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supercop360

Credit Help needed please!!!!!

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I would think that yes while your score may go up some right now, in the long run it is going to be better for you if your debts are paid and you don't have that "Paid For Less Than Full Amount" or "Settled". If you settle your debts they will not report as "Paid as agreed" or "Paid in full".

 

At least while in a payment program you are re-establishing positive trade lines and you may have more in your favor when you eventually ask the creditors for goodwill adjustments on the lates.

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If the OC gives you a payment plan, do not settle. You will actually have a charge off of the amount that goes unpaid when you settle for less than owed. that charged off amount may be sold to a junk debt buyer and then the whole process will start over again. Saving money is great, but if you can meet the payment plan they offer you, you should do it. Your score will not go up immediately. You should not worry a lot about your score at this point, it is going to bounce around while you take care of these problem debts. No need to constantly spend money on scores, get discouraged, and, as a result, change your mind (which would be screwing up completely).

 

If you cannot meet the terms of the repayment plan, it changes things, and I would give you different advice - But if you can, then you really should do it.

 

The student loans always take priority.

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I would think that yes while your score may go up some right now, in the long run it is going to be better for you if your debts are paid and you don't have that "Paid For Less Than Full Amount" or "Settled". If you settle your debts they will not report as "Paid as agreed" or "Paid in full".

 

At least while in a payment program you are re-establishing positive trade lines and you may have more in your favor when you eventually ask the creditors for goodwill adjustments on the lates.

 

 

If the OC gives you a payment plan, do not settle. You will actually have a charge off of the amount that goes unpaid when you settle for less than owed. that charged off amount may be sold to a junk debt buyer and then the whole process will start over again. Saving money is great, but if you can meet the payment plan they offer you, you should do it. Your score will not go up immediately. You should not worry a lot about your score at this point, it is going to bounce around while you take care of these problem debts. No need to constantly spend money on scores, get discouraged, and, as a result, change your mind (which would be screwing up completely).

 

If you cannot meet the terms of the repayment plan, it changes things, and I would give you different advice - But if you can, then you really should do it.

 

The student loans always take priority.

Thanks for the great advice guys. Just wondering though I'm worried that I'll never be able to pay down my chase card balance of $2700 and Bank of America balance now of $1184. I am a college student and only make about $800 a month. I have my car insurance to pay for which is $100, my cell which is $35.00, and food expenses which is about $150/month, gas about 120/month which would leave me about 400 extra per month but I am not including my expenses of going out. If I go current with Chase my minimum monthly plus 29% APR would be $196/month which would take 13 months to pay off, my Bank of America account would be with 25%APR be $103/month (this would be 11months to pay off). Every month I would be paying $299 just to pay down my deliquent balances of Chase and Bank of America. Then I guess 1 year from now when they are all paid down what will the accounts say then "Paid in full" and then I goodwill for them to remove lates? What if I settle and ask for Paid in full status to be put on, would this allow my unpaid portion of the debt to not to be sold later on to a junk debt buyer? I remember when I was speaking to the Chase representative she told me she could take off some late payment remarks and that my account will say "settled", so if later on a junk debt buyer showed up calling for the unpaid portion could I not just write to the CRA's and show that the account is settled and there is no more debt from that account canceling out the junk debt buyer and get it erased from my report? I want to use the $3884 that I would pay to keep these accounts current to pay off my Sallie Mae loan, and have the Chase and Bank of America say either "paid in full" or "settled" and use that extra money to pay off my Sallie Mae loan. This to me would seem to benefit my credit report and score much quicker than trying to keep current. I already have a Citi card that is my fathers under my name with a limit of $5000 that has been paid on time every month since 1993 and I will reissue my Walmart card($350 limit) and Sams Club card ($620 limit) which are both positive tradelines with $0 balances and use those as my primary credit cards and make payments on time each month. Would this not greatly improve my score than just going the current route please help I need to decide by tomorrow since tomorrow is the deadline for the minimums to go up again on these two cards.

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If you are a college student why are you trying to repay your student loans right now?

 

Put them in deferment, they should be deferred anyway as long as you are a student.

 

As someone else mentioned, don't worry about your score right now.

 

If you are determined to settle, then settle your debts, but try to include in the settlement that they cannot sell the unpaid amount to a JDB - cuz if they do then this whole process will start all over again.

