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bruman39 · Apr 20, 2006, 08:10 PM

I fell behind on numerous credit cards and now I'm getting calls non stop from collection departments. The balances are escalating daily between overlimit charges and late fees. I was always on time, but have hit some hard times in terms of income and savings. My first priority is to pay the necessities such as child support, mortgage, utilities, food, and car. My paycheck is gone after that. Bankruptcy would appear to be a last resort because I am in the financial business. This could affect my job status and professional licenses. My home is mortgaged to the hilt and I have very little savings and no other assets. A big concern is whether my my bank account can be frozen or attached. What should I do?

Fr_Chuck · Apr 20, 2006, 08:33 PM

Well basically you should not have gotten used to living on paying min payments, and maxing out credit cards and living beyond your budget.

How much is your house payment or payments, sell it and move into a small apartment or a trailer. Get a second job.

Before any acconts can be frozen or attached, they will have to go to court and get a judgement. ( also garnish pay)

bruman39 · Apr 20, 2006, 08:47 PM

Thanks for your feedback. I agree that I put myself in this situation so I need to work my way out of it.

On the other hand, people do make mistakes. We're only human! I can't sell the house right now because I'm underwater on it. I'm not allowed to work at a second job according to my employment contract. Between child support and mortgage 2/3 of my pay is accounted for. Wages can't be garnished in Pa. MBNA has threatened arbitration. If they get a judgement do I quickly change banks to protect my paycheck deposit? Should I have my child support automatically deducted from my paycheck?

I sense your lack of empathy but I need help in dealing with this problem. Perhaps I need the advice of an attorney who specializes in this area?

Hypatia · Apr 20, 2006, 09:38 PM

I sense your lack of empathy but I need help in dealing with this problem. Perhaps I need the advice of an attorney who specializes in this area?

You might have thanked him for his honest help though he isnt an attorney. I think Chucks answer was a darn good one.

You did put yourself in this situation and to get out you will have to take drastic measures. Cut up your credit cards for one. Sell your house at a loss and get a house that is within your budget while you still are at the water line. Once you go under, which is knocking at your door, you will have a darn hard time getting another house at an intrest rate that isnt in the teens.
You can sell the house when you owe. If you can't get a second job because of a contract you might want to revise the contract and let your job know you either have to get another job, a raise, or you will have to get another job. Between child support and mortgage your gonna starve pretty soon. Cause I see your house going into forclosure and you loosing your house. I see you moving into a dumpy apartment because when your credit is ran at the great apartment complexes you will be denied. Good apartments have income charts to see who gets in. If you do not make x times the rent, you are turned down. Also with your risk with all your debt....not looking good daddy-o. So you will then go from loosing your house but to having to get an average, upper lower class apartment. Ohh all the chicks dig that.
To protect your paycheck deposit you might want to drop the bank all together. Why would a new bank be better in the long run that the one your with. Do you think it takes a major effort to get a judgement on one bank compared to another?
Getting your child support auto deducted is a smart move. At least you will not get behind on this bill that if gone unpaid will result in a warrant.

Call an attourney, try debt consolidation yourself from your bank. They might be able to help you out for a small monthly fee added to the balance of your debt. If you do not act now and do everything you can to fix your credit snufu you will fall below that line and trust me, it is very hard getting back over it.

Hypatia

bruman39 · Apr 21, 2006, 05:04 AM

Thanks for all of your valuable advice! It sounds like I'm totally screwed.

fredg · Apr 21, 2006, 05:13 AM

Hi, bruman,
You are not alone! I am not criticizing you, nor am I a lawyer or a Professional in this area.
CBS News has reported that the major issues with graduating college students nowadays is very, very high credit card debt... you are not alone. I only mention that because it's somewhat of a nationwide issue.
I would suggest talking with a Lawyer, and getting some professional advice.
My experiences with credit cards were somewhat bad, too; but not like your own situation. I opened a new account, with a new credit card company, turning over 3 other credit card debts to them, consolidating them into just one account. I eventually was able to pay it off. That was many years ago.
I do wish you the best, and you really do need some professional advice from a lawyer.

ScottGem · Apr 21, 2006, 05:40 AM

There are debt counseling services that will intercede with your creditors and work out an arrangement everyone can live with. I suggest contacting such an agency immediately. Most likely they will require you to adhere to a strict budget and tear up your cards. But that will get your creditors off your back.

fredg · Apr 21, 2006, 07:59 AM

HI,
Before you seek out any specific debt counseling service, I highly recommend you look at this site; and call the toll free number, ask if they are a member of the National Foundation of Credit Counseling.
http://www.debtadvice.org/

With the very high debt of some Americans, more so than in previous years, credit counselors have "popped-up" all over the United States; some not so reputable. There are also quidelines offered at the site, for choosing a debt counselor.

bruman39 · Apr 21, 2006, 11:34 AM

Thanks guys! I appreciate the more upbeat attitude towards the situation. I'm sure there are hundreds of thousands of people right now in over their heads with credit card debt. It certainly helps when I hear some constructive approaches to dealing with the problem.

Any more advice on how to deal with the collection process would be greatly appreciated.

rlevanm · May 22, 2006, 02:24 PM

I think I am in similar situation and I understand your worries. I own 20+K to MBNA plus similar amounts with other credit lines. Since I have a fixed income, I systematically run out of money every month just by paying for the fixed expenses (child support, car, housing, etc.) well before I could service my debts. So I adhered to one of their program that allows me to consolidate all my credit cards debts into one with a lower rate (14% instead of 24-28%) and a fixed monthly payment, spread out up to 4 years.

This is band-aid solution but it is better than nothing. And since I have negative asset, I failed to consolidate my debts through the banks and get a lower rate. But I will retry this solution pretty soon.

Of course this is a very precarious situation and a job lost means automatic BK for me. If you could think of a better way out, I am interested to know.

bruman39 · May 22, 2006, 07:26 PM

The credit card companies have you in a vice grip once you fall behind on monthly payments. Just remember that even though they are true bloodsuckers, you can't get blood from a stone. If you don't own any assets, you're judgement proof. They can sue you till the cows come home and never get a dime.

CaptainForest · May 22, 2006, 09:18 PM

Originally Posted by bruman39

The credit card companies have you in a vice grip once you fall behind on monthly payments. Just remember that even though they are true bloodsuckers, you can't get blood from a stone. If you don't own any assets, you're judgement proof. They can sue you till the cows come home and never get a dime.

Except that judgement's are outstanding in a lot of places for 20 years and within 20 years from now, you might re-accumulate assets.

bruman39 · May 23, 2006, 12:38 PM

There are many ways to avoid paying judgements. Just ask OJ! In my state they have to be renewed every 5 years. Do you think the bloodsuckers are going to incur that cost? Wages can't be garnished in my state except by the IRS, for child support arrearages, or student loans in default.

The bankruptcy laws may have changed to help the loanshark credit card companies, but they still have very little leverage when it comes to collecting unsecured debt. Ironically, Delaware is the state where most credit card companies are incorporated and is also one of the few states where bank accounts can not be levied!