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Not sure what the correct group to post this is because it could go anywhere.... I'll apologize in advance for being overly wordy(i ramble lol). Ok, So here's the details: I'm 31 years old, had great credit in my early 20s, then got involved with substance abuse - long story short got addicted to pain medication thanks to an injury as a result from an accident and ended up being a straight up "junkie" - vehicle ended up repod, got divorced, racked up some CC debts, various cable bills/cell phone plans, a major hospital bill, and other debts, and basically skipped out on all of em for years. The Happy ending to my story is I'm almost 3 years clean, Have a good job now, Have a car which I've made on time payments on for just under a year, checking account/savings account, and have started the very long process of trying to dig my way out of the hole I've dug by trying to pay off some of my debts by negotiating settlements with CAs and paying lump sums(best deal I've managed to negotiate so far is $287 of a $787 debt). The bad part is that while I've [aid off a few things I'm still ridiculously deep in debt(If I include student loans which I know I'm never going to be able to ditchI'm probably $40k+ in debt, without student loans It's probably 18-20k). My credit score sucks ****(score is 561 according to experian).  The majority of my debt's last date of any pmt was 2011-2012(I think I have 2 cell plans going into collections in 2013/14). I don't want to spend 7 more years dealing with no ability to qualify for a Credit card or get an apartment if I declare bankruptcy(although ironically while my credit history with virtually every other service  became toxic, as far as apartment rental history goes I have almost 7 years of good standing/lease fulfilled in that regard) nor do I want to suddenly force the burden of repaying my student loans(have both private and federal ones) onto my parents who co-signed them. From what I've been reading the Debt consolidation services out there seem to not actually help my credit score(although it can't get much worse). I've been offered a secured card through a couple of the companies who I have settled debts with as well as USAA, and I'm thinking about opening up at least one with the hopes that They might help rebuild my score(Idk for sure about the CA settlement one, but I know the USAA one stated if I kept a good pymt history they would eventually change the card into and unsecured one, and whatever amount I initially put up would be put into a CD so I'd receive interest during the 2 years it was my "collateral" for the card. My question is what should I do to resuscitate my credit score? Should I go /w the secured cards to open up additional positive lines of credit, or will they end up not doing anything?  Continue trying to contact the various CA's that have contacted me(plenty of the debts I haven't heard a peep from in years but just show up on my CR) and keep trying to negotiating settlements myself and paying them off, or go through one of the Debt consolidators? Just wait everything out for another 3 years and accept that I won't be able to get an apartment by myself? Or do I go /w the nuclear option and hit the bankruptcy button? If y'all need to move this topic somewhere else that's fine, I wasn't really sure where it fit best, but figured since I'm focusing on repairing my credit worthiness this thread might be best. Thanks in advance to anyone who can help!

Just to summarize:

Current Age:31

Current state of residence: TX

Debts:40k+(16-20k student loans, 18-20k credit cards/medical/other)

Credit score(561)

Employed full time, has checking account, savings, Direct deposit, active vehicle loan /insurance /w current pmt history

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All right, you are in Texas which means if they sue you they cannot garnish wages.  I would not pull the BK pin because for me personally I would not want to stick parents/co-signors with my student loan debt which cannot be discharged in BK anyway absent some extreme hardship which your situation likely does not equate on their scale.

I would continue negotiating settlements and/or let stuff drop off while building positive trade lines.   Some are not in favor of secured cards but if you can get one through a reliable source like USAA, your bank or credit union you at least show an on time payment history and improve your average age of account. 

DO NOT use a debt consolidator.  There are no honest ones and quite frankly you are wasting money paying them to do what you can do on your own and put those funds towards paying bills and managing debt not a scheme to separate you from your money.

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@Clydesmom gives great advice.  Bankruptcy would't help you in this case since half of your debt is student loans (which are not bankrupt-able).    And stay away from the Debt Consolidation schemes!  

Congratulations on getting and staying sober.  I'm sure it wasn't easy and I know that old debt is just a nagging reminder of your old habits.  It totally sounds like you are on the right track, even though you are eager to start fresh.  Just keep plugging away living below your means and negotiating settlements where you can.   Keep current on any bills/debt ahead of anything in default.   Make sure your rent and utility bills are paid on time or a little early if possible.  Keep up with filing your taxes.   You can try to defer your student loan payments because of hardship, that might buy you some time.  But the government is going to get your money one way or another so do not ignore that monster student loan.  Your creditors might not be able to garnish your wages but I'm pretty sure if your student loans are federally insured then the government can go after your income.  Correct me if I am wrong, I'm not a lawyer and am unfamiliar with garnishment exceptions in Texas.  