 

Most payment plans with creditors will set your account back to current after 2-3 months of payments. Are you saying they have told you that you will have to pay $196 and $102 each month for 12 months? Or do you pay those amounts for 3 months or so just to bring you back under your credit limit and then go to normal payments after that? That's been my experience with credit card companies, get the card under the limit, then go back to my normal minimums.

 

How much cash do you have on hand right now?

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If you are a college student why are you trying to repay your student loans right now?

 

Put them in deferment, they should be deferred anyway as long as you are a student.

 

As someone else mentioned, don't worry about your score right now.

 

If you are determined to settle, then settle your debts, but try to include in the settlement that they cannot sell the unpaid amount to a JDB - cuz if they do then this whole process will start all over again.

 

Most payment plans with creditors will set your account back to current after 2-3 months of payments. Are you saying they have told you that you will have to pay $196 and $102 each month for 12 months? Or do you pay those amounts for 3 months or so just to bring you back under your credit limit and then go to normal payments after that? That's been my experience with credit card companies, get the card under the limit, then go back to my normal minimums.

 

How much cash do you have on hand right now?

I have only $700 on hand now. I will have to pay $100 on Chase and $80 on Bank of America for the next 3 months to get to current then my estimates were $196/month for Chase this includes the normal minimum plus the interest tacked on each month from the APR which would be about $65, my normal minimum for Chase is $131/month if I was under the limit plus the $65 from interest/month, and then I just divided the $2700 balance with the $196 and got 13 months for the Chase card and I did the same thing for the Bank of America account as well my normal minimum would be $74/month plus $29 from 29%APR would allow me to pay it off within 11 months. To get current on both accounts I would pay only $75/month on Chase until July, and $65/month on Bank of America. I dont know which option to do I am not going for either yet just weighing my options and seeing what would be best for me, I do plan on buying a car soon and would need to take out a loan for at least $7000, since I am selling my car soon too which would get me about $2000 for it. I am finding your help very informative and I will take your opinion and others and have a more guided approach to this whole mess.

Edited by supercop360

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The Chase card limit was $2000, now after lates and interest it is at $2700 and the account is closed. The Bank of America card limit was $800 and now is $1182 and this account is also closed. Now keeping current would just show on my report that I am paying on time on a closed account, just dont understand the long term effects of keeping current and what other benefits will this give me in repairing my credit report since I already have 3 positive tradelines. Will paid as agreed be that bad.

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>>>>Will paid as agreed be that bad.<<<<

 

I think what you are missing is this...when you settle your debts will not be listed as PAID AS AGREED, they will show as SETTLED FOR LESS or just PAID.

 

Then you also run the risk of the remainder, not paid in settlement, being sold to a third party collector. You will also receive a 1099 (I think thats the right form) and you have to claim the unpaid amount as income on your tax return - you will have to pay taxes on the amount not repaid.

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Exactly. settled is "paid less than owed" and the balance will most likely be sold to a jdb. You can send anything you want to, they will still sell it. Your account will NOT show paid as agreed. Maybe paid, and even then, there will be a notation that you paid less than you owed. They'll get it in there, trust me.

 

If they all told the truth up front, obeyed the laws, and did what they promised, there would be no reason for a board like this. ;) We are giving you the best advice based on the information you have made available. You didn't make it clear that your could not pay the payment plan as it is. If you can negotiate a settlement, get it in writing, with the most favorable terms you can negotiate, and don't agree to anything you cannot actually do come hell or high water. Assume that you will be paying back student loans soon. Keep everything because you will be fighting this later, when you do have money and a job and want to get credit. the collectors will start crawling out of the walls to get the unpaid portion of the debt.

 

You will also be resetting the SOL most likely, so get that 1099 and pay the taxes, then keep all the documentation for later.

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Thanks for the help Breeze and Whoneedscredit I will not settle and will make payments to get my Chase and Bank of America to current. I have the money just got to start snowballing now. What can I do about the APR to lower it? Also could I give Paypal a call and see if they can get back the account (even though it is charged-off) so I can make it current?

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If I settle my Bank of America the rep told me only amounts greater than $600 will be reported to IRS, so would a little amount such as 400 be sold to a jdb? I just hate to pay all the interest they added on, is there a way to negotiate when trying to get a deliquent account current like APR? Any links.

