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virginia68 · Jan 28, 2009, 02:03 PM

Hello, I disperately need some help about my credit card debt. I owed about 50K on 5 diiferent CC. I lost my job and we are just now leaving on my husband's unemployment check for $150.26/week and we have one daughter 2 1/2 yrs. Old. I have been past due for about 22 days now and been receiving phone calls from 2 CC so far. My mother is welling to help me out paying my bills but she doesn't have enough to pay for the entire amount I owed. I was thinking about going to a debt consolidation program but they charge 15% and I heard stories that they are not really reliable. One of my debtors is Discover and they told me they don't settled is that true? My mother can only pay off 50% of my debt and CHASE will only do 85%. Should I do nothing since I can't possible afford of what the are willing to settled? I appreciate anybody's help and suggestions.

progunr · Jan 28, 2009, 02:39 PM

Most of the card companies will not settle.

They will in most cases sell your debt to a third party collector, who may settle, or may take legal action to attempt to collect the debt.

You may need to look at bankruptcy if you don't have the ability to pay the debts. If sold to a third party, you could possibly settle for around 40 to 60%, maybe even less.

JudyKayTee · Jan 28, 2009, 02:39 PM

Originally Posted by virginia68

Hello, I disperately need some help about my credit card debt. I owed about 50K on 5 diiferent CC. I lost my job and we are just now leaving on my husband's unemployment check for $150.26/week and we have one daughter 2 1/2 yrs. old. I have been past due for about 22 days now and been receiving phone calls from 2 CC so far. My mother is welling to help me out paying my bills but she doesn't have enough to pay for the entire amount I owed. I was thinking about going to a debt consolidation program but they charge 15% and I heard stories that they are not really reliable. One of my debtors is Discover and they told me they don't settled is that true? My mother can only pay off 50% of my debt and CHASE will only do 85%. Should I do nothing since I can't possible afford of what the are willing to settled? I appreciate anybody's help and suggestions.

This was recently posted in the legal thread - woman had a number of credit cards, went to a consolidation agency. Some are better than others, by the way. One of the credit card companies refused to negotiate and so the consolidation/counselling agency could not help her.

Even with debt consolidation on an income of $150.26 could you afford to make any payments?

jondbh · Jan 28, 2009, 03:33 PM

Chapter 7 bankruptcy may be your answer. If you have no secured debts and no assets it may be the best answer. You cannot file back taxes on a 7 but credit card debt, medical debt, signature loans can be wiped out and stop garnisments. It is best to file prior to the companies getting a judgment against you. If you have a vehicle that you are paying for you can sign what they call a reaffirmation agreement and continue to make payments. This hold true on your mortgage also. A chapter 13 can reduce your payments on your vehicle and allow you to keep it. The amount you pay on your vehicle would be what it is actually worth not what you owe on it and the rate of interest that most bk courts are accepting is 7 % unless your contract rate is less than that. The court allows you 3 to 5 years to pay off your chapter 13. In a 7 you can surrender your collateral and the debt will be discharged and you owe nothing. Also in a 13 back taxes can be paid over the 3 to 6 years and this usually stops the interest you are being charged. In a 13 unsecured debt such as a credit card the company usually gets pennies on the dollar and sometimes they get nothing depenind on the chapter 13 plan that is approved by the court. If you file be sure to get your bank account down to 25.dollars or just enough to pay your expenses. Have nothing in savings. The court can seize this to pay your creditors. You will have to submit 2 years tax returns in a 7 and 3 year in a 13. File your taxes and get your refund for that year prior to filing your bk. Hope this helps.

jondbh · Jan 28, 2009, 03:34 PM

I apologize it should say 3 to 5 years on a chapter 13. Hit the wrong button.

JudyKayTee · Jan 28, 2009, 03:37 PM

Originally Posted by jondbh

chapter 7 bankruptcy may be your answer. If you have no secured debts and no assets it may be the best answer. You cannot file back taxes on a 7 but credit card debt, medical debt, signature loans can be wiped out and stop garnisments. It is best to file prior to the companies getting a judgment against you. If you have a vehicle that you are paying for you can sign what they call a reaffirmation agreement and continue to make payments. this hold true on your mortgage also. A chapter 13 can reduce your payments on your vehicle and allow you to keep it. the amount you pay on your vehicle would be what it is actually worth not what you owe on it and the rate of interest that most bk courts are accepting is 7 % unless your contract rate is less than that. The court allows you 3 to 5 years to pay off your chapter 13. In a 7 you can surrender your collateral and the debt will be discharged and you owe nothing. also in a 13 back taxes can be paid over the 3 to 6 years and this usually stops the interest you are being charged. in a 13 unsecured debt such as a credit card the company usually gets pennies on the dollar and sometimes they get nothing depenind on the chapter 13 plan that is approved by the court. If you file be sure to get your bank account down to 25.dollars or just enough to pay your expenses. Have nothing in savings. The court can seize this to pay your creditors. You will have to submit 2 years tax returns in a 7 and 3 year in a 13. file your taxes and get your refund for that year prior to filing your bk. Hope this helps.

