Thread: Derogatory Credit

Hello all;

Message/Question kind of long. Re: MBNA/others


I received a letter in the mail today stating that it was my last chance to save my account. It also stated that the account was going to be written off as bad debt in January. In order to do this I would need to make a payment of $185.00 by December 16th. I did. I sent it in, yesterday via online, which it says it takes two days to clear. So it should be received by the 16th. Hopefully so.

The account is now past due for 150 days, which technically, I have been making $30.00 payments, as opposed to $225.00 payments. My financial situation, beings that I am self-employed has gone down the toilet. My income has gone down to 25% of what it was just 4 months ago. I have been reading this site now for a few days and read in a post that with FIRST USA you just have to hold out and eventually they will go to 0% APR.

Unfortunately this is not the only account which is overdue. It is, however the only one this much past due. This account’s credit line is for $12,800.00 With all the fees and suck, the debt is around $13,500 something. I would like to preserve it at that level,($12,800.00) but unfortunately at this time, I have no way to make those kinds of payments. The $185.00 that I sent in is going to mess me up in paying the other bills, but I thought by doing this it would buy me some time. (If anything to talk to you all and see if anything can be done.)

My question is two-fold. One, does anyone have any experience in bad debt with MBNA? Two, like FIRST USA will they eventually go down to 0% APR if, like was said in the other post, keep telling them no?

They gave me three options:

One: Pay $315.00 a month for 12 months @ 5% APR

Two: Pay $185.00 a month for 9 months @ 13%APR

Three: Pay $1,651.00 by December 16th and see if I can get my card reinstated


Other accounts that are derogatory: I have a credit report from Experian (who I can’t stand!!)
Its from 11/01/02

20 Accounts in good standing (including bank loans that were paid off ahead of time.)

7 Derogatory accounts: The one mentioned above, the biggest, and these as well:

A $9,700.00 account with Citibank that is still in good standing, but I am sure it is not now. It has a balance of $10,700.00 Still Open.

A $5,500.00 account with Direct Merchants Bank which is now 90 days late, about to be 120 days late (with $30.00 payments) and a balance of $5,700.00 This account was “closed at credit grantor’s request” (whatever that means) within the first 30 days.

A $5,000.00 account with GECCC which was 60 days past due with no payments, but I just caught up on that one last month.


A collection that I disputed and came back as an old girlfriend who I shared an apartment with left the place in shambles and the deposit didn’t cover it. I left 5 months before, but forgot, in my youth of not knowing any better, did not sign off of the lease. ( I just didn’t know) It, however, is scheduled to go off of my report in July of next year.

Any and all comments and suggestions would greatly be appreciated, except for humblmarc, who I have been reading is something about a TROLL or something like that, and the only responses he gives is PAY IT ALL and RIGHT NOW and junk like that. Common sense would dictate that if one HAD the means to pay it, it would not be delinquent. (Just a thought) Anyway any suggestions from both those who have experience with MBNA and the “seasoned” for a lack of a better word, individuals would be greatly appreciated. (Again, except for humblmarc, which I will ignore)

Thanks ahead of time. Oh I almost forgot. Does anyone know what “floating” or “kiting” funds from account to account is, without any withdrawals? Has anyone here heard of that, either successfully or otherwise?

Again, thanks to all who respond with tact.

Thanks

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May no one person or entity ever snuff out your fire!!!

Wil

Kiting is illegal. What is done is that a number of checking accounts are set up with small deposits. You then start wrtiting checks from one account to deposit in another account. The check is for more than you have in that account that you are writng the check from. Assuming your bank gives you immediate credit for all check deposits, you will show a balance. You cover the shortfall by writing more checks from the other accounts. Pretty soon, you have large balances in all accounts, and you start withdrawing.

It used to work better when check clearing took a couple weeks. Once you get caught, you go to jail.

Now on to the rest of your question. I am in the same position as you. I am not paying on my accounts. Have paid nothing since October, so I am not in too bad of shape yet. Citi calls two or three times a week. Very nice so far, but they have told me they will report it late at the two month point.

FirstUSA calls twice a week. Not as friendly. They told me they woul report it to the CRA's at the 60 day point but instead reported it after 30 days late. I took an 80 point hit on my FICO. They are very persistent - they don't want to let you go until you pay something.

MBNA has not called yet, but did send a nice note in the bill asking if I forgot to mail my payment.

Merrick finally called this week. They were ok.

