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Cap one wants to reaffirm w/ reduced balance


Eric2OO2
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Today I received two reaffirmation agreements from my attorney. They are from Capital One. One the first offer they are willing to reduce my just under $3500 balance to $500, with a starting credit limit of $600. 0% interest for 3 months, 14.9% thereafter and a annual fee of like $42 billed monthly at $3.50. I believe I am going to trash this offer.

The 2nd offer - Capital one will reduce my near $350 balance to $300, issue a starting credit line of $350. The rate is 0% for three months, than 14.9% thereafter with the same annual fee of $42 billed montly at $3.50. Yea, the annual fees sucks but I am thinking about signing the reaff for this one. This way I am guranteed some unsecured credit immed. out of BK 7.

What do you guys reccomend ?

( I assume the old account will be listed as closed, included in BK and this account will appear as just a new account ? ) Or would I not be so lucky ? TIA !

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If either or both of these accounts were IIB, then you have no reason to reaffirm on either. Assuming you filed BK 7, they're discharged and you don't owe them anything. Sounds to me like Crap 1 knows they had a good fish on the hook and wants to skin you again...

Someone may argue that having unsecured credit immediately after BK is a good thing...but...I don't think so. Remember why you had to BK in the first place. And, this account isn't going to help with lower car financing or mortgages anyway....

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I know why I had to file BK 7 - because I had monumental debt in relation to my income. The limit on this card would be $350. Even if the account was maxed ( which wouldn't happen unless an emergency popped up) it would be something I could handle. Having a new tradeline immed out of bk7 would greatly help my rebuilding efforts.

I would like to reaffirm on the $300 offer, however I am still undecided.

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If you don't take both offers, you're going to still have a CRAP 1 IIB on your CR. Crap 1 is currently screwing FICO numbers for everyone with their "we don't report credit limit" policy. If there is any positive in the TL they're offering you, its got to be very, very small. They're not doing you any favors...ask yourself why they're even offering. Now is a good time to be paranoid.

If you want a positive TL immediately, open an account at a credit union, and get a secured card from them. I'm sure the impact on your scores would be more positive.

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If it were me, I'd trash BOTH 'offers'. Crap1 really is NOT good as a credit rebuilder and for exactly the reason already stated - Crap1 refuses to report your limit. So, with a $350 limit - that they don't report - say you use $100, they will show that $100 as your high balance AND it will show as your credit limit and it will LOOK like you're at 100% utilization when you are not. This is VERY bad, it will screw your scores at a time when you are trying to rebuild them. They are definitely NOT doing you any favors, and its also quite possible that they BK judge won't approve the reaff's anyway - and the judge has the final say. If he/she feels reaffing unsecured debts would be injurious to your fresh start, he/she won't approve.

You will be much better off post-discharge with a secured card with a $350 or $500 limit, one that does not report as secured and one that PROPERLY reports your credit limits.

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