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GalMan · Jul 19, 2007, 11:09 AM

Hi All,

I am in severe financial crunch and would appreciate any pointers to get out of the situation. I have 4 credit cards - Citibank, Amex, Wells Fargo and Advanta with outstandings of approx $1500, $1000, $3000 and $500. I am current on all of these accounts as of now.

I used to run a very small business which is all but ruined now for some reason and I guess I would be defaulting soon on my payments.

Now my question is that:

1) Which of these companies is more likely to trouble me over collection calls, and how soon do I expect the calls to begin (i.e. days after due date)

2) What are the various workout plans I can possibly get them to offer me? Which of these is more likely to accept/make offer at this stage?

3) Will they actually sue me for such (relatively) small amounts?

Any help would be much appreciated.

RichardBondMan · Jul 19, 2007, 07:49 PM

1) They will all contact you and probably shortly after you miss the first pmt.
2) You need to call each and discuss. Each one will probably have different responses.
3) Yes, they will probably sue but will first make attempts to collect, after all their efforts are exhausted, they will sell the acct to a collection agency.

The total of all is about $6,000. You may want to try to salvage your business, find either a full or part time job to keep you accts currents and then make a plan to pay then off as fast as possible. If you were to pay $600 a month for 7 months, they would be done with, finished for good and you preserve your credit. Find a way to increase your income.

Clough · Jul 19, 2007, 08:26 PM

I am wondering what the very small business was that GalMan used to run.

I have been in a similar situation concerning credit cards. Calling the company that two of the cards were from was the best thing that I could do. They set up a payment plan that I can afford and the interest rate went from around 30% down to about 5%.

GalMan · Jul 20, 2007, 06:41 AM

Thanks Guys!

That was quite helpful...

If I may ask further, could you give me an Idea of some of the workout plans I can negotiate for - and to what extent can I get the companies to settle for a lesser amount..

Any related experiences with any of these banks would help too!

ScottGem · Jul 20, 2007, 07:22 AM

The first rule is to keep the creditors informed. Creditors get antsy when debtors start ducking them. If you approach the creditors NOW and explain your problems and ask what they can do to help you pay them back, you will probably find them cooperative and helpful.

Clough · Jul 20, 2007, 12:33 PM

I agree with the answer above.

I don't have any experience with the specific banks that you have. My negotiating experience was with Bank of America.

How I negotiated on my credit cards was like this: Two of my credit cards are from Bank of America. I called Bank of America and had a friend who is a CPA on the other line as a witness and to help in answering or asking about anything that I might forget during the conversation. Bank of America wanted to know all about my financial situation. It sounded like they had different plans depending on a person's situation. I am quite pleased with the plan that they gave to me. I think that it helps to have a witness on the other line who might have some knowledge about things concerning credit. I also told the credit card person that someone else was on the line.

I would like to assume that other companies have similar plans.

Concerning another credit card, I transferred some of the balance from it to another card that I have that has lower interest rate. That helped a lot.

I am still wondering what the business was that you had, because depending on what it was, I may have some ideas that might be helpful for you to get it being successful again, if you are interested. Thank you.

ScottGem · Jul 20, 2007, 05:03 PM

Originally Posted by Clough

Concerning another credit card, I transferred some of the balance from it to another card that I have that has lower interest rate. That helped a lot.

That's a possible idea. I get several offers for balance transfers with a low interest rate for the life of the transfer. You might consider using one of those offers if you get some, to consolidate your balances while your credit is still good.