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If I settle my Bank of America the rep told me only amounts greater than $600 will be reported to IRS, so would a little amount such as 400 be sold to a jdb? I just hate to pay all the interest they added on, is there a way to negotiate when trying to get a deliquent account current like APR? Any links.

 

I'm going to defer to the experts around here on the APR question.

 

We all hate to pay the interest and fees, but the reality is when we fall behind it gets tacked on, its in the contracts we sign when we get the cards.

 

If you had contacted them when you first lost your job you may have had a shot at getting the interest lowered. Now you're stuck cleaning up.

 

Believe me, I feel for you, cuz I did the same thing. I'm biting my tongue and paying it - I don't like, but I'm doing it.

 

I think that yes it would be possible for the $400 to be sold to a jdb. BOA just wants their money, if you settle they are not getting all of their money. You can try to protect yourself by getting it in writing from BOA that they will not sell the remaining balance, it may work.

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Yea I'm going current on the accounts. Thanks for the advice wondering though when would I be able to start goodwill letters and other forms of disputing to get the negatives deleted? After I go current or when it is paid in full? I was reading Doc's transcripts and didnt really understand when I could write a nutcase letter (since i dont think I can goodwill my way out of 120+ days late)? So when would be the best time to send nutcase letters out to Chase and Bank of America?

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I personally wouldn't attempt either until I had at least 6-12 months of on time payments reporting, or they were paid in full.

 

You're asking for goodwill, I don't think they would be apt to grant it if you were still behind and didn't show an honest effort of catching up.

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So if I pay of both within the next 3 months I could write them a goodwill letter immediately or must wait a little bit? Also both have 120+ days late reporting would I even have any shot at goodwill being successful? Doc's transcripts says that nutcase letters are the way to go on that. Please advise me and thanks so far for your input really appreciated.

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This is something you are pretty much going to have to decide for yourself at this point. If you make the move to settle no one knows for sure what will happen, how it will report, what will and won't be sold. You have to weigh the risk vs possible reward and see if it is worth it to you. You know what you feel you can save by trying to settle, we have warned you of the possible pitfalls and danger to your credit.

 

Ultimately you have to make that call. Always assume the worst however when dealing with creditors. If the paper can be sold, what motivation do they have not to sell it? The more negative the information they report, the more likely they are to get paid in their eyes. Goodwill is by no means guaranteed, and often falls on deaf ears.

 

In my opinion your score isn't going to change much at all in the near future either way. You need to look long term and be less concerned with today.

 

Just my opinion.

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So I have about 15 years of credit history since my dads account is under my name since 1993. I had my Bank of America that was opened in September 2005, Chase which was opened in August 2006, and my Paypal opened December 2006. I made payments on time for 2 years and 1 month for Bank of America, 1 year 3 months for chase, and 1 year for Paypal. The 1993 account is Citi bank card and was paid on time since 1993. Its my understanding that the people who have the most success repairing their credit are the ones that have had ignored their credit for years and all the accounts are in collection agencies. I guess for newly bad credit our only hopes are to wait it out and goodwill, cause we can't really negotiate like the people who have had bad credit for years, so my 4 months of non pay will turn into years of repair. Just gives me hopes of getting into the mid 600s a few months from now hearing all the stories only to realize all their successes were from collection agencies and that I will not have the same quick result.

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Yea I'm going current on the accounts. Thanks for the advice wondering though when would I be able to start goodwill letters and other forms of disputing to get the negatives deleted? After I go current or when it is paid in full? I was reading Doc's transcripts and didnt really understand when I could write a nutcase letter (since i dont think I can goodwill my way out of 120+ days late)? So when would be the best time to send nutcase letters out to Chase and Bank of America?

 

I'm not sure a nutcase letter is a good approach to take with a creditor who is, and has been, working with you. Maybe my whole understanding of nutcase letters is wrong, but the impression I get is that you use those to show CA's (usually) that you are well-informed of the law and are itching to file a lawsuit. IMO, not the best step to take when you're really just asking for a favor. You can't sue Chase of BofA because they wouldn't do a goodwill removal of your (valid) lates. They haven't violated any laws.

