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How should I handle my charge offs?

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Heya, found this forum through a Reddit recommendation and have been thumbing through it for the past few days, and wanted to thank you all for the information you all post! I'm still kind of new to this, so I'm trying to best figure out how to handle my situation and could use some advice.

 

The wife and I are thinking of home ownership in the next year or two so i'm trying to fix my side of the credit now. I THOUGHT I had several things in collections (frankly I should), but according to my credit reports from the big 3, I don't. Hell, I had 7 negative accounts back in january, but I checked again with annual credit report and I currently just have 3 accounts with negative marks. There's a 4th card that Experian and TU report, which is my Discount Tire (SYNCB/CAR CARE DISC TIRE), BUT it reports it as lost/stolen for some reason, even though I never did such a thing. REGARDLESS, I'll deal with that one if and when I need to (unless you have advice you'd like to give on that). I want to focus on the 3 that show up on all 3 credit reports.

 

I'm not sure which Credit Report to go with as far as figuring out dates and stuff, because they're all kind of slightly different, so I'll mainly go with Experian:

 

Amex -

Payment Status - Charged Off

Status Updated - September 2019

Balance - $559

Past Due Amount - $352

Balance Updated - September 18 2020

(Equifax) Delinquency First Reported - Sep 01, 2019

(Trans Union) Estimated month and year that this item will be removed - 06/2022

 

Chase Sapphire -

Payment Status - Charged Off

Status Updated - April 2019

Balance - $5,693

Past Due Amount - $5,693

Balance Updated - April 22 2019

(Equifax) Delinquency First Reported Apr 01, 2019

(Trans Union) Estimated month and year that this item will be removed - 12/2020

 

Chase Amazon -

Payment Status - Charged Off

Status Updated - April 2019

Balance - $730

Past Due Amount - $730

Balance Updated - April 22 2019

(Equifax) Delinquency First Reported Apr 01, 2019

(Trans Union) Estimated month and year that this item will be removed - 09/2025

 

I'm not sure why my sapphire says it'll be removed (allegedly of course) by the end of this year, because it's a higher debt and it wasn't paid the same time the chase amazon card wasn't, so that's where i'm confused. In fact, i'm just very confused in general, because I know I had more cards than this that I defaulted on unfortunately. I know you all heard every single "life was difficult" story, so please don't take my lack of elaborating as not caring about my mistakes, because I do deeply care; i'd just rather not bore you all with the same story you've heard before.

 

SO

 

I guess my question would be what is the best way of going about dealing with these 3 negative marks? I've gotten phone calls and letters for years and just never answer or respond to them. In fact, i'm sitting on a letter from Nationwide Credit in regards to my Chase Sapphire card from a couple weeks ago.

 

Do I even bother dealing with letters from Nationwide Credit for example? Should I ignore those completely and go straight to the Original Creditors? If so, how do I even start that conversation? I'm in Illinois so I know the SOL is 5 years, which is why some of the "Estimated time this item will be removed" is confusing to me. 

 

Anyways, thank you all for your time! If you need more info or if I asked in the wrong place, I'm deeply sorry! I just don't know where to start.

 

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Also, how old were the other four COs? Any chance those will pop back on? Lenders will pull reports from all three major bureaus. Also the SOL has nothing to do with removal from a credit report. This is governed by a 7 year period from date of first major delinquency per the FCRA.

Edited by CreditCurious20

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Are you looking at online reports, or actual paper copies mailed to you from each CRA? You need to be working off the paper copies of the reports before starting anything.

 

Assuming that the information for three accounts accounts you posted came from the proper reports...

 

Amex: For such a small amount it’s worth paying in full. They have a program where you pay the full amount due and you don’t end up getting blacklisted by them. 
 

Chase Sapphire: An estimated date of deletion of 12/2020 suggests that DOFD was 12/2013. If that’s correct, you’re most likely past the SOL for being sued. You should check your state’s laws though. Also, since you’re within a few months of deletion, you could either do nothing and let it fall off the reports, or ask the CRAs for early deletion. 
 

Chase Amazon: Estimated date of deletion of 9/2025 suggests DOFD roughly two years ago. Most likely within the SOL for being sued. You need to see exactly how it’s being reported on the paper reports. If the debt has been sold, a PFD sounds like the way to go for a small balance. 

 

As for the accounts that you say disappeared from your reports, there are two likely scenarios. First, if you defaulted seven years ago, the delinquency aged off. If it has been less than seven years, it’s possible that the debt has been sold by the OC and could reappear if a CA decides to report. Not to sound like a broken record, but... paper copies of your reports will be the place to start.

Edited by DPB

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17 hours ago, PS2020 said:

Amex -

Payment Status - Charged Off

Status Updated - September 2019

Balance - $559

Past Due Amount - $352

Balance Updated - September 18 2020

(Equifax) Delinquency First Reported - Sep 01, 2019

(Trans Union) Estimated month and year that this item will be removed - 06/2022

Pay in full. Like, yesterday. They are forgiving once paid and some time has passed.

 

I'm actually surprised they haven't mentioned the Optima program with you.