If you are thinking about Bankruptcy you MUST consult with an Attorney. In some States your residence is protected. In other States, it is not. If it is not going to be possible to pay off your debts you should not file Chapter 13 because it will cost you more money in the long run than a Chapter 7 (or straight) bankruptcy.

I see no advantage to filing before Judgments are entered other than the small saving in legal fees. The interest would be the same and Bankruptcy takes some time.

The credit report is going to look no better and no worse if it's Judgment and Bankruptcy vs Bankruptcy.

jondbh · Jan 28, 2009, 03:52 PM

The only problem with having a judgment against you is that is attaches to your property and most probably you have to file a Motion to Avoid a Judicial Lien to get it lifted. As far as the credit report goes yes it will be a bad spot on your report and yes you do need to consult an attorney prior to filing a bankruptcy but there is no law that says you can't file in proper person and represent yourself. It is not a good idea but I have seen it done. The new bankruptcy laws are to complicated for someone who has no training to try and take on. As far a Bk taking to long on average a chapter 7 probably takes 6 months from start to finish. A chapter 13 will allow you to keep most of your property and can get your monthly payments down, except on a mortgage. It will allow you to pay any arrearages out over 3 to five years instead of having to come up with it all at once and to avoid legal fees being added to your mortgage it is best to file prior to a foreclosure being started. Yes it will cost you legal fees, but in some states you can go to Legal Aide and file a Chapter 7 and all you have to pay is filing fees and it is possible to petition the court to waive the filing fee in some cases or they will allow you to pay them out over a period of a few months.

JudyKayTee · Jan 28, 2009, 03:55 PM

Originally Posted by jondbh

The only problem with having a judgment against you is that is attaches to your property and most probably you have to file a Motion to Avoid a Judicial Lien to get it lifted. As far as the credit report goes yes it will be a bad spot on your report and yes you do need to consult an attorney prior to filing a bankruptcy but there is no law that says you can't file in proper person and represent yourself. It is not a good idea but I have seen it done. The new bankruptcy laws are to complicated for someone who has no training to try and take on. As far a Bk taking to long on average a chapter 7 probably takes 6 months from start to finish. A chapter 13 will allow you to keep most of your property and can get your monthly payments down, except on a mortgage. It will allow you to pay any arrearages out over 3 to five years instead of having to come up with it all at once and to avoid legal fees being added to your mortgage it is best to file prior to a foreclosure being started. Yes it will cost you legal fees, but in some states you can go to Legal Aide and file a Chapter 7 and all you have to pay is filing fees and it is possible to petition the court to waive the filing fee in some cases or they will allow you to pay them out over a period of a few months.

We could go back and forth on this forever. My advice? Contact an Attorney and be sure you are making a wise choice which is most beneficial to you in the long run.

Don't guess about facts, circumstances and policies.

virginia68 · Jan 28, 2009, 05:48 PM

Thank you everyone for your advised, but I don't think I would consider filling for bankruptcy as of now. My mother is willing to lend me some fund, but just not quite enough to pay it off it's only about 50% of the 50K that I owed that's everything she's got. Do you think it would be an option for me to just wait and do nothing until they'll take it to a debt collectors agency or consult a debt settlement company? Thanks

JudyKayTee · Jan 28, 2009, 08:22 PM

Originally Posted by virginia68

Thank you everyone for your advised, but I don't think I would consider filling for bankruptcy as of now. My mother is willing to lend me some fund, but just not quite enough to pay it off it's only about 50% of the 50K that I owed that's everything she's got. Do you think it would be an option for me to just wait and do nothing until they'll take it to a debt collectors agency or go ahead and consult a debt settlement company? Thanks

I didn't get the impression that you were considering Bankruptcy. You can always deal directly with the various creditors. They have more flexibility than the collection agency because it's owed to them. The collection agency would have to check back with them, anyway. Do NOT indicate how much you are able to pay. DO offer them, say, 40%. Tell them you are borrowing the money from a relative who has said that's the limit, that's the ceiling.

