies are LVNV Finding, Midland Funding, IC Systems and Boulder. Anyone familiar with how I should approach these collections agency to offer a pay for delete?

[ICANHASMUNY?]

LVNV Funding and Midland are Junk Debt buyers ( JDB's) ., not collection agencies

 

the original creditors (OC's ) have sold the debts and any money you pay them will not go to the OC's

 

13 collection accounts? what's your credit score?

 

now that you have applied for a mortgage these CA's will know that you have money for down payment and most likely will be in contact.

 

I suggest you read the newbies section and pinned topics

[jerelj]

Yes, 13 collections account is correct. All are old cell bills and cable bills. None are for credit cards and installment accounts. After I moved in 2005 I didnt pay my last cable bill. A couple family members had cell phones in my name and didnt pay so I owe Tmobile, Att, and Verizon. I also owe comcast and Uverse. I have learned my lesson about leeting family get things in my name. But my total debt is not that much even though its 13 accounts. Its with Stellar Recovery, Merchants, IC Systems, Bouldr, LVNV and Midland. Just because I applied for a mortgage doesnt mean I have a down payment. IJS When I am credit ready I am using the VA loan, which is no down payment. I dont care if the calls start back and I dont mind paying balances in full, I just dont want to. Out of the creditors I listed, are all junk debt buyers? Im just trying to correct the mistakes I made, not looking to be judged. Im doing the right things now with my new accounts by paying all my bills on time before the due dates and I plan on keeping in that pattern. Everyone goes through something, my debt isnt even worth $5000. Just did the math. Before it was just an estimate and I went over by thousands.

[cinnamngrl]

Yes, 13 collections account is correct. All are old cell bills and cable bills. None are for credit cards and installment accounts. After I moved in 2005 I didnt pay my last cable bill. A couple family members had cell phones in my name and didnt pay so I owe Tmobile, Att, and Verizon. I also owe comcast and Uverse. I have learned my lesson about leeting family get things in my name. But my total debt is not that much even though its 13 accounts. Its with Stellar Recovery, Merchants, IC Systems, Bouldr, LVNV and Midland. Just because I applied for a mortgage doesnt mean I have a down payment. IJS When I am credit ready I am using the VA loan, which is no down payment. I dont care if the calls start back and I dont mind paying balances in full, I just dont want to. Out of the creditors I listed, are all junk debt buyers? Im just trying to correct the mistakes I made, not looking to be judged. Im doing the right things now with my new accounts by paying all my bills on time before the due dates and I plan on keeping in that pattern. Everyone goes through something, my debt isnt even worth $5000. Just did the math. Before it was just an estimate and I went over by thousands.

PS. Telecom has a federal statute of limitations of 2 years

[MonkeyBelly]

Not a lot of judging here. Seriously.

 

Start reading the newbie section like its your part time job. Make sure you select "show all pinned topics."

[ICANHASMUNY?]

I wasn't judging ... I had a JDB account for well over 4X that amount.

 

 

it's just that you shouldn't have made any mortgage apps until your reports had been cleaned up.

 

now the CA's will see the mortgage inquires and assume you have $$$ to pay in full.

 

and you've lost any leverage with the CA's because they know you are trying to buy a house.

 

It's a Newbies mistake, ( I made my own back when also.... )

 

that's why a suggested that you read the newbies section and the pinned topics on credit repair before you attempt anything further.

[ICANHASMUNY?]

 

Yes, 13 collections account is correct. All are old cell bills and cable bills. None are for credit cards and installment accounts. After I moved in 2005 I didnt pay my last cable bill. A couple family members had cell phones in my name and didnt pay so I owe Tmobile, Att, and Verizon. I also owe comcast and Uverse. I have learned my lesson about leeting family get things in my name. But my total debt is not that much even though its 13 accounts. Its with Stellar Recovery, Merchants, IC Systems, Bouldr, LVNV and Midland. Just because I applied for a mortgage doesnt mean I have a down payment. IJS When I am credit ready I am using the VA loan, which is no down payment. I dont care if the calls start back and I dont mind paying balances in full, I just dont want to. Out of the creditors I listed, are all junk debt buyers? Im just trying to correct the mistakes I made, not looking to be judged. Im doing the right things now with my new accounts by paying all my bills on time before the due dates and I plan on keeping in that pattern. Everyone goes through something, my debt isnt even worth $5000. Just did the math. Before it was just an estimate and I went over by thousands.

PS. Telecom has a federal statute of limitations of 2 years

some states have ruled 4 year SOL applies under the UCC - goods and services.

[cinnamngrl]

 

 

Yes, 13 collections account is correct. All are old cell bills and cable bills. None are for credit cards and installment accounts. After I moved in 2005 I didnt pay my last cable bill. A couple family members had cell phones in my name and didnt pay so I owe Tmobile, Att, and Verizon. I also owe comcast and Uverse. I have learned my lesson about leeting family get things in my name. But my total debt is not that much even though its 13 accounts. Its with Stellar Recovery, Merchants, IC Systems, Bouldr, LVNV and Midland. Just because I applied for a mortgage doesnt mean I have a down payment. IJS When I am credit ready I am using the VA loan, which is no down payment. I dont care if the calls start back and I dont mind paying balances in full, I just dont want to. Out of the creditors I listed, are all junk debt buyers? Im just trying to correct the mistakes I made, not looking to be judged. Im doing the right things now with my new accounts by paying all my bills on time before the due dates and I plan on keeping in that pattern. Everyone goes through something, my debt isnt even worth $5000. Just did the math. Before it was just an estimate and I went over by thousands.