17 hours ago, PS2020 said:

Chase Sapphire -

Payment Status - Charged Off

Status Updated - April 2019

Balance - $5,693

Past Due Amount - $5,693

Balance Updated - April 22 2019

(Equifax) Delinquency First Reported Apr 01, 2019

(Trans Union) Estimated month and year that this item will be removed - 12/2020

If DOFD is 2013 as suggested, and SOL in Pritzkerville is 5 years, you cannot be garnished because you cannot be sued. You cannot receive a judgment because you cannot be sued. Yeah, the CA or JDB can make your life hell for two years, but beyond that, just wait it out. Chargeoffs hurt less over time.

 

You WILL have to eventually pay Chase back to get in again, I'm pretty sure.

17 hours ago, PS2020 said:

Chase Amazon -

Payment Status - Charged Off

Status Updated - April 2019

Balance - $730

Past Due Amount - $730

Balance Updated - April 22 2019

(Equifax) Delinquency First Reported Apr 01, 2019

(Trans Union) Estimated month and year that this item will be removed - 09/2025

 

This is new, clearly. Pay it off to lower overall utilization and let the sting wear off in time.

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5 hours ago, Toast73 said:

If DOFD is 2013 as suggested, and SOL in Pritzkerville is 5 years, you cannot be garnished because you cannot be sued. You cannot receive a judgment because you cannot be sued. Yeah, the CA or JDB can make your life hell for two years, but beyond that, just wait it out. Chargeoffs hurt less over time.

 

Not true. You can still be sued. Any JDB that wants to pay the ceiling fee can file. You would need to file a response that the debt is past SOL and have the legal action dismissed.

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I would suggest paying off the two small ones; $500 isn't worth a legal battle. As for the Chase account, you need to clarify those numbers for us. What is the actual date of default? That would be the date of your last full payment on the account plus 30 days. If they first reported the delinquency in April 2019, a fall off date of 12-2020 makes no sense. Prob a typo, which somebody will eventually correct.

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12 hours ago, CreditCurious20 said:

Also, how old were the other four COs? Any chance those will pop back on? Lenders will pull reports from all three major bureaus. Also the SOL has nothing to do with removal from a credit report. This is governed by a 7 year period from date of first major delinquency per the FCRA.

 

I don't remember how old they were, but they definitely weren't old enough to be dropped off my credit report like that. My credit troubles started in 2016

 

11 hours ago, DPB said:

Are you looking at online reports, or actual paper copies mailed to you from each CRA? You need to be working off the paper copies of the reports before starting anything.

 

Assuming that the information for three accounts accounts you posted came from the proper reports...

 

Amex: For such a small amount it’s worth paying in full. They have a program where you pay the full amount due and you don’t end up getting blacklisted by them. 
 

Chase Sapphire: An estimated date of deletion of 12/2020 suggests that DOFD was 12/2013. If that’s correct, you’re most likely past the SOL for being sued. You should check your state’s laws though. Also, since you’re within a few months of deletion, you could either do nothing and let it fall off the reports, or ask the CRAs for early deletion. 
 

Chase Amazon: Estimated date of deletion of 9/2025 suggests DOFD roughly two years ago. Most likely within the SOL for being sued. You need to see exactly how it’s being reported on the paper reports. If the debt has been sold, a PFD sounds like the way to go for a small balance. 

 

As for the accounts that you say disappeared from your reports, there are two likely scenarios. First, if you defaulted seven years ago, the delinquency aged off. If it has been less than seven years, it’s possible that the debt has been sold by the OC and could reappear if a CA decides to report. Not to sound like a broken record, but... paper copies of your reports will be the place to start.

 

I'm looking at the online reports. There's a difference between those and the paper copies? I did my reports through the annual credit report website.

 

As far as Amex goes, I should have mentioned (I'll update my post to reflect this), I WAS on a payment program with them, however I changed banks, and they wouldn't let me switch over the account where the money gets pulled from for some reason, so I basically told them "if you don't want to switch the bank accounts over then you don't want my money then, bye".

 

As far as the chase accounts go though, that's what has me confused; Upon researching, October 2018 was the first month I defaulted (last payment was September 2018) for both chase cards.

 

And no worries about sounding like a broken record; i'm just confused as far as the reports goes because I didn't know there was a difference between the PDF the site gives you and the paper version. How do I go about getting the paper versions?

 

7 hours ago, Toast73 said:

Pay in full. Like, yesterday. They are forgiving once paid and some time has passed.

 

I'm actually surprised they haven't mentioned the Optima program with you.

If DOFD is 2013 as suggested, and SOL in Pritzkerville is 5 years, you cannot be garnished because you cannot be sued. You cannot receive a judgment because you cannot be sued. Yeah, the CA or JDB can make your life hell for two years, but beyond that, just wait it out. Chargeoffs hurt less over time.

 

You WILL have to eventually pay Chase back to get in again, I'm pretty sure.

This is new, clearly. Pay it off to lower overall utilization and let the sting wear off in time.

 

I was on a payment plan with Amex, but I forgot to mention there was a whole thing that lead to me stop paying them. I laid it out in the response above this one, but i'll edit the main post to reflect what happened.

