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Cleaning Up Credit For The 2nd Time (an ongoing thread)

Mr. Media

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Recently stopped back in here to say hello after 7 long years, and because my credit repair journey starts anew.


The short version of the story: After years of using this forum, learning new tactics, and doing well in my business endeavors, I'd managed to clean the bad credit muck of my 20s and had well over $110k of unsecured credit. I was happy in that department, and things were going well. Unfortunately, as my business took several turns, coupled with an economic punch from COVID, and then lastly unexpected heart surgery which took me out May 2021 to January 2022... everything has changed. My income has been on a steady decline due to the changes at at my company... shrinking slowly, but noticeably.


In November of 2020, I made the heartbreaking decision to default on some of the debt I'd racked up, crushing my credit scores, and sending several of my "good" accounts into reactive modes. My high credit limits began falling like dominoes as the banks caught up and began to cover their butts. I tried to maintain a few accounts in good standing, but ultimately only 3 or 4 of them remain. I still haven't taken a full inventory of who's still standing. A few with $0 balances were the real winners and still exist... so the good news is that I have SOME good credit accounts, with age, and I will keep them open and maintained for that reason. I just discovered this week that my $3k Kohls card was still open and in good standing... hadn't used it in so long I had assumed it was closed. So there's some light... but there's also over $100k of darkness.


I settled two accounts while I still had the money to do so. My intent would have been to settle them all, but alas my income shrunk to a point where that was a fool's errand. Even with deep discounts, most of them wanted more than I had available, so it was a non-starter. The collections letters have been piling in, now, and I'm frankly shocked that at least one of two of them haven't sued me, considering the balances.


Around mid-September, I sent out my first round of dispute letters, one each, to each of the credit bureaus, hoping for some miracles and to make any positive impact on the reports. I disputed a different account with each of them. Experian updated its records. TransUnion miraculously DELETED the disputed account, and Equifax has sent me a response wanting to verify my SSN and address by sending in documentation to prove who I am and my address.


So my first question... how do I handle EQs request for identity validation? I could send them a copy of my SS card, but the address I use on EVERYTHING is a mailing address only. I'm not sending them utility bills or anything of that sort. Are they even allowed to ignore the dispute and play this game?


Second question... how long should I wait in between sending new disputes to each of the bureaus? I don't want to flood them, but I do want to keep the train moving.


I'm currently ignoring all collectors, because I have nothing to offer them financially. Anything else I need to know? I'm so rusty...

Edited by Mr. Media
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5 hours ago, shifter said:

So you're shocked that you haven't received any lawsuits, but you are disputing well within SOL? Sounds like you'll find those lawsuits you were expecting before long.


I appreciate the sentiment behind the snark, whats the alternative? What should I be doing instead?

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7 hours ago, hegemony said:

I'm curious why you don't pursue BK7 ?


I have an extraordinary set of circumstances surrounding my business which would make it a far more complicated case than it should be, and several attorneys offered to take it on but with very high fees. It would be multiple BKs and it would still leave some unresolved issues surrounding taxes.

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6 hours ago, Mr. Media said:


I appreciate the sentiment behind the snark, whats the alternative? What should I be doing instead?


Snark or not, the alert that indiscriminate dispute of recent debt is potentially subject to undesirable consequences is one to take to heart.


A debt issuer who is sitting on your liability to them is going to be advised of any CRA disputes and ask to reaffirm the reporting.  In slang terms, that's referred to as "poking the bear".  That may be sufficient for a creditor to pull up your account and place it on their front burner for collection.


The general advice re generic credit bureau disputes (those not focused on revising erroneous reporting, but instead initiated in hope that the creditor won't affirm the reporting and the CRA will thus delete) is to limit such disputes to debt that's out of SOL (i.e. where the creditor no longer has legal recourse by which to enforce collection of the debt).


Generally, with debt still within the SOL, your primary choices are to proactively work with the creditor (debt settlement, etc), or attempt to dodge the creditor until the debt is outside the SOL.

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Well first of all STOP rocking the boat with disputes within SOL. This will only create more problems for you as it is a signal that you are susceptible to being successfully sued. 


Make sure that ALL of your bank accounts whether personal/joint or business are in a relatively "safe" situation. I suggest local (non affiliated with any National banks) institutions such as credit unions or smaller local banks.


Get a SMALL credit limit credit card and debit card from one or more of THESE "hidden" banks and stop using any existing credit cards that are still in good condition for anything big.


Once you are past SOL on any of the defaulted accounts you can THEN start trying to get them off your reports-- be patient and make sure you do not do anything to attract the attention of any account or collection agency that is still within SOL.


I seldom disagree with hegemony but in this case I do NOT suggest you try to make any settlement with anyone as it would be a signal to EVERYONE that you have assailable assets and they will jump to sue.



Edited by Why Chat
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On 10/15/2022 at 4:08 AM, Mr. Media said:


I have an extraordinary set of circumstances surrounding my business which would make it a far more complicated case than it should be, and several attorneys offered to take it on but with very high fees. It would be multiple BKs and it would still leave some unresolved issues surrounding taxes.

I had a very complex BK7 that was multiple steps, about a 4 year process to all play out and 6-figures in costs after attorney fees and buying back equity in our home. Still worth every penny. But we were already facing several lawsuits. If it weren't for that, lying low and waiting it out is much preferred.

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Hey guys... thanks all for the insights. I guess I got trigger happy just wanting to do SOMETHING vs nothing. I've been back in Nevada for seven months, should I assume NV law applies in regards to SOL, then?


I'm not really in a position to pay or settle anything, now. I could save up over 7-8 months and MAYBE settle ONE account, but with so many and the large balances involved, that's about all I'd accomplish. My income slide is still ongoing... probably won't reach its bottom until Q1 next year, and probably wont begin a slow rebound until Q2 or early Q3. Definitely a bumpy road ahead.


So it feels like the best course is to just chill and wait it out. I needed to hear that. Thank you again.

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