I have never been very credit savvy - while in college I fell into the credit trap by getting several cards. Everything worked out well at first, I would charge something and pay off the balance, then charge something else. And then... I became poor. And my financial judgement became even more poor. I started putting groceries and bills on my cards, ordered clothes and things I couldn't afford because I was depressed - basically the whole head-in-the-sand routine. And pretty soon my cards were maxed out and delinquent, since I had no way of paying the minimum (or anything, really) each month.

Fast-forward 6 or so years: The knowledge of my bad debt has been eating at my conscience all this time, but I have had no way to even begin dealing with it until now. So when I received a letter from Midland about my "worst" card debt (less than $2000, but still huge for me) with an offer to settle and rebuilding my credit by transferring my balance to an Embrace Visa card, I thought it sounded like a pretty good deal, I figured I'd pay off my debt over the next year and then close the account. I read everything carefully and thought it over, and then I decided to go for it.

I can't believe I was so stupid!!! Not once did I think of researching this offer on the internet, even though I always google EVERYTHING that comes my way. I think my guilt over having debt in collections had finally chewed up so much of my brain that I suddenly experienced some sort of black-out, and managed to do something really stupid before I regained my senses. I thought I was doing a good thing! The warning signal of course started to go off in my head when the phone calls began - from various numbers linked to Jefferson Capital, pretty much at the same times every day (except weekends, amazingly...) And then I began looking into things and started to learn about SOLs, dispute letter options, scum collectors, etc., etc.

My question is: What are my options now, if any? Is there any way I can get out of this, even though I have sent them my signature and my first payment? I don't mind paying, even though it feels wrong paying the junk buyers, but I am concerned about whether my not-so-good-but-not-abysmal* credit is royally f***ed now. Is there any kind of damage control I can/should be doing at this point?

Any advice anyone has to offer will be extremely appreciated. Thanks so much for reading through my long post!



(* I have been able to get by with paying higher security deposits on apartments, getting a cell phone account by accepting a limited spending balance for a trial period, etc.)

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Well, it just so happens that I made the same mistake with Embrace Visa....

The debt was already past the statute of limitations in my state but I got suckered into one of their offers also and now I have been sending my 42$ a month to pay it off....

However, I have recently checked all 3 of my credit reports and there is nothing being reported by embrace visa or jefferson financial on any of them....I haven't even noticed any inquiries on any of them from either place...

So I think that you will be ok, but just remember, if you choose to quit paying then it will for sure show up on your reports. So since you already sent the 1st payment you will be better off to finish paying on it and then once it is all paid cancel it, which is what I plan on doing.

At least we won't make this same mistake again....

If you need to contact me, you can just message me here at creditboards...

Cheers,

LM

I would add an additional suggestion - keep copies of EVERYTHING from the original contract on down in case there is any legal action in the future. If they step one toe out of line you may have a chance to take action but it will take time and diligence. Hopefully you won't need any aces in the hole but it's always good to keep it, just in case.

Same thing happened to my DH before I found these boards.

Same exact thing and he chose to accept the card.

Here is the good: He now has an Embrace tradeline that is reporting a 100% positive payment history at a time and with a credit score in which he really can't get approved for anything. He paid it all off and has a credit line on the card, albeit a small one.

Here is the bad: Jefferson Capital put a charge off on his credit reports after he accepted the card. I'm not sure if it was right after he accepted it or after he paid it all off but they put in on there. A negative tradeline. MY DH was royally P'd off when he saw it and felt that he had been taken for a ride with them because he assumed it would show as a positive on his credit report but with the new negative tradeline his score took another hit.

The good news is that Jefferson Capitals date to fall of the credit reports was pretty close to that of the original creditor and he (like you) accepted the card when the debt was about 6 years old. I have been able to successfully dispute them off of all 3 reports. I was going to nutcase them but I decided to try one more dispute and it came off (tried 2 disputes with each of the CRAs and it came off of one on the first try and the other two on the second try).

So now, it is a good thing, there is no charge off reporting and he has a positive tradeline showing that he otherwise wouldn't have had.

You unfortunately reset the SOL on the debt. I know you have a moral obligation to pay your debts, but after 2-3 payments, Midland probably just made all their money back AND Jefferson just made money off the interest.

It's a credit card, correct? Cancel it.

I can't tell you what do to, but I can tell you what I would do.

Dispute original Midland TL as obsolete.

Stop paying on the Embrace cc. Google as much as you can about this card. The percentages are are 19.75% and 25.75% as you become late, default, etc. Even a secured card will give you lower rates.