 

The DOFD is definitely not 2013 though, so I'm not sure what happened there. I guess time will tell!

 

3 hours ago, legaleagle2012 said:

I would suggest paying off the two small ones; $500 isn't worth a legal battle. As for the Chase account, you need to clarify those numbers for us. What is the actual date of default? That would be the date of your last full payment on the account plus 30 days. If they first reported the delinquency in April 2019, a fall off date of 12-2020 makes no sense. Prob a typo, which somebody will eventually correct.

 

I have no problem paying off the smaller ones, but I don't know who to pay, especially if they've been charged off. Should I just go to Chase/Amex directly and tell them "Hey, this is what I want to do"? or do I have to validate the debt and figure out who is currently holding it?

 

In response to the first delinquency, that's what's odd because October 2018 was the first delinquency date for both chase cards. It probably is a typo, but i'm not gonna correct it for them!

 

 

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14 hours ago, PS2020 said:

 

I don't remember how old they were, but they definitely weren't old enough to be dropped off my credit report like that. My credit troubles started in 2016

 

There is nothing to stop these from popping up once the mortgage inquiries show. Companies you defaulted on will continue to pull your credit report (soft check as AR), and this is a permissible purpose under the FCRA as are checks for collection purposes. How much are the COs? DOFD?

Quote

I'm looking at the online reports. There's a difference between those and the paper copies? I did my reports through the annual credit report website.

Possibly.

Quote

As far as Amex goes, I should have mentioned (I'll update my post to reflect this), I WAS on a payment program with them, however I changed banks, and they wouldn't let me switch over the account where the money gets pulled from for some reason, so I basically told them "if you don't want to switch the bank accounts over then you don't want my money then, bye".

 

As far as the chase accounts go though, that's what has me confused; Upon researching, October 2018 was the first month I defaulted (last payment was September 2018) for both chase cards.

 

And no worries about sounding like a broken record; i'm just confused as far as the reports goes because I didn't know there was a difference between the PDF the site gives you and the paper version. How do I go about getting the paper versions?

 

 

I was on a payment plan with Amex, but I forgot to mention there was a whole thing that lead to me stop paying them. I laid it out in the response above this one, but i'll edit the main post to reflect what happened.

So a creditor was nice to set up a payment plan to help you, and you reneged over something petty? You can forget PFD on the Amex account. Your credit score and mortgage prospects will suffer accordingly. You could have kept the account long enough to pay off the remaining $500! If you want a mortgage you will still need to pay them but they are likely going to leave the charge-off given your previous interactions with them.

Quote

 

The DOFD is definitely not 2013 though, so I'm not sure what happened there. I guess time will tell!

 

 

I have no problem paying off the smaller ones, but I don't know who to pay, especially if they've been charged off. Should I just go to Chase/Amex directly and tell them "Hey, this is what I want to do"? or do I have to validate the debt and figure out who is currently holding it?

 

In response to the first delinquency, that's what's odd because October 2018 was the first delinquency date for both chase cards. It probably is a typo, but i'm not gonna correct it for them!

 

 

 When you start disputing stuff (if you do disputes) they will find it. There are a lot of things not adding up here. I hope your wife has significant income and wasn't reckless with her credit and the loan can go in her name. You can pretty much kiss your chance at qualifying much less qualifying at a competitive rate goodbye.

Edited by CreditCurious20

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15 hours ago, CreditCurious20 said:

So a creditor was nice to set up a payment plan to help you, and you reneged over something petty? You can forget PFD on the Amex account. Your credit score and mortgage prospects will suffer accordingly. You could have kept the account long enough to pay off the remaining $500! If you want a mortgage you will still need to pay them but they are likely going to leave the charge-off given your previous interactions with them.

 When you start disputing stuff (if you do disputes) they will find it. There are a lot of things not adding up here. I hope your wife has significant income and wasn't reckless with her credit and the loan can go in her name. You can pretty much kiss your chance at qualifying much less qualifying at a competitive rate goodbye.

 

15 hours ago, CreditCurious20 said:

P.S. I'd you can't hand two CCs with balances below $1k, how are you going to afford a mortgage?

 

You are being ridiculous rude without knowing the full situation. I'm responding to your posts for the sake of clarifying things, but if you're going to be condescending, I'd rather you just not post in the topic anymore. If I wanted to deal with condescending unhelpful people, I'd answer some of these collection calls.

 

First off, the issue was not petty. I tried to change it on the website, but when I removed my bank account, it would not let me change it to the new one, or even back to the old one. When I called them up, they told me that they can't do anything now that I deleted the bank account from their website. THEY were the ones being petty.


Secondly, I could not keep that bank account open because it was an old account I've had for years with a family member, and given both of our financial statuses, we decided it would be best to just close the account.

 

Thirdly, that last comment was completely uncalled for, but I will respond to it anyways: I never said I couldn't handle 2 CCs. My situation has since changed, which is why I ASKED ON THIS FORUM TO BEGIN WITH.

 

I am not asking how am I supposed to come up with the money, I'm asking HOW to deal with these charge offs, because I literally don't know WHO to give the money to in hopes of getting these removed from my credit report, IF that's even possible.

