Hello all. First off a quick background about me: I have had credit for about 10 years. Always in the high 700s or 800. That was until about late 2008, early 2009. I had high balances but nothing that i could not afford. I was making extra payments to bring it down. Then, all of the sudden, all of my creditors "revised" y account and deemed me a high risk and starting increasing APR. It went from about 7-9% on all accts, to 19-22%. Now, this was putting me in a very tight position. I kept at it until about september 2009. Life happened and had to skip a payment on a couple. All of the sudden, those jumped to 28%/30%. Even though i had been a stellar customer for many years. I called to ask about reducing the rate, they said no. Then im March 2010 i had other stuff happen and i had to skip payments. I had planned on starting payments again around July/August. (BTW, i never stopped paying any secured debt, and i also made an effort to keep my CU personal loan current) In July/August i started calling creditors and asking them to set me up with a payment plan. Chase did (2 accts), So did Discover and citiFinancial. Amex and BofA were the last 2, which had the largest balance, and could not call until i figured our how much i would have every month to pay it. Which brings me to yesterday. I am a newbie at credit repair. Not completely a noob at managing credit, but obviously not an expert, not even close. I never bothered to research what to do if your credit gets damaged; i never thought i would have to. In any case. I have finally sorted out what kind of monthly pmt i can make to amortize the debt to Amex and BofA. I am hoping you can help me with planning a course of action to minimize the impact on my credit (and also start fixing it), and to also get out of that debt as cleanly as possible. 1. BofA: I called BofA to try to setup payment plan. They transferred me to a couple of other numbers. I ended up talking to a lady (i didnt know this and it took me about 5 minutes to realize i was transferred to a CA). At this poin i had not read anything online about how to deal with CA so i went through with talking like i had done before with OC on my other cards. here is what they offered: balance 9600. option a) bring acct "current": put down 2000. then $125/mo (the $125, came from me saying thats all i could afford per month) option b) settle for 4800. Divided over 3 payments. After pushing they then offered divide by 9 payments. Ok. So at this point, i am considering option b over 9 months. But i did not want to pull trigger because wanted to learn more about what kind of impact this would have and how this worked. If i had known it was already with a CA then i wouldnt have called until i had researched more. But it is what it is. Oh yeah, the CA is PRS. 2. Amex. I called yesterday and they said they didnt have the acct any longer. It had been sent to someone else. They gave me the number to call. I didnt call. The CA is NCO. Here is some more info: - I have roughly 7k in savings, recently acquired through a distribution. I expect to have to pay 25% tax on it. SO i wont touch that. Basically i have roughly 4k available. - Checkings is month-to-month. I can come up with roughly $500/mo to pay this debt down (this is outside of my current debt commitments). - My credit report shows all 3 scores in the low 500s. - 2 out of 3 show amex charged off. 1 out of 3 show BofA charged off. All 3 were just reported in November. Side note, i did not know about automatic charge off after 180 days. If i had, i would have called 2 weeks ago. I am kicking myself for taking too long to act on these 2 accts. Here is my question for you experts: 1. Since there are no CA markings on my report. What is my best course of action? Would a PFD work with either account even though im dealing with the CA and not the OC? The CA would have nothing to delete. 2. Specifically to BofA. I obviously messed up because they now have me on record agreeing to the debt, confirming a bunch of my personal information, including income, expenses, etc. (I am pissed about this because i thought i was dealing with BofA directly, and this was a common step to setting a hardship program with other CCs). Is this a problem? Should i still do a DV? I got off the phone with CA by saying i could not commit to settlement. That I would call today. I was going to, but my research last night yielded this site. What should my next step be? I would prefer to deal with OC directly and setup hardship program. Though the thought of settling for less is attractive. Can the CA remove the charged off TL? When i got off the phone, the CA said if i didnt call by noon today the deal was off for the 9 pmt settlement. I was worried but after reading here i think it was just a bluff. what do you think? Part of why i didnt go through it was because he refused to send it to me in writing. To think i was so close to just giving him my bank info and getting it done. 3. Specifically for Amex. Should i do a DV anyway? how do i delete or minimize the impact of the charged off TL? Is it even possible? Balance is 9300. 4. Like mentioned above. I entered hardship program with other creditors. Some of them had already reported late pmt to multiple CRAs. Here are the details with questions on how to deal with them: a) Chase. 2 accts. Entered hardship prog in July. 1 acct has 3 30 day late marks, latest 07/10. since then status shows: pays as agreed. Other acct does not have any lates. shows pays as agreed. Though the accts are closed. Both accts were set to 12%apr from 28%. and pmt cut to 60% b) Discover: 1 acct. Entered hardship in Sept. CRAs show: 2 show: 120 late for july, august, september 1 shows: 150+ late for August, septemebr, and October. when i setup program, they said after 3 pmts on time they would flag as paid as agreed. but dont know if thats retroactive. should it be? my 3rd pmt will be later this month. Acct was changed to 6%. payment cut to 60% 5. All other accts in report are pays as agreed. I have a vehicle lease that had 1 30 late mark. it was an oversight on my end. this lease ends 07/2011. Am i going to have problems getting a new car loan? I would be looking for a purchase this time, on a lower priced vehicle to reduce payment by about $150-$200. 6. I looked for quite a while but couldnt find a real primer on how to tackle this stuff. I did read the sticky but it was fairly abstract. I still dont know the process real well. once i get a DV do i immediately send PFD? or an NDA? Anything else that i have to look for? I dont know what other information you might need to help me out but feel free to ask. Thanks in advanced for all your help.
