Introduction $69K debt

Discussion in 'Credit Talk' started by luisanator, Dec 27, 2009.

  1. luisanator

    luisanator Member

    Hello, I would like to formally introduce myself to the board. I have been reading this board for 2 months now and have sent my first DVL. I would like advice on how to proceed.

    My story is that I was running my own business and making pretty good money, but wanting to grow quickly I used credit cards to cover personal and business expenses. Last year in November 2008, I lost my biggest client and was unable to collect unemployment. I am just starting to get back on my feet with a temporary contract and now have the means to negotiate with my creditors, not to mention buy food and pay for gas.

    My total debt is: $69K
    Of this amount, $34K is in student loans (which I have maintained current due to deferment for all of but $6K)
    $22K is credit card debt
    $11K is car repo debt

    In the last several months, I was out of the country working for a company where I only received room and board, so I did not manage to save up any money and was not able to respond to OC in time. This was better than sleeping on my aunt's couch and feeling miserable. Hence, I think I may have screwed myself over on the 30-day window, but I am stay hopeful.

    I pulled all 3 CR and have identified that my credit cards are all in collections. My repo car debt is now showing up. And 1 of my student loans is also in collections.

    Credit Card Debt:
    Bank of America, with Sunrise Credit Services Inc $11K
    American Express, with NCO Financial Systems Inc $4K
    Bill Me Later, with American Coradius International LLC $2.5K
    Chase (CC), with Enhanced Recovery Corporation, $5K
    Chase (Overdraft w/ Bank), with OC $500
    Verizon, with OC $187

    Student Loans:
    US Bank, with National Enterprise Systems, $6K

    I would like to contact Chase (Overdraft w/ Bank) and Verizon to pay for a deletion using the sample letter.

    I would also like to send each CA a DVL and try to negotiate a pay for deletion, paying the smaller balances first.

    What would you recommend for a good strategy?
  2. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Welcome to the forum, and best of luck to you as you seek to clean up your credit reports.

    I think it's a good idea to contact Chase regarding the overdraft and Verizon, explain to them your situation, and tell them you wish to make them whole in return for deletions. We're talking about relatively small amounts that are still with the OC, so it's a shame they're hurting your credit score so much. Hopefully they'll be willing to work with you in light of your circumstances.

    Have you received communication from any of the CAs yet regarding the other collections? If there is any incorrect information that you're concerned about (amounts, dates, etc.), be sure to dispute them through the CRAs first before dealing with any of the CAs. Do everything in writing and keep impeccable records of your efforts. Negotiate hard for the deletions too. A paid collection is basically just as damaging to your credit score as an unpaid collection, so you'll want to always keep your credit score in mind as you negotiate.
  3. lBJ23

    lBJ23 Member

    I would focus on settlements with the large accounts. That will off course depend on the funds you have available. There are some substantial savings if done properly.
  4. luisanator

    luisanator Member

    Thanks for the advice guys! I have sent out DVL's and am tracking everything in an Excel spreadsheet. I actually just received a request from GC Services Limited Partnerships regarding the car loan. It turns out to be $11K from the car repo debt. The question I have is that the car repo debt is under my former corporation, which I closed down in 12/31/2008. The car was repod on 6/1/2009. I am thinking of sending them a DVL but am not sure how to address them: as the closed corporation or my name? Also, what would be a good strategy to follow? Thanks in advance!
  5. cap1sucks

    cap1sucks Well-Known Member

    The question is whether or not you gave a personal guarantee to buy the car. You may have had the title made out in the corporate name but if you used your personal credit as guarantor then you are the one in trouble.

    I never give any form of personal guarantee when establishing credit for my corporations. I start new corporations as one of my businesses, build the credit for the corporation, get a solid income coming in even though it is small and then sell it as a seasoned corporation with seasoned credit, all without ever giving personal guarantee of anything. It makes no difference whether the corporation might only be making a couple of thousand a month and often less, credit can be established without personal guarantee in a few months.

    So if you gave a personal guarantee then you are in deep problems and will be expected to pay the defaulted balance.
  6. luisanator

    luisanator Member

    Thanks Cap1sucks. I did extend personal credit for the car. So a DVL would be the way to go while I figure out what the CA is going to try to do? In the letter they said that they do not report to CRA so I imagine they would try to get a judgement against me once they pierce the corporate veil. Besides a DVL, would you recommend any other strategy?
  7. cap1sucks

    cap1sucks Well-Known Member

    A debt validation letter isn't going to do you any good if their initial contact with you was more than 30 days ago. Trying to pay off your debts isn't going to do your credit one bit of good either unless you can negotiate your way back in with the original creditor. That isn't easy to do but does work with smaller banks sometimes. Don't hurt to try.