 

You see, I am new to this, which is why I'm asking here. I'm sorry if my ignorance on the subject deeply offends you.

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PS2020:    if anyone on this board offends you, you have the ability with your board controls to place that person on ignore.   You will no longer see their posts.

 

I would suggest that you read a lot more on our site.  One of the main things we try to make new people aware of is that online report, whether directly from the credit repository or a third-party credit report provider are useless.  Most particularly so if you are using these as a basis of determination.   Only ever use a snail mailed copy of the report mailed directly from the disputed repository.

 

Best of luck in your efforts.

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16 hours ago, CreditCurious20 said:

P.S. I'd you can't hand two CCs with balances below $1k, how are you going to afford a mortgage?

I haven't seen such a to the point rude, offensive, and uncalled for comment in a long time.   You owe the Original Poster an apology. 

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8 hours ago, PS2020 said:

I tried to change it on the website, but when I removed my bank account, it would not let me change it to the new one, or even back to the old one. When I called them up, they told me that they can't do anything now that I deleted the bank account from their website.

How long ago was this? It’s definitely not normal for a creditor to refuse a payment. 
If this was recent, it may be worth another call to Amex. If the frontline CSR isn’t helpful, respectfully ask to speak to a supervisor. 
If it was a while ago, perhaps contact the EO and explain the situation about the bank account. Let them know that you intended from the beginning that you wanted to make them whole, and that you still want to. Maybe they will reinstate the payment plan you were on. 

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8 hours ago, MarvBear said:

I haven't seen such a to the point rude, offensive, and uncalled for comment in a long time.   You owe the Original Poster an apology. 

I didn't mean the post you quoted in the way you interpreted it. If he overextends himself again, he is going to merely perpetuate bad credit for additional years if he misses mortgage payments. If he can remedy whatever circumstances that caused the delinquency, he can have his house and rebuild his credit so he doesn't have to worry whenever financing large purchases in the future. If my post came off as caustic that was not my intent.

Edited by CreditCurious20

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On 10/20/2020 at 12:50 PM, MarvBear said:

PS2020:    if anyone on this board offends you, you have the ability with your board controls to place that person on ignore.   You will no longer see their posts.

 

I would suggest that you read a lot more on our site.  One of the main things we try to make new people aware of is that online report, whether directly from the credit repository or a third-party credit report provider are useless.  Most particularly so if you are using these as a basis of determination.   Only ever use a snail mailed copy of the report mailed directly from the disputed repository.

 

Best of luck in your efforts.

Thank you! I researched it a bit more, and it sounds like you're correct, but no one can explain why it's ok for the online report to be different from the mail in one. You'd figure that's illegal, but it sounds like it just is what it is, hahah. It sounds like I need to call them directly and pay for the reports individually to get them via snail mail, so I'll set aside some time to do that soon. I need to do my wife's too.

 

18 hours ago, DPB said:

How long ago was this? It’s definitely not normal for a creditor to refuse a payment. 
If this was recent, it may be worth another call to Amex. If the frontline CSR isn’t helpful, respectfully ask to speak to a supervisor. 
If it was a while ago, perhaps contact the EO and explain the situation about the bank account. Let them know that you intended from the beginning that you wanted to make them whole, and that you still want to. Maybe they will reinstate the payment plan you were on. 

 

This was around last year, and yeah I was surprised. I wanted to give them money, I had a bank account my wife and I setup together that we both contribute to household expenses and bills and whatnot, but for some reason they wouldn't budge. They kept telling me "You violated the agreement and we can't do any thing for you now unless you want to pay like twice or more the monthly payments", and at the time that wasn't feasible, and they just kept being really rude about it, so I hung up on them.

 

The debt is so small that I'd have no problem working something out with them, but I don't know who to contact exactly. Is there a number for the EO?

 

17 hours ago, CreditCurious20 said:

I didn't mean the post you quoted in the way you interpreted it. If he overextends himself again, he is going to merely perpetuate bad credit for additional years if he misses mortgage payments. If he can remedy whatever circumstances that caused the delinquency, he can have his house and rebuild his credit so he doesn't have to worry whenever financing large purchases in the future. If my post came off as caustic that was not my intent.

 

All I have asked with my topic is how to deal with the charge offs. You are the one who is making both assumptions and judgements about my current financial capabilities.

 

I have several thousand dollars in savings right now, we live within our means, i'm currently unemployed thanks to the pandemic but i'm hoping that'll turn around next year, but I've been saving much of my unemployment benefits, and it seems like the next stimulus and Unemployment Benefits will help my family out quite a bit, and my wife and I would have no problem putting any extra stimulus money into handling these charge offs if it seems feasible. Either that, or the money goes right into savings, and we'll continue to live within our means while I help take care of my son who's turning a year old in december.

