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Rethinking What I Am Doing


Cajun Credit
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I have been going through a rough financial patch for the past few years with problems managing money. The past 2 years I hit rock bottom but now I can see some of the sunlight of getting out of debt. So far I have worked to pay off some high interest personal loans, and are working towards paying off some credit cards. I was even able to pay off a Wells Fargo card at 40% of the balance this week.

 

I am looking to do more of this paying off debt at a discount. I still have some active tradelines that are in still good shape, but I did let some of my cards go bad as I was thinking about filing for bankruptcy. Based on my income and conversation with an attorney, bankruptcy may not solve my immediate problem, it could prolong it, since it would be a chapter 13 filing. So, I am moving forward without filing for bankruptcy unless one of my creditors starts getting aggressive with a lawsuit.

 

So now, as I am trying to right the ship, I paid off one of my oldest cards last week and it was closed when the statement cut. I am prepared to pay off a few more cards now, but I am afraid that those accounts will be closed or Limits slashed if I pay too much too soon.

 

What should I focus on:

  • keep paying off my current cards which are accruing interest (Current Balance totals 15,000)
  • start paying on a few recent late accounts (Balance on those accounts 7,800) or wait out a few more months on some of this new bad debt to get charged off
  • Continue to hold off paying debt that is nearing 2 Years SOL (7,000)
  • I also have a cancerous CashnetUSA debt that has been ballooning at 300% interest, I stopped paying them a few months ago after it was apparent I would never finish paying it off after paying them nearly 6,000 dollars on a Line of Credit. They recently offered to stop charging the interest in exchange for a full payment of the balance in payments that accrued after not paying them. They still want another 3,000.
  • head back to the bankruptcy route

 

Looking into my debt situation, I can try to pay all of this in 2 to 3 years. My future goal is to be as close to debt free as possible except for a mortgage that has about 7 or 8 years left to pay.

 

 

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11 hours ago, Cajun Credit said:

wait out a few more months on some of this new bad debt to get charged off

 

Avoid new chargeoffs/lates.  

 

After avoiding being sued, my next highest priority would be containing the credit damage (makes rebuilding easier), followed by saving money on interest.

 

What happens to my existing limits as I pay down the balances would be pretty far down the list of priorities.

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13 hours ago, Cajun Credit said:

 I paid off one of my oldest cards last week and it was closed when the statement cut.

 

 

First, kudos to you in proactively working to "right the ship" (as you aptly phrase it)!

 

I wanted to address this snippet.  Was the account really open for use until this last payment?  (I understand that they likely were reducing your CL as the account was repaid).

 

If so, then it's worth a call to speak with a supervisor or credit analyst to see if they'll reopen the account at a modest credit line (say, $500, or even $200).  Relate that you're in the process of getting back on top of your credit situation after suffering adverse events.  Tell them that you value your long standing relationship with them and hope that they're willing to "partner" with you as you work to restore your credit (having been appreciative that they hadn't closed your account until now).

 

Keep the conversation positive and matter of fact and acknowledge that you understand if they can't reopen the account, but that you're calling hoping to salvage the account relationship. 

 

As you rebuild your credit, successfully maintaining an old account relationship is invaluable.  It's not essential, but if you're successful it definitely positions you more strongly.

 

 

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