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Thread: Bad credit

  1. #1
    Senior Member Cupid213's Avatar
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    Sad Bad credit

    Hi ladies I need a little help....... I just turned 22 I have a credit score of 450 So I cant get shit!!!! I need to build my credit score up but I dont know how? I was thinking I should pay everything off which is about 8000 but then some one told me to file bankruptcy. What should I do???

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    God/dess NinaDaisy's Avatar
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    Default Re: Bad credit

    I assume if you're dancing that paying the $8000 will take some time, but is doable with some discipline.

    Part of what lowers your credit score is proportion of debt to balances. In short: if your cards are maxed out, it messes up your score.

    Typically it's best if you're carrying a balance that it's no more than 25% of your limit.

    Bankruptcy lasts for 7 years, and with the new laws I don't think credit card debt is exempt anyway. Pay off your debt.

    Also, getting a secured credit card is a good way to re-build credit.
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    God/dess Emily's Avatar
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    Default Re: Bad credit

    $8000 is not worth declaring bankruptcy over. That's nothing to ruin your credit even more/longer over.

    paying it off will help, but having a good history is key. You obviously have missed/late payments and those hurt more than debt. Before I started dancing, I had about $25,000 in credit card debt and $20,000 in student loans...a car loan and a mortgage, and I still had an awesome credit score.

    It's all about paying people back, and on time.
    Last edited by Emily; 08-14-2006 at 11:54 PM.

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    Senior Member Cupid213's Avatar
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    Default Re: Bad credit

    Thanks Ladies The thing is I dont have creditcard bills!!!! I never had a charge card Just things like phone bill,a lot of medical bills,

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    God/dess Bella21's Avatar
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    Default Re: Bad credit

    Give it time to grow, you're only 22. Look around for a card with a good rate. Maybe you can transfer the costs to something that doesn't have such a high interest rate. Be patent, it's not worth going bankrupt.
    If you think school is hard, try being stupid.

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    God/dess VenusGoddess's Avatar
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    Default Re: Bad credit

    You can't go bankrupt these days. You'll just be forced to repay...and it'll go as a little "black mark" on your credit report (there's no such thing as a clean Chpt. 7 break anymore). You are much better off paying off your debt yourself.

  8. #7
    God/dess Deogol's Avatar
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    Default Re: Bad credit

    ^^^

    Yep. With the new laws that took effect, there is no such thing as bankruptcy these days!

    She needs to either:

    1) Reduce her costs - get rid of the cable TV, the cell phone, bare minimum land phone, etc.

    and/or

    2) Increase her income in some way. A second job or what have you?

    and/or

    3) Find a room mate to help offset some of the living costs. This is a society filled with two income earners in the family.

  9. #8
    Banned Melonie's Avatar
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    Default Re: Bad credit

    Yep. With the new laws that took effect, there is no such thing as bankruptcy these days!
    Actually, what's now available to persons who earn more than poverty level is a Chapter 13 bankruptcy. Unlike the Chapter 7 bankruptcies of the past where the bankruptcy court simply 'wrote off' all pre-existing debt responsibilities, under Chapter 13 the court sets up a monthly payment plan which typically runs for 5 years. Thus if for example in the past somebody had a $10,000 car loan and $10,000 in credit card debt and filed Chapter 7 bankruptcy, the car would be repossessed and both the car loan and credit card balances would be 'written off', with the bankruptcy filer being able to walk out of court not owing any money to anybody.

    However, under today's Chapter 13, the car will be repossessed and auctioned for say $7,000 leaving the debtor on the hook for $3,000. The credit card merchandise will be repossessed and auctioned, leaving the debtor on the hook for maybe $7,000. The court will then mandate a payment plan where the bankruptcy applicant must continue to pay say $50 a month to the auto loan company and $120 a month to the credit card company for the next 5 years to pay back those 'shortfalls'.

    When the bankruptcy applicant does get through with bankruptcy court, the $170 a month due to previous creditors under the court ordered payment plan now counts as pre-existing debt load in terms of being granted new credit. The court will also periodically review the bankruptcy filer's tax returns and employment and personal spending throughout the 5 years the court ordered payment plan is likely to be in effect. Thus today going bankrupt is for all intents and purposes little more than 'arbitration' with unpaid creditors, plus a virtual guarantee of annual IRS audits.

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    Default Re: Bad credit

    I have horrible credit, and like you have never even had a credit card. Mostly old medical bills and student loans. Get a secured card NOW!!! That will raise your credit score more than anything. Just make sure you make your payments on time and DO NOT max it out. Buy one small thing and pay it off every month. Start paying your student loans on time every month. Get a copy of your credit report and try to pay off something every month if possible. If you have very high medical bills and can't pay it full all at once save money towards the debt every month, or if you can make payments on it every month. You will need to pay all bills on time!!! One late payment can seriously affect your credit score. Rebuilding your credit is possible.
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    Default Re: Bad credit

    From my own personal experience, I would recommend NOT filing for chapter 7. I filed and to be honest, if I woulda got my head out of my ass and worked with the people collecting rather than file, I would have been better off. Although I have been able to get car loans, home loan etc (all at good rates), it took time. AND I had over 30K in debt. If you pull yourself out, even if its slowly, it still looks better to creditors rather than a bk! JMPO and from my experience. All of your creditor will work with you, just talk to them, don't avoid them.

    Oh & I totally agree with the others... reduce your "expenses"... I cut out starbucks & everytime I wanted one, I would take that cash & stash it away... It was worth it! I reduced all my bills... by thinking "frugally"

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    Default Re: Bad credit

    I filed Chapter 7 2 years ago before the laws changed. I don't regret it one bit. That being said, I wouldn't have done it if I only owed $8,000 and I sure wouldn't try it now because of the new law. I was able to keep my car. you are allowed to have a certain amount of equity in your car, at least in Florida you are.

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    Banned Melonie's Avatar
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    Default Re: Bad credit

    In order to file Chapter 7 today under the new law, your earnings must be at or below 'poverty' level. The court will look in detail at your income and your living expenses, and if your income can provide for ANYTHING over and above food and rent and basic necessities your creditors will push the judge to force you out of Chapter 7 and into Chapter 13 so that they can get paid 'something' instead of nothing through a court ordered 5 year payment plan.

    Also the new federal bankruptcy law passed last October supersedes the provisions of many state laws which protected bankruptcy filers' equity in houses, cars etc. This was specifically added to stop 'professional bankruptcy filers' who chose to run up astronomical amounts of credit card debt, personal loan debt etc. - then they would invest all of this borrowed money in the down payment for an expensive new house in a state which offered equity protection for the bankruptcy filers' house - they would then go bankrupt on all the debt and also be allowed to keep the house that they had purchased with the borrowed money that they had no intention of paying back. Then 3-4 years down the road when the bankruptcy had 'cleared', they were free to sell the house and pocket the proceeds. Lots of million dollar houses in Florida were sold just for this purpose !!! - but no longer. The federal law now lays down dollar limits for equity exclusion for houses, cars etc. and the 'good ol' days of being able to keep your $500k house and $40k car after a bankruptcy filing are over.
    Last edited by Melonie; 08-15-2006 at 07:04 PM.

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