Here is my history... I have over 14 charge-offs, for a total balance of over $48,000 in credit card debt. These credit cards were charge-offs in 1997 / 1998, but I stopped paying any of them in 1997. My concerns are the following: 1) Can I try disputing the bad marks and charge-offs with the 3 CRAs even if I haven't paid these debts yet? 2) I do have approximately $6,000 in my bank that I could use to settle these accounts. What's the best way to write/approach the original creditors/secondary creditor (companies that purchased my account from the original creditor) to offer 10 cents on the dollar? Any personal experience will be appreciated; 3) I live in Florida, but I signed up for most of these credit cards in California. I understand the statute of limitation (SOL) is four years in both states. If I offer to pay by letter, does that re-start the statute of limitation? (i.e. creditors will have four year to sue me from the time of the letter) 4) How common is it for creditors to sue you? I would like to accomplish repairing my credit in 8 months to purchase a home at the beginning of next year. THANK YOU! Abe
I'd wait a while These creditors could potentially come back and sue you or if you did get a house a judgement and lien. THe prudent thing to do is wait at least until the S of L has passed then you have leverage for negotiations or you may even dispute the trade lines and negotiate with those that still show up. Sorry but a house in 7 months is not going to be possible unless you can do a "wrap around mortgage" or get the seller to take back a loan for a fixed period of time while you repair your credit. Regards, C.R.
RE: 14 Charge-offs (Not Paid/S Abe, I just closed on my home (FHA loan). I had 4 charge offs my wife had 9. I had 8,000 to payoff. I first disputed all items. 2 fell off. I then contacted each creditor and told them I'd like to use my tax return to payoff the debt. I came up with a odd % like 53.278% Don't tell them anything about a mortage, Just say once this is gone we are back to where we started. Good Luck Steve J
RE: 14 Charge-offs (Not Paid/S Why should you only have to pay 10 cents on the dollar? As if you won the lotto by defaulting on your debts. You still have all the widgets you bought with the $50,000. IMO you are not in a position to be making any 10% settlement offers, they will sue you most likely.
RE: 14 Charge-offs (Not Paid/S With $48,000 in consumer debt that you obviously are not in a position to pay, why are you not filing BK? Sounds like a Chapter 7 should be considered. Most lenders, including Fannie Mae, will give you a mortgage 24 months post discharge on a BK. By wiping out your debt you can start rebuilding right away with a secured card and within six months qualify for a car loan, and so on. Right now you are a sitting duck for judgement liens which you can never get away from (unless you file BK). The ten years that a BK stays on your report looses its importance when creditors see that you have re-established yourself, as opposed to them seeing how many credit cards you walked away from. Also, creditors know you can only file BK once in 7 years so they actually feel a little more secure in their chances of collecting. Filing BK should not be taken lightly, but in some situations it makes the most sense.
RE: 14 Charge-offs (Not Paid/S I don't know..........if in one year the debts are not enforceable (barred by the statute of limitations) there is no reason to worry about judgements etc. In this worst case scenario all the adverse data is outtathere in say 5 years if not sooner if successfully disputed then maybe 15 months if he negotiates these unenforceable debts and others drop off through disputes. He has a better FICO score in this scenario in fact he could score in the upper 600's with a couple of good open accounts with low balances. With the bankruptcy he cannot get a jumbo loan if needed and would pay higher interest rates. Should he be sued he always has the BR card to play (barring changes in legislation) Any creditor who has pulled his file has probably already figured with over $40000 in debt there probably is little likelihood of collecting. My humble opinion, your thought ARE sound but just thought I'd offer that perspective. Warmest regards, C.R.
RE: 14 Charge-offs (Not Paid/S If the debts weren't so fresh I'd agree with you. Also, even "B" paper mortgage lenders will require that charge offs and judgements be paid prior to approval, so I still think BK is the lessor of the two and the cleaner break. A Bk can be explained in one letter (i.e., divorce, illness, business loss), 14 charge offs is bit sticky. As far as a jumbo loan is concerned I believe Freddie Mac has the same 24 month policy as Fannie Mae on discharge of a BK.
