College Senior Newbie NEEDS Advice- please help!
Date: Wed, 02/17/2010 - 19:29
I am a college senior who will be graduating in May. I came to college with no insurance, no money and no financial knowledge. I willingly signed up with the cool kids outside of the footballs games for credit cards to get free frisbees, water bottles and t-shirts. At this point, my credit is totally shot and my scores are ridiculously low. ( By the way, I also don't even have the cheap frisbees anymore either lol). This is probably going to be long because I am want to give you guys all the pertinent information. Thank you in advance for any help, suggestions, advice, etc.
I have about 14 negative items reporting and $14,000 of unsecured debt. Two items make up $10,219 of that ( a repossessed car and an eviction). The other $3,781 is a combination of 12 small amounts that I couldn't afford to pay at the time (mostly emergency room visits, one old electric bill, a cable bill my brother ran up in my name, progressive auto insurance, credit cards). About half are shown as charged off the others are collection accounts that are extremely past due. Last year I started paying some of the collection agencies on payment plans and to my dismay all 3 scores dropped drastically, insanely, shamefully, shatteringly low. Who wants to try to do the right thing and be punished by getting an even lower score?!?! Plus, since I started paying again I re-started the statue of limitations. I could have done nothing for three more years and watched it fall off but I was told by the CA that my seven years restarted since I made payments. At that point, I resolved to file bankruptcy. Until I found this site today I felt like that was my only option.
I am starting to feel like there may be another option for me. If I could get pay to delete agreements rather than negative hits for paying that would be WAY better than bankruptcy. My parents are going to give me 4,000 for a graduation gift and I was planning to use that to file for bankruptcy. Now I am thinking that I can use to pay everything except the repo and eviction. The 12 items that I would be paying off are all with collection agencies. Realistically, how likely is it to get pay for deletes? Is this something I would need a lawyer to do to ensure it's done successfully? Or are CA's usually willing to do it to get the money? If they are unwilling to do it, I will file bankruptcy because I am not paying another penny to watch my score fall any lower. I know bankruptcy will drop my score too, but at least it will be discharged and no longer popping up under new names every couple of months. My credit union won't give me a secured card now but they told me after discharge I can apply for a secured card and start rebuilding. I am not interested in doing consolidation at all. I want to pay it and be done with it as soon as possible. Even if I can't do anything about all 14 accounts, 12 down sounds like heaven to me.
In terms of the repo and eviction: The repo is $5848 from spring 2007 the eviction is $4371 from spring 2009. I don't have any extra money right now so I can't do anything about these until the fall when I begin teaching. I'd be willing to offer them settlements for a pay for delete at that point. Do CA's ever agree with pay for delete for settlements? If not, what is the best possible outcome for a settlement? The eviction is with a CA that is reporting. Toyota is still on my report but the account has been sold to several CA's over the years. None of the CA's have ever reported.
Sorry this is so long. Please offer any suggestions, insights, advice, etc would be GREATLY appreciated.
If you settle the debts by paying in full, the collection agenci
If you settle the debts by paying in full, the collection agencies may agree to delete the information from your record. But this can't be said with surety. You can negotiate with them and see who would agree to your proposal. Otherwise, ask them to update the record as paid in full. Always remember to obtain (and also preserve) every communication with the collection agency in writing to avoid confusions in the future.
Your score probably have fallen since you have restarted the sol. But once you settle the accounts, you may see some improvement in your score by the next update.
Now if you are planning for bankruptcy, it would be wiser for you not to pay off any debt right before filing. It can cause more damage to your possibility of getting the debts discharged.
thank you SB
I appreciate you sharing your advice. I guess I'm trying to figure out if I should file or repair.
I don't even know how to make the decision. I know that I qualify based on the means test but just because I can doesn't necessarily mean I should. At the same time, I know how bad a credit report with 14 negative items looks. Even if I pay the 12 off, they will be on there paid in full and still negative for another seven years after the pay off date right? Unless I can convince them to do a pay for delete? How am I supposed to know which choice I should make. I'm totally uneducated about all of this.
The negative information would stay on the report for seven year
The negative information would stay on the report for seven years from the date of delinquency.
Second, a 'paid in full' or 'zero' balance would definite lift the face of your report. Its much better than having derogatory accounts.
However, if your score is already tanked and you don't mind taking another hit on it, also aren't planning to own a house in the near future, you may consider bankruptcy. A ch-7 would wipe the board clean and give you a fresh start. But, it would stick to your report for ten years as public record.
It can have other consequences too, many employers are skeptical about hiring candidates with bankruptcies in their report. For them it reflects one's callousness on money matters.
With no financial input, its difficult to offer any suggestion. You can search the site to know about the pros and cons of all the options available to you. Also you can enroll with the site to get a free financial consultation.
Thanks SC, I just have two more questions. If I pay the charg
Thanks SC,
I just have two more questions. If I pay the charge off and collection accounts in full and my report reads charge off paid in full or just paid in full for the collection accounts it won't restart the seven years. Is that correct? Will it make my score drop if I do it in one lump sum? I'm asking because going into a payment plan with CA did make it drop. But if paying the 14 off won't drop it further or restart the clock then I would do that rather than file. How likely is it that once I pay them in full that my score would increase? Is there any benefit to paying a charge off in full, in terms of scoring?
If you can payoff the account in lump sum, negotiate/insist for
If you can payoff the account in lump sum, negotiate/insist for 'pay for delete'. It would remove the negative information from your report. Not that every collection agency would agree to it but it is something worth trying.
Quote:
Is there any benefit to paying a charge off in full, in terms of scoring? |
Not really.
I'd only pay off a charged off account in full if I succeed in deleting it from my report after paying.