    As far as the car is concerned, you should immediately understand that it will soon be placed with a lawfirm with instructions to file suit against you. That will happen with some if not all of the other debts as well so you might just as well wait for the inevitable rather than trying to pay off the debts to debt collectors. That is true if the initial contact from the debt collector has been less than 30 days ago. If that condition is existant then you definitely want to send a DV but you are highly unlikely to find a really good DV letter anywhere on the net. If you do find one then the way to determine whether it is a good one or not is to see how long it is. If it is long and wordy, has a number of questions it wants the debt collector to answer and/or quotes any law or court cases then you probably should not use it regardless of who says it is the greatest thing since mashed potatoes were invented.

    Keep it so simple you don't even put any account information in the letter. Take care of that by stapling a copy of their original letter to your DV letter. One single paragraph or sentence should be enough.

    I recently received the attached and enclosed letter from your firm alleging that I owe money which you are trying to collect. Please be advised that I dispute the debt in it's entirety. I demand that you provide me with validation of the debt you allege that I owe.
    Sign it.
    You really don't need any more than that 1 simple paragraph although you can add more to it if you wish. That's it. Nothing more is actually needed. Send it certified mail return receipt requested.

    Now then, on to your problem with the car. You can count on the fact that they will get a lawyer and come after you sooner or later and sue you in local court. You need to check with the clerk of the county court to see if you can access your public record on line and if you can then you need to check it each and every day so you know almost instantly when that or any other lawsuit has been filed against you. If you can't do it on line then you need to be checking personally at the clerk's office at least once a week. Once the lawsuit is filed then you need to file your response at the earliest possible time. My links pages can tell you what you need to do in order to get the job done. Certainly you will want to DV the lawyer upon his first contact with you however that may be.
  8. luisanator

    luisanator Member

    Thank you for all your response. I have an update on 1 debt. After I sent a DVL to the CA (NCO) for an AMEX debt, AMEX sent me Settlement Offer. I am glad to see I can negotiate with the OC as this would be a good way to get a PFD, correct? The terms are 55% which I have saved up for, but I am not sure if I should settle since I have read on this board that is just as bad as a collection on my credit report. I also will be moving out of the country in ~4 months and do not want lawsuits being filed against me when I am too far to respond. What would your advice be on dealing with this AMEX Settlement Offer?

    Thank you in advance.
  9. luisanator

    luisanator Member

    I am still working w/ AMEX and they said they do not do PFD. They also said they do all their communication over the phone and cannot respond in writing to my requests. Any advice on what else I can do to obtain a PFD? Just keep calling?

    The current offer is 55% and they said to mail copies of my economic hardship to see if we can reduce that percentage. From what I have read on the forums, AMEX is litigious and since I will be moving abroad in a few months, I am eager to settle this ASAP.

    Thanks in advance!
  10. Hedwig

    Hedwig Well-Known Member

    An original creditor is not going to do a pay for delete. Sometimes a CA will, but it's becoming harder and harder to get.

    You can capture the conversation in a letter and send it to them with something like "this is my understanding of your offer. Please confirm in writing that this is our agreement." You might have to go a little higher than the CSR who answers the phone.
  11. luisanator

    luisanator Member

    Thanks for the post, Hedwig. I am going to draft a letter with my understanding, but I have an additional question. They won't budge on the 55% settlement offer, which I am going to have to take since I would not be in the country and therefore able to defend myself against a default judgement in a few months. They asked me to prove to them my economic hardship. I have a copy of when I filed for unemployment back in 2008, when I lost my job. As I was unemployed, I did not have any benefits to draw on and learned my lesson (pay yourself as an employee so you can draw unemployment). Is sharing this information with the OC a bad idea? How could I negotiate this to get someone above the CSR? Thanks in advance!
  12. luisanator

    luisanator Member

    Just wanted to post an update in case anyone else encounters my same situation.

    I called AMEX and asked for a supervisor (called in the morning, afternoon, and evening). I kept track of the name of the individuals I was speaking with and when I found someone that was willing to work with me, I would ask for him/her.

