Advice for newbie just starting out

[WhatNext]

Hi all,

I've been reading this forum for a few months now but I'm still at a loss as to what I should do regarding my particular situation. I got into trouble with my credit cards in 2003 (I had an illness in the family and a low-paying job) and basically stopped paying all of them at that time. Of course, shortly thereafter I started getting calls and letters from original creditors, and then collection agencies. I didn't respond to any of it. All told my credit card debt is probably around $15-20K with a number of different companies (Cap One, First North American National Bank, etc.).

Now, a few years later, I get an occasional letter from a CA or a legal office, none of which I reply to. I pulled my credit reports for the first time last year and my accounts have been sold and shuffled around several times. I also have about $100K in student loan debt that I *do* pay on time every month.

I'm going to pull my credit reports again soon, and I believe the SOL for the state of California (4 years), where I live, is just about up for most of my accounts. My question is this: should I try and start to address the negatives on my credit report now, or try and wait until the SOL has run so that I have that extra layer of protection? My sense is that contacting anyone now will just be like poking a beehive and I don't have the will or the financial resources at the moment to take on any of the CAs. Also, why haven't I been sued yet (knock on wood)? Is it that I have no assets (no car, no home) and such large sums of student loan debt that they see that trying to sue me would be like getting blood from a stone?

Finally, I've become a better saver and have a savings account with an online bank that totals about $5K (a large sum for me ). Can CAs see this money and could they take it if they sued?

Thanks for any info/advice in advance!

[someonesomewhere]

I've been reading this forum for a few months now but I'm still at a loss as to what I should do regarding my particular situation.

Always helps to ask specific questions.

I'm going to pull my credit reports again soon, and I believe the SOL for the state of California (4 years)

2 years for oral contracts, 4 years for all others.

http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml

My question is this: should I try and start to address the negatives on my credit report now, or try and wait until the SOL has run so that I have that extra layer of protection?

How good are your records? Any old CC statements saved? DOFD is the date you wanna know. Sometime this year, if all your DOFDs were in 2003, the SOL is gonna run out. Unless you're planning to do something like a buy a house or car in the next couple of months, I would try to lay low and just let the SOL expire. Once the SOL expires, then you have WAY more leverage and the threat of lawsuit and judgement goes away.

have a savings account with an online bank that totals about $5K (a large sum for me ). Can CAs see this money and could they take it if they sued?

In theory, yes, but if they haven't been bothering you then chances are good they are gonna let it slip away. However, Cap One is notorious for filing lawsuits within 6 months of SOL expiration. Check your records from them to protect yourself. Don't contact any OCs or CAs. You don't wanna "wake the beast" from it's slumber before it dies a death of SOL.

Were I in your shoes, I would sit tight and calculate when the SOL has run on each account. Some might be in May. Others perhaps not until October. But figure it out. If they are all close together, say all in May or June, then I'd wait until the following month and launch into Credit Repair mode on all adverse TLs.

You might consider a telephone recorder as that could be a powerful weapon for you. CA is an APS so you have to tell 'em you're recording the conversation.

http://www.rcfp.org/taping/states/california.html

But perhaps they are dumb enough to knowingly violate the law on tape. That's more leverage for you when you start negotiating. You're well past timely DV, but DV is worth a shot as well.

But again, I wouldn't do anything just yet.

Just because the SOL has expired doesn't mean some twit CA or OC won't give it to a lawyer to file suit. If you are served with a summons and complaint, DO RESPOND! Don't let them get a default judgement against you. Even though the SOL has expired, you will still have to file an answer to the lawsuit stating the SOL has expired.

Finally, a little light reading.

http://www.debt-consolidation-credit-repair-service.com/forums/showthread.php?t=264049

[WhatNext]

Thanks for all of the info! I have no plans to buy a house or car anytime in the near future, so I think I may just wait it out for a bit longer.

I haven't kept very good records (when I got collection notices, I didn't want to think about them so I threw everything out), and the information on my credit reports isn't all that helpful in telling me when the last activity on the accounts was. It's almost been a year since I last pulled my CRs, so I think I may pull them again soon and sit down and try to figure it out once again.

Again, thanks!

[someonesomewhere]

Thanks for all of the info! I have no plans to buy a house or car anytime in the near future, so I think I may just wait it out for a bit longer.

Then time is on your side, yes it is.

I haven't kept very good records (when I got collection notices, I didn't want to think about them so I threw everything out)

Been there, done that.

It's almost been a year since I last pulled my CRs, so I think I may pull them again soon and sit down and try to figure it out once again.

Here's some perhaps helpful reading.

http://www.debt-consolidation-credit-repair-service.com/forums/showthread.php?t=264049&highlight=primer

You get a free pull of all 3 reports once every 12 months. You might wanna save it for a couple months.

[hajimon]

is i disputed everything negative on my report. Some fell off some didnt.

It seems to me that your not worried about your score so waiting to sol is up is no problem.

h

[zwiepak]

Hi all,

Finally, I've become a better saver and have a savings account with an online bank that totals about $5K (a large sum for me ). Can CAs see this money and could they take it if they sued?

Thanks for any info/advice in advance!

Yes, and yes. (although I do agree with someonesomewhere the chances are decent it'll be ok)

If this were me though, I'd "safety" that 5K quick... Seriously, as the saying goes, an ounce of prevention is worth a pound of cure. All it takes is one unscrupulous creditor or CA to zap that account should they get wind of it. Even if they do it illegally and you can sue the warts off their arses, you're going to have to move mountains of time and guano to get it back IF you can... Just think how much it would suck to wake up one morning and find it GONE, and all the crap you'll have to go through to get it back, with a very real possibility you won't.

Then again, this is my opinion on this matter, and I am known to be overly paranoid at times, so take it as you see fit. So I guess the REAL question is, how much is that 5 large worth to you? Enough to chance it at 5-10%??? 10-20%???

[someonesomewhere]

http://www.debt-consolidation-credit-repair-service.com/forums/search.php?searchid=127728

zwiepak makes a good point about protecting that money. One way you could do it, assuming the money could not be taken in a judgement, would be to hide it in an IRA.

There have been several threads, at least, about money in IRAs, 401k, 403b, etc. and whether they can or cannot get seized in a judgement.

Assuming it's safe in an IRA, and that probably depends upon your state laws, the IRS lets you use up to $10K for a first time home purchase without having to pay the 10% penalty.

http://www.irs.gov/publications/p590/ch01.html#d0e8223

First home. Even if you are under age 59½, you do not have to pay the 10% additional tax on up to $10,000 of distributions you receive to buy, build, or rebuild a first home. To qualify for treatment as a first-time homebuyer distribution, the distribution must meet all the following requirements.

1. It must be used to pay qualified acquisition costs (defined later) before the close of the 120th day after the day you received it.

2. It must be used to pay qualified acquisition costs for the main home of a first-time homebuyer (defined later) who is any of the following.

a. Yourself.

b. Your spouse.

c. Your or your spouse's child.

d. Your or your spouse's grandchild.

e. Your or your spouse's parent or other ancestor.

3. When added to all your prior qualified first-time homebuyer distributions, if any, total qualifying distributions cannot be more than $10,000.

This is a Traditional IRA, not a Roth IRA. The rules for a first time home purchase appear to be more restrictive for a Roth, oddly enough.

http://www.irs.gov/publications/p590/ch02.html#d0e10412