Welcome to the forum Java! In the future, limit your individual posts to just a few questions at once and you'll probably receive a faster response from the forum members. Anyway, here are my thoughts in response to your questions: 1.) I'm surprised that none of the CAs have reported a collection to your credit reports yet. However, I would still want to negotiate any agreement with the CAs while keeping my credit score in mind. Remember that a "paid" collection is just as damaging to your credit scores as an "unpaid" collection. And yes- PFDs do still work with CAs. 2.) Always DV CAs. You need to protect your rights under the FDCPA and determine that they truly have the right to collect this debt. Also, the CA can't remove the charge off. The OC placed that on your credit reports. I suggest finding out if this account has been sold to the CA or if the OC has just assigned it for collection. This will affect your strategy going forward. Oh, and never agree to anything unless they provide it in writing. 3.) Once again, always DV. It's your right. The only way to get rid of the charge off is to settle/pay off the debt and then approach the OC to see if they will delete out of goodwill. They don't have to do anything though...it was a CO for them and they have the right to report it as such. 4.) They may update your credit reports to "Paid as Agreed", but they don't need to remove the old late pays. If anything looks incorrect or there's missing information, you always have the option to dispute it through the CRAs. 5.) Based upon your credit situation at this point, I wouldn't recommend getting another car loan. It will be tough/expensive given your credit scores anyway. Save up, buy something very used, and pay in cash. 6.) Wait for the CAs response after sending your DVs. If you feel they've provided adequate information to validate the debt, then you can start negotiating a settlement/payment plan at that point. Keep all your correspondence in writing and send important docs via CMRRR.
I have been doing creditor negotiations for years now and here are my suggestions: 1. Do NOT agree on anything higher than 30% on your BOA (i would say 35% TOP and ONLY if you cannot deal with them any longer, but i would stick to 30%). They can settle it for you in up to 12 payments. 2. Do NOT settle AMEX for more than 35% over 6 months. You can even get as low as 25% if you have it as a lump sum. They will make threats, they might get angry, they will tell you that its not possible, etc. Remember, its their job to get as much money out of you as possible. They will not just call you and tell you that they can settle your account for 10% over 6 years, so keep in mind that it might not happen right away. To paint an easy picture---they are getting paid to make sure that you pay as much as possible. Thats the way they feed their families, and if they are not being aggressive, they will be replaced with someone who is. Thats why these people often step outside of boundaries and will tell you something that is not true. I would suggest that you google and read FDCPA. This will give you an idea of what collectors can and cannot do. Then, when you talk to them, the deal is basically you can pay them 2880 on BOA in 12 pmts of 240, and 6 payments of 542 to AMEX. You can also wait and save up and then pay a lump sum, in which case you will offer them 5-10 % lower than what i stated in 1 and 2. If they try to scare you with a lawsuit, tell them that: 1. there is nothing to garnish from you, 2. even if there is a lien on your home you dont care cause you are not planning to sell or refi it, you got a good interest rate on it anyway, and the lien wont make them any money, 3. you are not employed, and there is no paycheck they can go after, 4. you do not have a bank account in your name that they could go after, and 5. tell PRA that they would actually have to prove something in court first cause you will show up and that they better have a witness from original creditor for trial, tell NCO that you will demand private binding arbitration immediately, which will cost AMEX more than the account balance. Dont worry about what this stuff means lol, ill explain if you want, and more importantly do not try to use those lines if they are not making threats to sue you. Remember that if you treat them nasty and make threats or give them attitude, they will not be nice to you in response. So if you happen to speak to a nice person, be very nice back, its harder to say no to a nice person than to an A$$ H...E