What I have been told here is that you have 90 days after default before they get bad. At that point they may turn you over to the CA or they may hold on to it. I think it depends on whether or not they think you will pay.

Some here advocate just ignoring them and hoping they do not sue. Others opt for bankruptcy. I think I have a reasonable chance of catching up, so right now I am being polite, but not paying anything.

One more comment. Citi usually has the same rep call me. When she calls, she knows what the situation is so she does not waste my time by making me start from the beginning. With FirstUSA, a different rep calls each time and has no clue what my circumstances are. I have to start at the beginning each time. Very annoying.

When I missed my first payment, I went into a deep depression, thinking I would be flooded immediately with lawsuits, I would lose my house and cars, and my world would fall apart. People here assured me that it is not immediate - you can hold the creditors off for a while. So, you have some time to think and plan.

By the way, what did they do with your APR when you fell behind? Citi jacked me to 25%, FirstUSA to 22%.

Thank you for the info. on kiting. Didn't know exactly what that was. Floating, however, is basically doing the same thing only NEVER EVER withdrawing any funds. It is merely to show that you have large amount of cash flowing thru your accounts. In other words, it looks good on paper. The whole point of this is to look good on paper so you can go to other banks and get small signature loans (a lot of them) and pay them back, so you can establish some report with your local banks and build up and up and up on the amounts that you borrow until finally when your up into the $100,000.00 range in roughly a 7 month time frame, if all goes well, which it usully doesn't, lol, at one of those $100,000.00 borrowed funds, you can pay off all your outstanding bills and really begin to build your credit back up rather quickly.

Anyway, enough on that. Pretty much all my cards that I am delinquent ( what an ugly word) on are at 25%!!

Also, I think you misunderstood me. I AM paying on those cards, just not THEIR, minimum. Alright, I get it, since its THEIR payment thing, I guess its like I am NOT paying it at all. If that's what you meant, than, yes your right, I am NOT paying their minimums. I guess the age old myth that as long as you pay at least something, whether it is $5.00 or their minimum, they can't do anything to you. Guess that old adage is wrong, eh?

By the way, I keep reading the word CHOD what does that stand for? If, it is, what I think it is, some sort of courtesy letter of some kind, is it too late for me to send them one?

I ask this question for two reasons: one, for the aboved approach at improving my credit, and two, I am also about to start into R.E. investing, which in itself will get my bills paid off. The area in R.E. investing that I am going into will, with only 2 deals, have my bills paid off. This will be in roughly a 6 months for the R.E. investing or 7 months time frame for the above. So if this CHOD thing IS a courteousy letter of some kind, would I be wise into setting that sort of time frame committment, or would that be unwise for me to do so.

Anyway, what is CHOD and can I use it still?

Thanks again if you know and can respond.

Chod is actually Creditnetters Holiday Onslaught of Disputes. In a nutshell, CRA's only have 30 days to verify disputes. We have started mass mailing them with disputes in an attempt to get easy deletions, especially during creditors busiest time of the year, and the holidays "shortening" the 30 day period.

If you are in such financial trouble, with your credit gradually getting worse and worse, what makes you think you can begin investing in real estate? Do you have the funds to do this? Do you have the credit required to do this? I'm not trying to be rude, I am actually curious.

It seems to me that you should concentrate on righting the ship with your finances before pursuing a venture that may just end up further damaging your finances and your credit.

[QUOTE]Originally posted by MySRT10
[B]Hello all;

Message/Question kind of long. Re: MBNA/others


I received a letter in the mail today stating that it was my last chance to save my account. It also stated that the account was going to be written off as bad debt in January. In order to do this I would need to make a payment of $185.00 by December 16th. I did. I sent it in, yesterday via online, which it says it takes two days to clear. So it should be received by the 16th. Hopefully so.

The account is now past due for 150 days, which technically, I have been making $30.00 payments, as opposed to $225.00 payments. My financial situation, beings that I am self-employed has gone down the toilet. My income has gone down to 25% of what it was just 4 months ago. I have been reading this site now for a few days and read in a post that with FIRST USA you just have to hold out and eventually they will go to 0% APR.

Unfortunately this is not the only account which is overdue. It is, however the only one this much past due. This account’s credit line is for $12,800.00 With all the fees and suck, the debt is around $13,500 something. I would like to preserve it at that level,($12,800.00) but unfortunately at this time, I have no way to make those kinds of payments. The $185.00 that I sent in is going to mess me up in paying the other bills, but I thought by doing this it would buy me some time. (If anything to talk to you all and see if anything can be done.)