 

Yes, I made poor choices years ago. Now i'm trying to fix them. I didn't ask you for a lecture, I asked the forum how to handle the charges off, because I DON'T KNOW WHO I SHOULD BE PAYING OR HOW TO GET THAT BALL ROLLING. Furthermore, I don't know if it's in my best interest to wake up those dogs sleeping dogs if I don't need to just yet. Is it possible to convince them for a pay for deletion agreement? What would look worse on my CR to a mortgage lender 1-3 years from now: Charge off, Partial payment, or full payment? Do I start attacking these things immediately, or do I wait until I get new collection letters and work with them? Do I ever work with the CAs or just contact the original companies I owe money with? If I pay the collector, will that help get the charge off ridden from my CR? You see what I mean? There's like a million questions that I want to ask, but instead I wanted to get the ball rolling by listing my situation and asking for advice.

 

I'm not planning on fixing this right now or even this year (unless there's something feasible I can do right now to help), but I want to get as much information I can, so if the stimulus comes through, or I get a new job, or a windfall, or etc etc, I can get the ball rolling immediately SO that I can perhaps get a loan in the next couple of years. If I can't then so be it, but knowing what my options are sooner than later can only help my situation.

 

I currently have a loan with Onemain, formerly Springleaf, that i've been paying off for years. I also have a discover card that I had an issue with back in 2016, but they set me up with a payment plan, which I paid, and they let me keep the card, which I'm currently paying off as well. High utilization though, i'm not a fan of that, but it is what it is. Would it benefit me more to pay these down or off, or to take care of the charge offs/CA first?

 

I am capable of not shooting myself in the foot further just fine, since you're more concerned about that than my initial question.

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Here is a link to a thread that has backdoor numbers that you may find helpful.   

 

 

It is updated as our member base provides to me.

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19 hours ago, PS2020 said:

This was around last year, and yeah I was surprised. I wanted to give them money, I had a bank account my wife and I setup together that we both contribute to household expenses and bills and whatnot, but for some reason they wouldn't budge. They kept telling me "You violated the agreement and we can't do any thing for you now unless you want to pay like twice or more the monthly payments", and at the time that wasn't feasible, and they just kept being really rude about it, so I hung up on them.

 

The debt is so small that I'd have no problem working something out with them, but I don't know who to contact exactly. Is there a number for the EO?

 

 

If you only spoke to one phone rep one time, definitely try it again. If you can get a rep that is competent (more likely with Amex than most others), hopefully they can listen to the circumstances and help. Otherwise use one of the phone numbers in the thread that Marv linked. 

 

Quote

I currently have a loan with Onemain, formerly Springleaf, that i've been paying off for years. I also have a discover card that I had an issue with back in 2016, but they set me up with a payment plan, which I paid, and they let me keep the card, which I'm currently paying off as well. High utilization though, i'm not a fan of that, but it is what it is. Would it benefit me more to pay these down or off, or to take care of the charge offs/CA first?

 
 

Depends. If you’re at risk for being sued for accounts in collections, that should probably take precedent. On the other hand, if you are out of SOL for being sued or are in a jurisdiction where Chase doesn’t often initiate litigation, then focus on the current utilization. But this will depend on where you are located. Different states have different SOL laws for being sued by a creditor. 

 

As for what an underwriter will look for when you apply for a mortgage in the future, they’ll want the collections paid off. A partial payoff will be the same as not paying. You can settle for less than owed as long as the settlement prohibits the creditor from collecting on or selling the remainder of the balance. But again, if you’re past the point where you can be sued for the debts and the creditor can’t collect, that may change things. 

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So get your paper reports and double check the dates. Your date of first delinquency (DOFD) is the first missed payment on each account and this is when the clock begins to tick for SOL and when the account drops off your report. So this date is very important. You mentioned that your state (IL) SOL is 5 years. You can be sued even after 5 years , but you can get it dismissed on the grounds that the account is outside the statute of limitations. Again, the DOFD is important to know when SOL expires.

 

These chargeoffs are going to remain on your credit report for 7 years from the DOFD, whether you pay them off or not. It is rare for these to be removed unless you can find some discrepancy with the reporting on your CR. It is worth trying to dispute based on your paper reports, but don't get your hopes up. They are less impactful to your credit score over time anyway.

 

**With that in mind, one strategy might be to potentially wait to pay these off until a couple months before applying for a mortgage  (allow for time to update on credit report) or wait until instructed to do so by a mortgage underwriter. In the meantime, focus on saving for a down payment, improving your score and overall profile first. One risk is that you could be sued while you wait, if you are within the 5 year SOL. (This is why DOFD is critical to determining a course of action because waiting several years to pay it off might be too risky) 

 

As others have stated, it can make sense to pay them back, so that you can get accounts in the future. You might want to take advantage of their programs at some point. Both Chase and Amex maintain strong blacklists with long memories. Your credit report might be clear in the future but they never forget that you still owe them. You could still pay them off after they fall off your credit report in order to get back in with them. 

 

If and when you pay these chargeoffs, pay the original creditors back directly. You will need to contact them (Amex or Chase etc) and I believe someone provided backdoor numbers earlier. If you can reinstate your payment plan with Amex and/or get into the Optima program, this would be a good way to kill two birds with one stone, pay them off, get a new account with them and use it to rebuild your credit.

