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Hi there. I'm just dropping in from the PSF board and had a question.
Here's my situation...I declared bankruptcy 7 years ago after going through a divorce 10 years ago. I, of course, could not declare bankruptcy on my student loans which at that time were about $17,000. I taught school for a number of years and have no other debts (or anything else in my name as far as that goes..). I have been a stay-at-home mom now for 2.5 years...over the last year, I deferred my student loan on the basis of financial hardship as my DH is working 2 jobs just to make ends meet. (at this time I am unable to get even a part time job- long story) ANyway, my student loans are now around $9,000.......Here's my question (s) :
Would it be possible to offer the bank a lump sum of , say $5,000 in cash, and write off the rest of the loan?
If so, how does that affect my already bad credit?
Should I have some of our utilities put in my name so I can start to establish credit? (I also worry about what would happen if something would happen to my DH and nothing is in my name...)
I'm not sure what the answer to that would be. Let's work through some things first...
(1) You declared bankruptcy 7 years ago. Have you taken steps to get that removed from your credit report yet?
(2) Have you pulled your report and/or score recently?
(3) Where would the $5000 lump sum come from? If you have $5000 in cash, I can almost guarantee there's a better way out of the situation.
(4) Do the two of you have any other debts? Cars, mortgage, credit cards, loans, etc? We could help put together a payoff that would include those and your student loan so that all could be paid off as efficiently as possible.
(5) Do you live in a community property state?
I'm really not sure that putting utilities in your name would affect your score all that much. Someone else may correct me, but it seems that something like a car loan co-sign would be more effective. I don't know enough about your finances to tell you anything more at this point. We'd love to take a look at your budget if you're willing to have us do that.
Chrystal, bk.s stay on the credit for 10 years, but someone call file again after 7 years. Many ppl don't realize that. I've actually seen credit with 2 bankruptcies on it!
I doubt that you will be able to settle your student loan since it is federally protected
Utilities don't report to credit reporting agencies so it will have zero affect on your credit if you are added. The only time a utility will show on your credit is if it has gone to collections, then the collection agency reports it as a collection account.
I'm sorry I don't have more positive news for you, but I'd love to take a look at your budget and see if we can help you out.
Debts-Please list minimum payment, amt you usually pay, balance, interest rate. If you are past due or have special financing (0% interest), please indicate that as well.
~Car payment #1:
~Car payment #2:
~Credit card #1:
~Credit card #2:
~Credit card #3:
~Credit card #4:
~Credit card #5:
~Credit card #6:
~Other debt #1 ____________:
~Other debt #2 ____________:
~Other debt #3 ____________:
Goals: (examples: new car, baby, to be a SAHM, vacation, retirement, etc)
I want to save for:
We really enjoy number crunching. We've recently gotten a lot of help requests, so it make take us a week to get everything worked out for you, but it'll be well worth the wait if we can work out a better solution.
Here's a link that talks about community property. http://www.fairmark.com/spousal/comprop.htm Basically, community property states list everything as belonging to both spouses whether it actually does or not (especially for tax purposes). For example, dh and I closed on our house the monday before our wedding. Since we weren't married yet, they wouldn't let me sign for the loan. Since we're married now, if he dies, the house would automatically go to me even though my name isn't on the mortgage. I'm pretty sure the same would apply for pretty much everything... including bankruptcy. If you live in a community property state, there's a good chance your bankruptcy can affect his credit. I honestly have no idea on that one... you'd need to talk to a bankruptcy lawyer or pull each of your credit reports to find out.
You're entitled to 1 free credit report from each of the 3 bureaus every 3 years. That means that you can get all 3 right now and then wait 3 years to do it again, OR (the better way), you can pull one per year from alternating bureaus. For example, pull your Experian report this year, your Transunion one next year, your (dangit... I'm drawing a blank... what's the other one)... anyway, on the 4th year, you'd start over.
Equifax! That's the other one.
Here's where you get it. https://www.annualcreditreport.com/cra/index.jsp If you don't click the link, be SURE to type it in correctly. There are a lot of look-alike scam websites out there. FYI... the only reason you'd ever need to pull all three at once is if you suspect something like identity theft. All three reports should say basically the same thing.
Another minor detail that most people don't know... your credit REPORT is free. Your credit SCORE is not. Unless you're buying a house or something like that, there's really no reason to pay for your score. In your case, it's probably a good idea to go ahead and pay for it this year just because you have a bad credit history and are trying to straighten it out. It'll give you a baseline to work with.