ASK if they will take 40% CASH NOW. It might - in this economy - be worth their while. Stay firm. It sounds like that's the best you can do so you have to convince them of that. Sure, they can spend the time and money getting Judgments, collect a few dollars here and there over the next few years, maybe renew the Judgment - OR they can take 40% cash NOW.

Sounds good to me! Just be straight forward and strong. That's the best you can do. Be inflexible. I wouldn't play "let's make a deal" and offer 30% and then bargain to 40%. It makes the creditor think you have flexibility which you don't have - although other people have said it worked for them.

If they agree, get the agreement IN WRITING, before you pay one cent. Make sure it is legal and binding, worded appropriately. If you can't consult with an Attorney, wipe the names and post it here or, better yet, on the legal boards under "other law," make reference to it here.

I'm one of those say it once, say the truth, this is it people, anyway. So this is how I would handle it.

Just remember - this is the best you can do, no room to negotiate.

If 40% is NOT the best you can do, then offer more but I don't think I would. If you could do 50%, well, offer that. Or 45%. But offer ONCE and that's it. If they say no, then you ask them to think about it. Give them a few days - you may very well hear back from them even if they say no the first time around. You can always say that you don't want to file in Bankruptcy, but it's been suggested to you. And obviously it has.

Be tough. (And hug your mother.) You've got tons of stuff going on so be sure to be kind to yourself or you'll forget things always get better.

virginia68 · Jan 29, 2009, 12:38 PM

Thank you,thank you so much, judy kay tee

virginia68 · Jan 29, 2009, 01:34 PM

This is the best answer/help from you Judy Kay Tee and I really appreciate it and I thank you kindly. You are so right, the 2 CC company has been calling and they seem to keep dropping the percentage of what they want to settle. I'm not what you call a tough person, I normally just give in, but under circumstances like this I guess I'll have to. One more question if I may, I have a little money in my checking account, not much, under the same creditors bank. My question is, can this bank attach it. Thank you.

virginia68 · Jan 29, 2009, 07:11 PM

Judy Kay Tee, thank you so much for your help I really appreciate it very much. You seem to understand of what I'm going through, It can't be this bad forever, we will find a job but when I don't know because of the hard economy. I'm just glad that I have a wonderful Mother that is willing to help me out. I do have another question if I may. I have a little money on my checking account, not much really, but I'm banking it at one of my creditors, is it possible that they would attach it

virginia68 · Jan 29, 2009, 07:12 PM

Judy Kay Tee, thank you so much for your help I really appreciate it very much. You seem to understand of what I'm going through, It can't be this bad forever, we will find a job but when I don't know because of the hard economy. I'm just glad that I have a wonderful Mother that is willing to help me out. I do have another question if I may. I have a little money on my checking account, not much really, but I'm banking it at one of my creditors, is it possible that they would attach it

JudyKayTee · Jan 29, 2009, 07:54 PM

Originally Posted by virginia68

Judy Kay Tee, thank you so much for your help I really appreciate it very much. You seem to understand of what I'm going through, It can't be this bad forever, we will find a job but when I don't know because of the hard economy. I'm just glad that I have a wonderful Mother that is willing to help me out. I do have another question if I may. I have a little money on my checking account, not much really, but I'm banking it at one of my creditors, is it possible that they would attach it

Yes, they can take any money in the same Bank. Move it, definitely. A lot depends on your credit card agreement but personally, I wouldn't take the chance.

You need to hold onto every bit of money that you have at this point so, yes, move it. It's not fraud because you're not hiding from your creditors. You are prepared to negotiate with them.

Everybody has rough times, everybody.

(And, again, hugs to your Mom.)

virginia68 · Jan 30, 2009, 12:04 PM

Thank you again, I will definitely do as you suggested. I give my Mom a hug and thank her, she told me that's what a family are here for to help each other out on hard times like this, and she said to tell you THANK YOU for giving me such a great advise.

JudyKayTee · Jan 30, 2009, 12:13 PM

Originally Posted by virginia68

Thank you again, I will definitely do as you suggested. I give my Mom a hug and thank her, she told me that's what a family are here for to help each other out on hard times like this, and she said to tell you THANK YOU for giving me such a great advise.

See if she's interested in adopting me - :)

I wish you luck. Come back and let us know how this works out for you - including your great new job when you get it.

virginia68 · Feb 3, 2009, 02:36 PM

I sure will, and thank you so much...