My question is two-fold. One, does anyone have any experience in bad debt with MBNA? Two, like FIRST USA will they eventually go down to 0% APR if, like was said in the other post, keep telling them no?

They gave me three options:

One: Pay $315.00 a month for 12 months @ 5% APR

Two: Pay $185.00 a month for 9 months @ 13%APR

Three: Pay $1,651.00 by December 16th and see if I can get my card reinstated


Other accounts that are derogatory: I have a credit report from Experian (who I can’t stand!!)
Its from 11/01/02

20 Accounts in good standing (including bank loans that were paid off ahead of time.)

7 Derogatory accounts: The one mentioned above, the biggest, and these as well:

A $9,700.00 account with Citibank that is still in good standing, but I am sure it is not now. It has a balance of $10,700.00 Still Open.

A $5,500.00 account with Direct Merchants Bank which is now 90 days late, about to be 120 days late (with $30.00 payments) and a balance of $5,700.00 This account was “closed at credit grantor’s request” (whatever that means) within the first 30 days.

A $5,000.00 account with GECCC which was 60 days past due with no payments, but I just caught up on that one last month.


A collection that I disputed and came back as an old girlfriend who I shared an apartment with left the place in shambles and the deposit didn’t cover it. I left 5 months before, but forgot, in my youth of not knowing any better, did not sign off of the lease. ( I just didn’t know) It, however, is scheduled to go off of my report in July of next year.

Any and all comments and suggestions would greatly be appreciated, except for humblmarc, who I have been reading is something about a TROLL or something like that, and the only responses he gives is PAY IT ALL and RIGHT NOW and junk like that. Common sense would dictate that if one HAD the means to pay it, it would not be delinquent. (Just a thought) Anyway any suggestions from both those who have experience with MBNA and the “seasoned” for a lack of a better word, individuals would be greatly appreciated. (Again, except for humblmarc, which I will ignore)

Thanks ahead of time. Oh I almost forgot. Does anyone know what “floating” or “kiting” funds from account to account is, without any withdrawals? Has anyone here heard of that, either successfully or otherwise?

Again, thanks to all who respond with tact.

Thanks


If you need to have the lowest payment possible , Option # 2 Would be your best bet.. If and When you call the Tel Number on your Letter, You will be asked A few Questions for a reduced payment.. By what you have written in you letter, You may be able to get a Payment at 1% of your Outstanding Balance.
Around 140.00.. You may be able to get the interest lower than 13%... It all depends on how much debt in relation to your income, ect.. If you are still getting over the limit fees, Ask to have them stopped.. After the 3rd Payment , if you decide to go with that plan, Your account will be brought up to date, ( Reaged) and will report to the CBR'S as such.
While you are on this plan your account will remain closed for the duration of the reduced pay..

Best of Luck

RJ

P.S

I did not see in your Letter that you had already sent in your first pay.. I would still give them a Call, to see if you can get your payment lower.. You have already started the program, by sending in your payment..

Originally posted by jdog0411
If you are in such financial trouble, with your credit gradually getting worse and worse, what makes you think you can begin investing in real estate? Do you have the funds to do this? Do you have the credit required to do this? I'm not trying to be rude, I am actually curious.

It seems to me that you should concentrate on righting the ship with your finances before pursuing a venture that may just end up further damaging your finances and your credit.

Hi,
the "real" humblemarc here. As a real estate investor, I agree with the above comments. However I would suggest only doing "wholesaling" or "flipping" properties for the time being in order to make a large sum of money ($3000-5000) in a month or less. This is an easy and credit-free way to make money in real estate without having capital, good credit, or the large amount of reserve money needed for "true" investing.
No offense, but it seems like you have gotten some of your ideas from a "real estate guru" who may or (probably) may not have made their fortunes in real estate. Please be wary of the things you hear in the books and boot-camps these people sell. Many times, their theories are just that, theories.
In the mean time, continue to clean your reports and lower your balances, so that you have actual resources to invest in the many opportunities that exist out there.
Good luck.

Humblemarc,

I know exactly what to do in RE Investing, and yes I am familiar with wholesaling and flipping. I could tell you why, in my area, the first idea is not very realistic, but that would take up too much space here.