 

I would try goodwill in 6-8 months, and every 3-6 months thereafter. If you bug 'em enough, they may cave. But I don't think nutcase is going to get you any goodwill, especially when they know it's a frivolous threat. I think nutcase is generally reserved for pain-in-the-flowers CA's who refuse to properly validate debts.

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Yea I'm going current on the accounts. Thanks for the advice wondering though when would I be able to start goodwill letters and other forms of disputing to get the negatives deleted? After I go current or when it is paid in full? I was reading Doc's transcripts and didnt really understand when I could write a nutcase letter (since i dont think I can goodwill my way out of 120+ days late)? So when would be the best time to send nutcase letters out to Chase and Bank of America?

 

I'm not sure a nutcase letter is a good approach to take with a creditor who is, and has been, working with you. Maybe my whole understanding of nutcase letters is wrong, but the impression I get is that you use those to show CA's (usually) that you are well-informed of the law and are itching to file a lawsuit. IMO, not the best step to take when you're really just asking for a favor. You can't sue Chase of BofA because they wouldn't do a goodwill removal of your (valid) lates. They haven't violated any laws.

 

I would try goodwill in 6-8 months, and every 3-6 months thereafter. If you bug 'em enough, they may cave. But I don't think nutcase is going to get you any goodwill, especially when they know it's a frivolous threat. I think nutcase is generally reserved for pain-in-the-flowers CA's who refuse to properly validate debts.

So if you pay on time and get current then your just stuck with the hoping to goodwill the late remarks thats it? Seems like I should of just let them be charged off and battle it that way!! Just doesnt seem right that I'll pay my whole balance plus accrued interest, when bargaining chips are left for the ones that did not try to do anything for their accounts until years later and they pay half and get deletion of it all. I guess I'll keep chugging along, tell me why keeping current on two tradelines that have been closed and have 120+ days late on each is worth it, when I could wait one more month and have it charged off and then battle it out then?

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The damage of the lates will diminish as time passes. If the creditors are willing to keep the accounts open you are adding to the age of your accounts.

 

If you let them charge off you generally have multiple negative marks on your credit. You have one for the charge off from the OC, and then the CA starts reporting for the balance as well. All the while its more than likely increasing in size due to interest. If its a substantial amount and I'd say your debt qualifies (I have been sued on less) your likely hood of being sued is greatly increased. If you fail to appear in court, or lose, you will then have a judgment stuck on your report for 7 years from the date the judgment was handed down. So you waited however many years with the Charge off and CA beating you down on your credit report, then guess what, welcome to another 7 of a judgement.

 

I had a $1400 balance from a CC that I allegedly had when I was about 18-22. I was served and sued just last year on triple this amount. Now I was fortunate and able to win my case, but it took a lot of time and support to do so.

 

I just hate to see you head down that path. Its not all as simple as waiting and it disappears. It can and often still does come to bite you. Can you beat it out? Yes you can, is it a guarantee, no. There isn't an easy road to take out here.

 

There is no easy answer. Its not a "fair" system, and unfortunately if you make a mistake, no matter how much positive history you have its neither quick or easy to clear your name again.

 

Its not all doom and gloom. But a lot of the deletions you see have come for people after years of being unable to get any credit, denied on loans of all sizes, and living of cash for years because they can't get a checking account. That suffering isn't always included in the posts that you see saying "I just got 4 negative trade lines deleted!"

 

You can only do what you can afford to. If you absolutely can't afford to pay it, then maybe trying to settle is your best option. I think overall what will be best for your credit is to keep paying on the debt. Whats best for your life circumstances might not jive.

 

I hope you don't take my comments as trying to come down on you, I see a lot of me in your posts. I wouldn't wish my past to repeat itself on anyone.

Edited by The Hamburglar

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I received a letter from a collection agency in Maryland saying that I have 30 days to validate the debt or else it will be considered valid. The date on the letter is 3/20/08 and I just found it piled under my dad's mail since me and him have the same name he always takes my mail thinking it is his. Well should I write a validation letter and send it out today even though its past the 30 days since today is 4/29/08. Will I be able to be sued or make this problem worse than it is, so far no collections have appeared on my report yet but I am supposing soon it will be with this letter that I received. Please help I need to know what to do today!!! thanks

Edited by supercop360

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