 

Buying a house with your wife in the next year or two might be ambitious, the middle score for the co-applicant with the lowest scores is one of the hurdles you must clear. So if that is you, you've got plenty of work ahead. But this is only one factor. Your employment history and overall credit profile is important too. Ideally, your credit profile has 3-5 credit cards/revolving , a couple installment loans (auto, student, OneMain/SpringLeaf etc) that are in positive standing. Adding these accounts will help increase your scores and counteract the negative information while it ages off. Your credit profile should look like you've regained your footing, achieved some stability and managing credit well since your 2016 troubles. 

 

But don't go crazy with credit applications and hard inquiries. the inquiries also impact your credit. You need to be thoughtful about the credit that you apply for. Don't apply for garbage credit accounts, i.e. recommendations from Credit Karma etc. Join a local medium/large size credit union. They often have secured cards and loans for rebuilding that are far better than Fingerhut or a Victoria Secret's card etc. The banking relationship you are establishing might also prove useful when it's time to get a mortgage. 

 

Mortgage lenders look at 2 years of employment history and tax returns, try to stay in the same field when you get another job. If you change fields/industries, it can set you back and you may need to wait to obtain the 2 years employment/income history. This can depend on the lender/underwriter. However, do what you need to do for yourself and your family first, worry about the mortgage approval later

 

Make sure your DTI (Debt to Income ratio) is 43% or less, so you will need to pay down your active credit card(s) and lower the utilization. The high utilization is impacting your scores as well. You need to be at 30% or less, preferably 10% or less of your credit lines, both at an individual credit line and overall revolving credit. (I.e. having 1 maxed card out of 5 can still depress your score.) 

 

Monitor your scores with MyFICO.com. Anything other than a FICO score (Vantage etc.) is a fool's errand. Lenders use FICO scores and the like. 

 

Wash, rinse and repeat as necessary for your wife's credit.

 

When you've tackled/made some progress on all of this stuff, then go talk to a mortgage broker, not any random bank loan officer unless it is your credit union and you've established a relationship. Brokers are great because they can shop around and find the right loan program for your situation. If you do this stuff before applying, you'll save yourself a lot of frustration and heartache and have an easier time getting approved. If you don't, they deny you and if you're lucky, they send you away with a to-do list that looks like this post. 

 

 

Once you have better data, you can make strategic decisions about how to address your credit, debt and plans for the future. 

 

Hope this helps

 

 

Edited by MessyCredit1

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On 10/21/2020 at 11:59 PM, DPB said:

 

If you only spoke to one phone rep one time, definitely try it again. If you can get a rep that is competent (more likely with Amex than most others), hopefully they can listen to the circumstances and help. Otherwise use one of the phone numbers in the thread that Marv linked. 

 

Depends. If you’re at risk for being sued for accounts in collections, that should probably take precedent. On the other hand, if you are out of SOL for being sued or are in a jurisdiction where Chase doesn’t often initiate litigation, then focus on the current utilization. But this will depend on where you are located. Different states have different SOL laws for being sued by a creditor. 

 

As for what an underwriter will look for when you apply for a mortgage in the future, they’ll want the collections paid off. A partial payoff will be the same as not paying. You can settle for less than owed as long as the settlement prohibits the creditor from collecting on or selling the remainder of the balance. But again, if you’re past the point where you can be sued for the debts and the creditor can’t collect, that may change things. 

 

I'm still within the SOL to be sued by Chase, but they haven't taken any action and I technically owe them over 6k in total. If I get sued, I get sued, and I'll deal with it then, but currently I'm not too worried about it, mainly because I don't even have the money to pay them if I wanted to. Why worry myself over something I can't do anything about at the moment anyways, you know? Again, I don't mean this flippantly, just as a realist.

 

Basically if I start work again and/or I get a nice windfall, I should pay in full, as opposed to a partial settlement. That makes a lot of sense. I'd rather not give anyone anything if it's not going to actually help my credit, you know? At that point I might as well just wait until they fall off.

 

On 10/22/2020 at 2:04 AM, MessyCredit1 said:

 

 

So get your paper reports and double check the dates. Your date of first delinquency (DOFD) is the first missed payment on each account and this is when the clock begins to tick for SOL and when the account drops off your report. So this date is very important. You mentioned that your state (IL) SOL is 5 years. You can be sued even after 5 years , but you can get it dismissed on the grounds that the account is outside the statute of limitations. Again, the DOFD is important to know when SOL expires.

 

These chargeoffs are going to remain on your credit report for 7 years from the DOFD, whether you pay them off or not. It is rare for these to be removed unless you can find some discrepancy with the reporting on your CR. It is worth trying to dispute based on your paper reports, but don't get your hopes up. They are less impactful to your credit score over time anyway.

 

**With that in mind, one strategy might be to potentially wait to pay these off until a couple months before applying for a mortgage  (allow for time to update on credit report) or wait until instructed to do so by a mortgage underwriter. In the meantime, focus on saving for a down payment, improving your score and overall profile first. One risk is that you could be sued while you wait, if you are within the 5 year SOL. (This is why DOFD is critical to determining a course of action because waiting several years to pay it off might be too risky) 

 

As others have stated, it can make sense to pay them back, so that you can get accounts in the future. You might want to take advantage of their programs at some point. Both Chase and Amex maintain strong blacklists with long memories. Your credit report might be clear in the future but they never forget that you still owe them. You could still pay them off after they fall off your credit report in order to get back in with them. 

