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Credit issues and thinking about a secured credit card?*

I have made a lot of bad choices in my life and have fell on hard times before. I now want to clean everything up and live a better life. I am close to $30,000 in debt between credit cards, a repo on my car, evictions, bad checks, medical bills, and other crap I have done in the past. I have thought about filing bankruptcy but I don't think that will help all my issues (like the evictions), so not sure if it is even a good option for me. The last time I started to clean up my credit I had an unsecured as well as a secured credit card and a loan for my car. I ended up being laid off and not having any savings. So I lost everything (including the apartment I was renting). Because of my decisions I lived in a homeless shelter for 3 months with my kids. I now have an ok job but live pay check to pay check. I always worry about what I would do if I had to move, due to credit issues and evictions it was hard enough to find this apartment. I can't even get a bank acct to save money if I wanted to. I have tried to pay the bank back but that I am sure will be a question in itself (they sold it to another company that wont send me a statement, they just want me to send a money order with out a statement). I have though about doing a prepaid credit card (not a secured credit card) just so I don’t have tons of cash on me at all times. Any suggestions on how to start getting out of debt would be appreciated, or am I just skrewed for the next 6 years or so (it has been over a year since my last evictions or credit anything). I know some of the stuff I did when I first turned 18 well be falling off my credit history, but I doubt that will really help my score much (but I do look forward to seeing it gone). I know I can’t live in this apartment for 6 years as my son and daughter will be too old to share a room, so I need help with the evictions problem (I may put that in a separate legal question). If I had a secured credit card before and defaulted on it would that prevent me from getting another? Also would it help my credit situation at all having a secured credit card? I know I can afford to send about $300 off on the 1st to process the card, but that is money I usually have saved in my purse for expenses in the middle of the month, so I would have to charge those expenses. Would running the card up to the max credit each month be bad IF I pay the entire balance each month? Maybe after a few months with out having the cash in my pocket I wont have to use that money as much and the card wouldn’t be ran to the max, but because I live so close to pay check to pay check it is hard. I am also in school and will be done in about a year and a half (so better job then). Any advice would be appreciated. I will be 25 in 6 weeks and I want my life back and bad (ok horrible) credit is stressful and in a way has prevented me from doing anything to better my situation. I know my credit issues are my fault and I have learned my lesson, but now I want to know if there is anything I can do about it. I also forgot to mention my credit score (almost a year ago) was from the high 400's to the very low 500's (the highest was 516). Last bit of detail for now is some of the debt that is on my credit is reported two or three times by the same collection company. I did file a dispute but it doesn't seem that the dispute went through. Would getting these duplicated debts off my report help any? I guess my opinion is no matter what I do i will have bad credit and nothing short of having $30,000 and pay it all off will help. Again, any advice is appreciated, thank you.

Answers:

1) file for bankruptcy..whipe the slate clean and start afresh..learn from your past mistakes and move on with a clear concious...get yourself a debt card from wal-mart and put your money on it whenever you get paid or what ever..no used worrying yourself silly trying to pay all those people and not getting anywhere

2) I think it's great you are moving in the right direction. With your current credit score and the fact that you're wanting a card that will help improve your score, there are very few options in today's market. But there are options. The Eufora Elite is probably the best for you because it's guaranteed issue AND reports to the credit bureaus. See the link below for more information.

3) Wow, you really are in a mess. There is hope. I went through something similar and there is light at the end of the tunnel. The first thing you need is what they call a "pre-paid debit card" I used www.wiredplastic.com and that helped. It does cost a few bucks in fees but it will get you away from cash and learn to start managing with a card. It will also let you save up some money like a bank. They will also take direct deposit. Next, you need to consult with a bankruptcy atourney. You sound like a good case for a chapter 7. You will need $500-$1,000 to get someone to do a decent job. When you go to see them, you have got to have a detailed list of every single person you owe money to. Even if you owe $20 to Aunt Jane, it goes in the paperwork. After your bankruptcy has been finaled, put some money down on a "secure credit card". Charge no more than 10% of the limit and make your payment on time every month. This will re-build your credit. If you get a secure card for $300, you will never charge a balance of more than $30. You may even pay it off every month so you never have to pay intrest on the balance. Just keep charging the 10% of the limit and paying it off. NEVER max it out. Not even once! It is a common misconseption that if you have a collection on your credit report it will drop in 7 years. that is NOT the case. When a bill goes to collections it is stil considered an open and valid debt. These will never go away. It takes 7 years after it is closed. That means 7 years after you paid them off or filed bankruptcy. Good luck!

4) I'm sorry you've fallen on hard time but I'm also very impressed at how you've admitted to your wrongs and trying to make it right again.....awesome. What you need to do is start over....be very organized and be diligent in repairing your credit...don't pay someone else to do it for you. Get copies of your credit reports from all 3 bureaus...you're entitled to a free one each year. For their mailing addresses look on their websites: equifax.com experian.com transunion.com When you get them, make a photocopy and put them in a binder separate them by each credit bureau. Keep all correspondence from/to them in it. Get a highlighter and highlight all the accounts that are overdue/delinquent/collections etc.... If there are any accounts that past the 7 year statue of limitation dispute them so they are taken off. As for the collection/overdue accounts get a letter of validation from the credit bureau NOT the creditor. Once you get the letters with the proper account #'s and $ amounts then get to work paying them off. Contact the creditors in writing and negotiate payment: 1. In full 2. If not in full negotiate a repayment plan 3. Make sure you request a pay for delete option so it's taken off your report when you're done paying them. 4. Only use money orders/drafts to pay and keep copies! 5. If creditors start calling you send them a 'cease and dessist' letter that saying they can only contact you via mail. Save as much as you can while you're repaying your debts. It's a great idea to put money on a pre-paid card....it's much more secure (just don't lose it) If you ever do have to move just rent a place from an individual rather than a building management party so they don't do credit checks and all that. Keep yourself and kids safe and it will all work out. Best of luck to you.

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