PS. Telecom has a federal statute of limitations of 2 years

some states have ruled 4 year SOL applies under the UCC - goods and services.

yes, it is a federal statute and the cases are filed in state court. But, telecom doesn't often sue, (though i have begged) i think because of this.

 

[ICANHASMUNY?]

not to get too far off subject, but it is relevant because OP stated that most of the accounts were phone bills;

 

this was the Texas Federal court FDCPA case regarding threats to sue was a violation because of the federal 2 year SOL - the court ruled it was not a FDCPA violation because the Texas 4 year SOL applied.

 

and since this was a Federal Circuit Court of Appeals court ruling affirming the District court decision, every CA will use it to argue that the applicable state SOL applies to phone bills, not Federal.

 

 

http://scholar.google.com/scholar_case?case=17232337418788038264&hl=en&as_sdt=2&as_vis=1&oi=scholar

 

 

the district court noted that § 415(a) applies only to "actions at law by carriers for recovery of their lawful charges" (emphasis added), and concluded that "lawful charges" refers to charges that are based on "tariffs," or rates that have been filed with the Federal Communications Commission ("the FCC").

 

All carriers were formerly required under the FCA to file tariffs, prior to amendments passed by Congress in 1993 and 1996.

 

Second, the district court held that § 415(a) does not preempt statutes of limitations under state law in actions regarding matters such as billing practices and disputes, which are at issue in this case.

 

The district court concluded that § 415(a) applies only to actions involving federally regulated matters, including the reasonableness of rates and phone companies' entry into the market, and not to most other matters, which are exclusively governed by state law.

[pjmaxwellian]

Jerelj, there is no judging here because most of us have been or are still there. The advice about reading the newbie section and pinned topics is given because you will get a better understanding of how things work and what to expect. Read as much as you can before you do anything.

 

First step if you haven't already done so, is to get all 3 reports from annualcreditreport.com or the individual CRAs. You really need to get your full reports and get a good understanding of how things are reporting. It will help avoid mistakes that can unnecessarily cost you. This also helps to serve as a base from which you can identify any further innacuracies or misreporting once you start on repairing. I will warn you, after you start getting into it, utter confusion will set in. This is temporary, because you will get lots of help.

[gooddfella]

One thing I can tell you to do is keep any voice mails the collectors leave you. Thats the advice the attorney I've been trying to hire gave me. If they violate something in the voice mail, which is common, then you can sue them and they will offer to drop the debt and delete. I'm actually not answering any collection calls hoping they'll leave a voice mail but a lot of times they dont. But since you've applied for a mortgage maybe they'll call you more often.

[cinnamngrl]

not to get too far off subject, but it is relevant because OP stated that most of the accounts were phone bills;

 

this was the Texas Federal court FDCPA case regarding threats to sue was a violation because of the federal 2 year SOL - the court ruled it was not a FDCPA violation because the Texas 4 year SOL applied.

 

and since this was a Federal Circuit Court of Appeals court ruling affirming the District court decision, every CA will use it to argue that the applicable state SOL applies to phone bills, not Federal.

 

 

http://scholar.google.com/scholar_case?case=17232337418788038264&hl=en&as_sdt=2&as_vis=1&oi=scholar

 

 

the district court noted that § 415(a) applies only to "actions at law by carriers for recovery of their lawful charges" (emphasis added), and concluded that "lawful charges" refers to charges that are based on "tariffs," or rates that have been filed with the Federal Communications Commission ("the FCC").

 

All carriers were formerly required under the FCA to file tariffs, prior to amendments passed by Congress in 1993 and 1996.

 

Second, the district court held that § 415(a) does not preempt statutes of limitations under state law in actions regarding matters such as billing practices and disputes, which are at issue in this case.

 

The district court concluded that § 415(a) applies only to actions involving federally regulated matters, including the reasonableness of rates and phone companies' entry into the market, and not to most other matters, which are exclusively governed by state law.

thank you

[jerelj]

I just sent debt validation letters! the wait begins

[jerelj]

Also, these collectors dont call or write me. I wonder why. I only knew about them because I pulled my report and use privacy guard for my monthly credit report and scores from all three CRA's. The last time collectors have called me have been years ago, atleast 2 but might be closer to 3. So being that it has been that long and I haven't requested debt validation 3 years ago, do you this method will work for me? If 30 days have passed and they havent replied, can I still write the CRA to have the items deleted, or because I am out of the 30 day window, I am out of luck?

 

Hope I worded it right.

 

*Sorry for that "being Judged" comment. My wife post under my name at times and she can be a little sensitive when not needed.