 

If and when you pay these chargeoffs, pay the original creditors back directly. You will need to contact them (Amex or Chase etc) and I believe someone provided backdoor numbers earlier. If you can reinstate your payment plan with Amex and/or get into the Optima program, this would be a good way to kill two birds with one stone, pay them off, get a new account with them and use it to rebuild your credit.

 

Buying a house with your wife in the next year or two might be ambitious, the middle score for the co-applicant with the lowest scores is one of the hurdles you must clear. So if that is you, you've got plenty of work ahead. But this is only one factor. Your employment history and overall credit profile is important too. Ideally, your credit profile has 3-5 credit cards/revolving , a couple installment loans (auto, student, OneMain/SpringLeaf etc) that are in positive standing. Adding these accounts will help increase your scores and counteract the negative information while it ages off. Your credit profile should look like you've regained your footing, achieved some stability and managing credit well since your 2016 troubles. 

 

But don't go crazy with credit applications and hard inquiries. the inquiries also impact your credit. You need to be thoughtful about the credit that you apply for. Don't apply for garbage credit accounts, i.e. recommendations from Credit Karma etc. Join a local medium/large size credit union. They often have secured cards and loans for rebuilding that are far better than Fingerhut or a Victoria Secret's card etc. The banking relationship you are establishing might also prove useful when it's time to get a mortgage. 

 

Mortgage lenders look at 2 years of employment history and tax returns, try to stay in the same field when you get another job. If you change fields/industries, it can set you back and you may need to wait to obtain the 2 years employment/income history. This can depend on the lender/underwriter. However, do what you need to do for yourself and your family first, worry about the mortgage approval later

 

Make sure your DTI (Debt to Income ratio) is 43% or less, so you will need to pay down your active credit card(s) and lower the utilization. The high utilization is impacting your scores as well. You need to be at 30% or less, preferably 10% or less of your credit lines, both at an individual credit line and overall revolving credit. (I.e. having 1 maxed card out of 5 can still depress your score.) 

 

Monitor your scores with MyFICO.com. Anything other than a FICO score (Vantage etc.) is a fool's errand. Lenders use FICO scores and the like. 

 

Wash, rinse and repeat as necessary for your wife's credit.

 

When you've tackled/made some progress on all of this stuff, then go talk to a mortgage broker, not any random bank loan officer unless it is your credit union and you've established a relationship. Brokers are great because they can shop around and find the right loan program for your situation. If you do this stuff before applying, you'll save yourself a lot of frustration and heartache and have an easier time getting approved. If you don't, they deny you and if you're lucky, they send you away with a to-do list that looks like this post. 

 

 

Once you have better data, you can make strategic decisions about how to address your credit, debt and plans for the future. 

 

Hope this helps

 

 

 

Hope this helps?? This is EXACTLY what I needed, thank you so much!!!!

 

This makes a lot of sense and it helps me lay down a foundation for what I should be doing. Essentially just work with the original creditors, don't really bother with the CAs. I guess the next question would be, is there a situation where I should work with the CA over the original creditor?

 

I'm definitely putting chase on the back burner for now, but I think when I get the stimulus I'll hit up AMEX and see if I can mend that relationship and just start paying down my Discover card. I would LOVE to get rid of my onemain loan because that's 320 a month i'd save, but the payoff is currently around 7k and I can't afford that right now.

 

For me, my ultimate goal, like 5-10 years from now, is to basically not rely on credit anymore and just save money and invest properly. I didn't chug the Dave Ramsey koolaid, but I do think it's better to just not be in debt if I can help it. I don't think I'll get rid of my Discover card. I regret messing up my Sapphire card, but I'm not entirely sure if I want to get another AMEX card once I settle things with them.

 

I have lots of work to do!

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Screen-Shot-2020-10-25-at-6-59-24-PM.pngFor the Chase accounts, I would highly recommend looking at all of the collection letters they are sending you. My spouse and I have both settled our Chase account for A LOT less than what we owed. The offers we both got were sent in letters, proactively from the collection agencies collecting on the debt. Chase still owned both of our accounts, but the collection agency was in charge of calling/writing us on their behalf.

 

I settled my original balance of $9500 for about $1,150. It was about 2 and a half years past due at the time, as was my husband's. My husband settled his original balance of $6950 for about $695. You can get good settlement deals with Chase, so if this seems like something you want to do, then I would start looking at those letters. If none of the letters offer something you can afford, then you might consider calling the collection agency to try and negotiate a deal. I would aim for about 20% and explain to them that you are unemployed and that a low amount paid in a lump sum is all you can afford to do. The Amazon card balance is smaller, so I would not expect too much of a savings on it, but the higher balance would be easier to get a good discount on. What if you could settle both of these for a total of $1,500? I am just saying, it is possible.