    I eventually got AMEX to agree to 40% (down from the 55% on the settlement offer letter they mailed to me). They tried to get me to fax a copy of my $0 unemployment and tried to fax me a copy of the new settlement offer, but I insisted that I needed in the mail. Finally, they agreed to do this. I was also offered the Optima card if I paid the card in full (but from what I have read, it is not guaranteed). I plan on sending them a cashiers check at the end of the month and a letter indicating that this payment will satisfy the debt.

    It's not the ideal move, but since I want to avoid any lawsuits and these balances are quite large, settling with AMEX puts me 1 step closer.

    After I mail the cashiers check, I am going to dispute the tradeline and hope that while AMEX is changing the status from "In Collections" to "Satisfied" that they do not respond to the CRA request and it gets deleted. It may be wishful thinking but that's the plan for this item.

    I hope that this helps someone else who encounters a similar situation.
  13. Hedwig

    Hedwig Well-Known Member

    Just be aware that you will probably get a 1099 for the forgiven debt and will have to declare it on your taxes next year and pay tax on the amount. BUT--go the the IRS Web site and read about forgiven debts. There are conditions where you can be relieved from paying the taxes, like if you are insolvent. But you will have to file some paperwork to take advantage of this.
  14. luisanator

    luisanator Member

    Thanks for the head's up Hedwig. I did take the 1099 into consideration and will look into the IRS to see which paperwork I can file to avoid the taxes. I'll post a link once I find it.
  15. luisanator

    luisanator Member

    It's been a while since I last posted, but I have been staying current on my own credit repair and using this forum as much as possible.

    I recently performed a check on all 3 credit bureaus and submitted a "not mine" and correction to errors as needed. Everything seemed to be going fine--I was able to get a lot of things corrected. However, it appears that maybe having done this might have angered some of my creditors.

    I just received a credit report warning that there are 2 suits or judgements added to my credit file (for Equifax, where I subscribed to their monthly alert and unlimited credit reports etc). I have not received anything from these 2 creditors: BoA and US Bank (student loan). In the past, I tried negotiating with them, but I did not have a job or any means to settle the debt. To make matters worse, I moved to Australia in hopes of having a better chance at a finding a job (4.5% unemployment compared to 12% back home).

    Is there any advice you can offer? How do I go about figuring out where in the judicial process this is? I checked the online court house database for a county where I had a permanent address, but I also recently moved my address to a different county that does not have an easy database to search. I am afraid that I may not be able to respond to a lawsuit and receive a default judgement.

    Any help would be greatly appreciated!!!

    Thank you in advance.
  16. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Have you tried calling the court and asking? That's probably going to be the easiest way to get an update. Whatever you do, don't let them get a default judgement against you. You need to respond and protect your rights or get a lawyer if you don't have the time or are unsure of how to proceed.
  17. luisanator

    luisanator Member

    Hi Joshua, I am not sure in which court it is in. The only thing that alerted me was my credit report said a "suit or judgement" had been added to my credit file. Do I have to check in the court where the creditor is listed?

    i.e. for Bank of America it has "Wilmington, DE", so I went online and checked to see which courts it could be and found:
    1. US District Court of Delware
    2. Delaware Court of Chancery

    I signed up for PACER to access #1 above, but #2 does not seem to have an online service. I am in Australia so there is a bit of a time zone difference. Will my only option be to call each court until I figure out where they filled the lawsuit? From what I have read on the forums, the OC will file in their own state. This seems to be somewhat of a jurisdiction issue as my last US address was in California. Any help on tracking down where the lawsuit is or any online search that could help would be greatly appreciated. Thanks!
  18. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    I believe they could also sue you at the last known address on file. From what I understand, creditors don't always file in their own state. It really depends on what your original contract states, and many creditors use different language.

    I would start by determining what address they last had for you on file and checking with the appropriate courts. If you can't find anything there, then move on to the creditors' jurisdictions. I'm not aware of any online system/service that would help with your search.

    Also, have you actually pulled your credit reports to see how the suit/judgement is listed?
  19. luisanator

    luisanator Member

    Thanks for the advice. I checked my local courts and the ones for each creditor. Missouri was harder to figure out than Delaware, but just kept trying until I found them. I re-ran my credit report today and noticed the lawsuits are no longer there... which is odd. I have an Equifax alert that I pay monthly for and I saw that on 12/9/2010 the lawsuits were added on behalf of the creditor's name and now nothing is showing up. My score even went up to 614. Any idea if they were just using scare tactics? Thanks again!
  20. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Very interesting...did you ever find record of the lawsuits with the court? Also, have you pulled your other 2 credit reports to see if they are clean too?

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