At the risk of sounding oppositional, why are you paying this? It's still a debt, just in the form of a credit card. Isn't that what got you in this position in the first place.

I'm trying to get you to see the other side, not to rip you up. I know you were working with the best knowledge you had at the time - we all have been there, hence we are HERE at CB. Try to see what is in the fine print.

Quite possibly, if you don't want to just stop paying, you can continue to pay while you work on credit repair... start by getting a regular cc and do a BT (depending upon the fee and rate - be careful).

I really hope this works out for you. If you find no alternative, just remember not to get in the same predicament again.

Been there, done that, working my way out of it now!

~Daizzy

Well, there are a couple of things to look at.... Is the debt being reported on your credit report. How old is it? etc..... If it's a valid less than 7 year debt and being reported then it's up to you if you want to take care of it. Usually these credit cards are a great way to reestablish your credit but of course there might be an annual fee and high interest. Or you could just settle the debt with them. I accepted an offer similar to this years ago from Capital one because they had bought an old best Buy debt. The original limit on the Best Buy account was 500.00 but the debt ended up being 720.00 or so by this time. They charged the 720.00 on the new capital one card and that was the limit. As soon as i paid it down then I had available credit.

The decision is yours and can you afford to pay the credit card down?

Ask Pyran or Why Chat, but I believe you reset the SOL by bringing the debt current. It also makes validating the debt a bit more easy since you have been making payments and those records are readily available. It's difficult to claim a debt isn't yours when you made payments on it last month. Good luck.

My experience:

I fell into the same situation a few years back...when I didn't know about CB. The 'do the right thing' side of me wanted to pay off all my COs which included a providian CO from my past. So when this stupid letter for an Aspire Visa came in the mail offering a chance to clear up this old debt, I went for it --- not realizing it was already way past SOL and it not having anything to do with the OC.

Once I accepted the offer, they immediately dinged all 3 CRs with a new charge-off/collection entry...this on top of the original Providian one that had been sittign on my CRs. Jefferson Capital posted that I was delinquent EVERY month until the account balance was paid off...even though through their own physical monthly 'Aspire Visa' statements indicated that I was never late with a payment. I argued with these jerks numerous times and tried disputing many times to no avail.

It took 7-8 months to pay-off the entire balance and I was never once late. The jackasses over at Jefferson Captial would call me every month exactly 2 weeks before the statement due date to ask if I had sent in a payment yet, and if not, would insist that I make one over the phone (which also included an over the phone fee). I told them to go to hell every month...they knew I paid on time ever month, but still they called like a bunch of little jerks. Every month I went through that crap...I even dared one of the "csr's" to come look me up personally to collect on a non-late' payment.

As for the 2 CO entries on each of my reports, I was able to dispute off the OC's - Providian...Jeff.Capital wouldn;t budge, no matter how many times I disputed. It eventually fell off naturally.

After I paid in full, they automatically sent me an Aspire Visa card. I explicitly told them that I wanted nothing to do with them or this card, but they sent one anyway. I have NEVER activated this card...I shredded it the day it came in the mail. To this day (3 years) , they're still reporting a positive open trade line for this card that was never activated nor used. They even gave it a CLI sometime ago. It's truly sad.

***With this I have a question for the experienced CB'ers... Should I initiate contact with these idiots to tell them they are reporting a trade line that does not exist? or should I dispute it off all 3 CRA's? or just leave it alone?

To the original OP, I am sorry you ended up in the same trap. Good Luck to you.

Honestly I cant speak for anyone but myself. I received in the mail a letter for Embrace Visa stating if i paid off a sears debt will I really get a card. I also researched and got a little bit of responses good and bad. I tried it and it has been the greatest. I owed Sears 572 from 2000 i agreed to pay of debt they pd 272 of it and i pd 300 my starting credit limit was 223.00 I had to make pymts until below limit but had 0%apr for the actual debt I paid the balance off in 2 months. I have had the card for 3 years now they removed Sears from all 3 credit bureaus and reported my credit since day one I had 2 increases with good pymts now i am at 723.00. i have less that 50.00 on my card and plan to keep it that way when i call they dont keep me on hold long and they are increasing my limit. I would recommend contacting original creditor first to make sure its legit. Otherwise for me it was great.

Arizona

I would log into the embrace card site and check your credit availability... I have been very faithful paying to them, but they just emailed me today and said they are closing all accounts..

I still owe like $764 on it and from what I have been reading online Embrace Visa may be a scam and the company that runs embrace as been filed against by the FTC