The second, however is where I will be focusing most of my attention, in what I have found to be a relatively new niche in my area, so I know exactly what to do when it comes to RE Investing, I have been studying it way too long to make many mistakes, and I know what I can do personally with my financial and credit situation. My biggest hold up, unfortunately is lack of confidence, and direct mentorship. But hopefully that will change after my first few local REI club meetings. Again that is another story.

You wouldn't happen to be a member or CRE would you? If so, what area are you in? Did you see my post on "floating"? If so, have you heard of that before?

Anyway, appreciate the attempt at some good advice, but unfortunately the above post you spoke of, is NOT good advice, because they don't know me, they obvioulsy don't know to much about RE investing, otherwise they would know better than to make such a statement, and why YOU would say that you agree, since you DO supposedly know about RE investing, is beyond me. At the same time that I am investing, I will be using the floating techniques to establish local credit report with some local banks. So in essence, it is sort of good advice, but with the addition of RE investing, it makes it NOT good advice. But like they said, they weren't trying to be rude, they were just curious, so hopefully I helped them out with that curiousity. You, however, I don't know.

Surely you would know, if you ARE a RE investor, that thru H.M. lenders and N.I.'s you don't need ANY credit, or ANY cash. Now, I am not EVEN going to go there like that other fake idiot who was trying to pose as you did, but it kind of makes me wonder about your validity statement of being a RE investor, because you should already know all of this.

Again, not trying to be mean, it just makes me wonder since you should of known this already. Anyway like I said, appreciate the attempt and glad that other guy who was impersonating you is gone. (Don't know how long for THIS time, but that lady seems to be getting pretty good at catching him/her.)

Anyway tty lata.

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May no one person or entity ever snuff out your fire!!!

Originally posted by MySRT10
Humblemarc,



Surely you would know, if you ARE a RE investor, that thru H.M. lenders and N.I.'s you don't need ANY credit, or ANY cash. Now, I am not EVEN going to go there like that other fake idiot who was trying to pose as you did, but it kind of makes me wonder about your validity statement of being a RE investor, because you should already know all of this.


--------------------------------------------------------

May no one person or entity ever snuff out your fire!!!

You're right, I probably know very little real estate investing compared to all the informaton that could be learned. But i do know that hard money lenders cost you MUCH MORE money because of your inability to get more tradititional credit. Whether that money is being paid by you or your tenants or a buyer, it is still NOT money growing directly into your pockets.
As you question my "experience" with real estate, i will make this one last statement and leave you be. In the current economic climate, even H.M. lenders have "tightened" up their lending requirements, making it that much harder to find a "deal" that allows an investor to make money "using" their service.
BTW- yes, i am a member of CREOnline.

You're right, I probably know very little real estate investing compared to all the informaton that could be learned. But i do know that hard money lenders cost you MUCH MORE money because of your inability to get more tradititional credit. Whether that money is being paid by you or your tenants or a buyer, it is still NOT money growing directly into your pockets.
As you question my "experience" with real estate, i will make this one last statement and leave you be. In the current economic climate, even H.M. lenders have "tightened" up their lending requirements, making it that much harder to find a "deal" that allows an investor to make money "using" their service.
BTW- yes, i am a member of CREOnline.

Promoting Truth, Kindness, Freedom, and Harmlessness



I will leave you be with this one last statement as well: Your right, you don't make your money through a H.M. lender, going through a H.M. lender is how you are able to PURCHASE RE without credit or a lot of capital. That was my point. Not how to profit from it. That wasn't what was being said, what was being said was how do you figure on RE investing without credit and capital. That is what was being said and that is what I was addressing. Please, let's not twist things around or get confused. I don't question your experience, I question your statement. As you should well know being "experienced", you don't make your money on the front end of the transaction with the H.M. lender, you make all your cash on the back end of the transaction with the N.I./Buyer combination on a simultaneous close. (Which again you should know, unless of course you haven't any experience in investing that way, which I would start to undertstand your responses, if that was the case).

Understandably so, on the point of H.M. lender "tightening", but there are hundreds and getting close to thousands out there that don't look at anything but the LTV, which I am sure your aware of, the tricky part is the second part of the transaction with the buyer, thats really the tougher part.

Anyway, enough said on that, starting to talk more REI than credit here so I will end this by saying glad to hear you are a member of CRE. Nice to meet a fellow member elsewhere.


Wil

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May no one person or entity ever snuff out your fire!!!