My Road to Rebuilding, help please!

[Dalton23]

Hello everyone!

I'm new to the forums, but I've been lurking around here for the past few weeks. So it's a pleasure to meet you all, ton's of great info to digest and it's definitely motivated me to right the wrongs of my past. Although I'm still a bit lost and would welcome any of the advice you guys are willing to offer.

Let me first start by saying mine and my wifes credit reports are a mess (dumb mistakes from our youth). Both of our scores are in the 500s. Although here report is much worse, she has about $20,000 in civil judgments and wants to file bankrupcy...which leads me to my first question.

1. Multiple Civil Judgements vs Bankrupcty:

From what I've gathered, for her situation bankruptcy sounds like the best route. I'm just not sure if it's the best route for me? I currently have 3 civil judgments (default judgments smdh), one of which is paid off (capital alliance), the other two I haven't paid on and owe about $3,000 all together (midland funding and a credit union). I'm not sure how to handle these judgments, seem's impossible to vacate them and paying them off will have zero effect on my credit score? Should I just ignore them? Would I be better off including myself in my wifes bankruptcy and just starting with a clean slate (I've read about ton's of people declaring BK and a year later have a credit score in the 650+ range)?

2. Derogatory Information: (3 collections, 3 judgments, 12 late payments)

• 3 collections. 2 of them are from my old college (registrations fee's for $200), yet the collection agency has reported two separate collections to the bureaus...both of them are $100? Before finding this board, I called the collection agency, told them I'd pay the debt if they agreed to remove them from my credit report. They agree to over the phone, when I told them I wanted it in writing, they said they weren't allowed to do that (sounds fishy, so I never paid it) My 3rd collection is from a cable bill and is only on 1 of my reports (credit management lp) I never paid. So far I'm planning on sending these CA's a PFD letter. Is this a good idea? Can anyone suggest a good sample letter?
  
• The next biggest negative on my credit reports involves ton's of late payments, specifically through my student loans. Originally I had about 10 separate direct student loans through the Department of Education, all of them have since been consolidated automatically by Great Lakes and the old loans have been "closed". Yet, there are plenty of 120 day lates showing up on these old closed loans. What's the best way to handle these?
  

3. Rebuilding Plan:

Before I start sending out my PFD's and disputing negatives with the CRA's I'd like some advice from you guys. Although, the first steps I have taken to rebuild my credit, I applied for an unsecured capital one cc and was approved for 2 separate cards (weird huh)...each with a $300 limit. From what I've gathered on here, having 3-4 credit cards is optimal. So my next plan is to get a secured credit card. Any recommendations? How much should I put on it? Also, since I have no auto loan I was considering a "credit rebuilder loan", so I can have both revolving and installment credit on my report.

Thanks for taking the time to read my post! Let me know if I'm on the right path and any advice will be appreciated

[Guest]

Welcome to CB, Seangar!

 

We hope you stick around for a very long time to come!

[Analysis]

Sending out PFD's at this point?

 

Why?

[cv91915]

Don't get an installment loan for its own sake. Your FICO will barely notice.

[Dalton23]

@ rslifkin: Hahah I'm pretty motivated, I think this is the beginning of a beautiful relationship.

 

@SBA: Isn't sending out PFD's the only way to have collections removed from my reports? Two of these collections are pretty recent, about 2 years old.

 

@CV: Yes after doing a little more reading I've realized installment loans aren't that important...and also my student loans are basically installment loans.

 

While researching how to handle these Judgments (I'm in Michigan), I came across this law and I'm having a hard time understanding it. From what I'm reading, satisfying a judgment is grounds for "relief from a final judgment". What exactly does this mean, can I have it vacated in my state if it's satisfied?

Thanks everyone!

 

http://www.law.cornell.edu/rules/frcp/rule_60

 

( b Grounds for Relief from a Final Judgment, Order, or Proceeding. On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons:

(1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59( ;

(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;

(4) the judgment is void;

(5) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or

Edited June 21, 2014 by Seangar

[Analysis]

@ rslifkin: Hahah I'm pretty motivated, I think this is the beginning of a beautiful relationship.

 

@SBA: Isn't sending out PFD's the only way to have collections removed from my reports? Two of these collections are pretty recent, about 2 years old.

 

@CV: Yes after doing a little more reading I've realized installment loans aren't that important...and also my student loans are basically installment loans.

 

Can anyone else comment and help me out on what my best course of action should be?

Sean, you're in good hands. That being said, you have a lot of reading to do!

 

Most everyone here considers PFD to be the very last resort, used only when you've tried the other 25 strategies. That is not an exaggeration, there are that many.

 

In which state do you live?

 

When you say the collections are two years old, do you mean your last payment was approximately two years ago? Or that they were opened two years ago? Credit cards?

 

What balances are reporting?

[Dalton23]

@SBA I updated my post...

 

I agree, I think my brains overloaded from all the reading I've done so far. About to read psychdoc's credit repair thread.

 

Real quick though, what strategy should I use to get these collections off my CR? I was under the impression a letter requesting validation would be pointless at this time.

 

The collections are from my former university about 4 years ago(registration fee's after add/dropping my classes). The debt has since been sold to a collection company. I have never made a payment on this debt. I spoke to them on the phone and they agreed to remove the collections from my credit report if I paid them, I than asked for a letter stating that in writing and they denied me...so I hung up.

 

Jan. 2014 Fico Ex:450

Current Fico Ex: 580 (after a number of negatives fell off and getting some things deleted via disputes)

Edited June 21, 2014 by Seangar

[Analysis]

@SBA I updated my post...

 

I agree, I think my brains overloaded from all the reading I've done so far. About to read psychdoc's credit repair thread.

 

Real quick though, what strategy should I use to get these collections off my CR? I was under the impression a letter requesting validation would be pointless at this time.

 

The collections are from my former university about 4 years ago(registration fee's after add/dropping my classes). The debt has since been sold to a collection company. I have never made a payment on this debt. I spoke to them on the phone and they agreed to remove the collections from my credit report if I paid them, I than asked for a letter stating that in writing and they denied me...so I hung up.

 

Jan. 2014 Fico Ex:450

Current Fico Ex: 580 (after a number of negatives fell off and getting some things deleted via disputes)

I don't know much about student loans, so I'm going to let others answer. I don't even know if the same rules/laws apply to registration fees.

[Dalton23]

Can I get some more input?

[ewitkows1]

I don't think I'd file bankruptcy over 2 judgements only totaling 3k. And while you're correct it won't help your score if you plan to get anything big at any time they will require you to pay them off. I Had 3 on my report at one time and I was still able to buy a house, but I had to have them all paid off. Fyi I had about the same amount of lates and my score topped out at about 660. I would send out goodwill letters to all of the accounts that you have lates on, if you can't get the judgements vacated, pay them or eventually they will come back to haunt you. Some people have had luck deleted addresses associated with them and disputing them.