 

P.S. I just saw your post saying you are dealing with Nationwide Credit about the Chase account. Those are the folks I settled our Chase accounts with that got us an amazing deal. I would not hesitate to get them on the phone and negotiate. They hold onto the account for about 4-5 months, in my experience, and the letters they send progressively offer a better discount. If you call the and offer about 15%, they might just go for it, assuming you have the money.

 

As far as AmEx goes, I was in a similar payment plan with them a couple of years ago. The only way to make any changes on it is to call them up and speak to their Indian reps who specifically deal with folks on a payment plan. That's why you couldn't change your account online. Anyway, I would maybe just try and pay them in full. It's a small amount and they might offer you the opportunity to get into their Optima Oasis program, so you can rebuild a relationship with them in the future. My guess is you will need to google the AmEx collections department phone number, assuming they have not sold your debt to a debt buyer.

Edited by RehabbingANDBlabbing
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On 10/24/2020 at 10:48 AM, PS2020 said:

 

I'm still within the SOL to be sued by Chase, but they haven't taken any action and I technically owe them over 6k in total. If I get sued, I get sued, and I'll deal with it then, but currently I'm not too worried about it, mainly because I don't even have the money to pay them if I wanted to. Why worry myself over something I can't do anything about at the moment anyways, you know? Again, I don't mean this flippantly, just as a realist.

 

Basically if I start work again and/or I get a nice windfall, I should pay in full, as opposed to a partial settlement. That makes a lot of sense. I'd rather not give anyone anything if it's not going to actually help my credit, you know? At that point I might as well just wait until they fall off.

 

 

Hope this helps?? This is EXACTLY what I needed, thank you so much!!!!

 

This makes a lot of sense and it helps me lay down a foundation for what I should be doing. Essentially just work with the original creditors, don't really bother with the CAs. I guess the next question would be, is there a situation where I should work with the CA over the original creditor?

 

I'm definitely putting chase on the back burner for now, but I think when I get the stimulus I'll hit up AMEX and see if I can mend that relationship and just start paying down my Discover card. I would LOVE to get rid of my onemain loan because that's 320 a month i'd save, but the payoff is currently around 7k and I can't afford that right now.

 

For me, my ultimate goal, like 5-10 years from now, is to basically not rely on credit anymore and just save money and invest properly. I didn't chug the Dave Ramsey koolaid, but I do think it's better to just not be in debt if I can help it. I don't think I'll get rid of my Discover card. I regret messing up my Sapphire card, but I'm not entirely sure if I want to get another AMEX card once I settle things with them.

 

I have lots of work to do!

Glad to hear that this was helpful. The answer to working with a CA or the OC isn't always cut and dry. Sometimes you have no choice, it depends on whether the debt was sold to a CA or assigned to CA. If sold, the OC might not work with you at all. If assigned, they may work with you once they've recalled the debt back from the CA. In my case, Chase must have (I can't remember if it was assigned out to a CA) pulled my debt back and made me a settlement offer of 10% of the amount due.

 

These things will develop over time, just make sure to save the letters that get sent to you so that you can keep tabs until you're ready to pay. When/if you get ready to pay, pull the paper reports again to make sure you know what needs to be addressed and with whom.

 

If you get served with a lawsuit for any of these accounts , DO NOT ignore it even if it is more than 5 years . You need to file an answer timely. Please come back here to get help if you need it as soon as it occurs. 

 

As for not relying on credit, your sentiment is normal and common among us who have had trouble in the past. But swearing it off isn't necessarily the wisest position to take. Credit and debt is a useful tool when applied properly. You, like the rest of us never learned how to use it properly, subsequently crashed and burned or ran into some kind of unavoidable life trouble. Unfortunately, our ego gets hurt in the process and we just want to pick up our toys and go home. But if we do, we don't learn how to make it work for us and our families.

A BK attorney once told me to not take this credit and debt stuff so personally, that a bad score wasn't a measure of who I was and that it was just a game that I needed to get better at playing. The advice applies to you too.

 

Managing credit isn't rocket science, but our consumerist economy literally depends on our ignorance. Unless you're going to go off the grid, it can be hard to avoid it. Everyone wants to look at our credit, jobs, insurance companies, landlords etc. So the best cure is to learn all that you can about it and learn how to play the game effectively. Learn when it makes sense to use it and when not to use it. Decide to be strategic about the use of credit and debt to ensure your family is well taken care of. You don't have to use it, but keeping it ready for use it is part of the game.

 

This forum is a great resource for learning, but I'd like to suggest looking into Facebook groups, Youtube and books about credit, debt and finances as well. It will help educate and encourage you as you rebuild. Obviously, you have a young family and are embarking on one of the biggest purchases of your life. You need to expand your knowledge about finances, credit and debt for those reasons alone. This pandemic and every decade recessionary crises are proof that you'll need to know how to at least dog paddle in the deep end for long periods of time. Credit and debt can sometimes be the life jacket you need to hang on to weather a minor storm or two and it is always fixable.

 

 

 

 

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The last place anybody should discuss personal debt is Facebook. Marky Mark will then have all you information and will sell it.  If you really want to learn about anything controlled by a federal statute, start reading Appellate and SCOTUS level decisions on Google Scholar.

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