Keep in mind that a high credit score is not the key to happiness.   It just means that you borrow money and it pay it back....a lot.  Debt and the almighty Credit Score have not been a friend to you so far, right?  You're working your butt off to pay for stuff you bought years ago.  That cheeseburger from 2011 has cost you a fortune lol!  Debt rarely buys peace of mind or stability.  One bad month and it can become a nightmare.  

As far as needing a high credit score to get an apartment, a fair amount of landlords will consider letters of recommendation from your former landlords and statements from your utility companies if you explain your situation.  Just ask them to write something stating that stated how long you lived there and that you paid your rent on time (or early) consistently.  You can show them your auto loan and insurance payments and since you also have direct deposit, you can establish a pattern that shows your monthly income.  It's not 100% foolproof but a reasonable landlord will consider your current payment record over mistakes you made in the past.  Be prepared to offer a larger deposit as well.  If the landlord has a few months rent in advance they are more likely to take you seriously.  

To buy a home (easily) you either need a Good Credit Score or a Zero Credit Score.  So decide which way you want to go and head in that direction.  A zero credit score requires all credit cards and lines of credit to be closed out.  There can be no interaction with debt, even minimal, or it will result in a low score.  A high credit score requires borrowing and paying back debt over and over.  But this is risky (as you know) and one small mistake can tank your score quicker than you can say "I hate credit cards" :)

Keep at it and I wish you the best of luck.  Please keep us posted on your progress!  Slow and steady, you're doing the right things, in my humble opinion.  

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I agree that you shouldn't do a BK. You can't forgive your school loans and that's 1/2 your debt. So you will be basically declaring BK for $20k. You should definitely not hire a debt consolidation company. I have never heard of an honest one that's looking out for the consumer. You can totally do it yourself. Just hit up your creditors saying you can pay only a small % of the debt and negotiate with them from there. And let them know that you may file for BK if they can't lower your debt- which will give you more leverage in negotiation since they will get $0 if you declare.  

Going with a secured card is a good idea. Need to start somewhere and that's probably your best bet to rebuild. Good luck!



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Look at each debt you have. Now, EXCEPT for the student loans, how many of those debts have a last payment date of may 2012 or sooner? Cross those off, they are out of the SOL, if you get sued on them, you can win. They are going to be on your credit record anyway for another 3 1/2 years.

Now if you want to pay the remainder off, this is how you stretch your disposable income to cover all your debts.

First take the smallest debts, and try to get a settlement for 40% or less.  send each company you owe something until you get enough to pay off that settlement.  If you can't then you can figure them into the equation below.

Now take each debt you won and figure out its % of your total debt. 

Take all disposable income after paying basics.  say you have 1000.00 to pay all your debt with. 

Now take the largest debt--what percent did you assign to it as to your total debt? That's what you pay on it monthly. So if it is 68% of your total debt, you will pay 68% of your total outgoing disposable income toward that debt.  Then move on to the next, so on and so son.  

It doesn't matter if it doesn't meet their min. payment. You call them up and tell them this is what I have monthly.  period. Tell them you will pay that amount faithfully in return they quit charging interest on balance. (depends on who owns the debt, they might be agreeable) Just plug away they will go down.

Some people say you should pay off the lowest debts first, then tackle the bigger ones.  You can use that plan in reverse,  paying the smallest debt the largest percentage assigned to #1, and the largest debt the smallest %.  As each debt is paid off, take that money and plunk it down on the the next debt to be paid off, until they are all paid.

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Thanks for the advice... And yeah i know its going to be a long road back but I really have no fear of being sued by any of these creditors(the vast majority are easily past 2012). The few things working in my favor are the fact that as I stated before I do have  a good job now so I have more ability to pay things off as well as a little more leverage when negotiating settlements simply because i can usually do most lump sum options, and as far as recent history from 2014-now, I have one bad debt I'm in the process of paying off, and everything else from that point(insurance/utility/vehice loan) are all set with auto pay and have a sparkling clean payment history. I'll definitely keep y'all updated, and again thanks for the advice / encouragement!

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