Maybe thats not much for you but for some of us that can be overwhelming and the line between eating, buying prescription meds or keeping the heat on and paying the creditors is very thin for some. BK actually can improve your situation and your credit score and does’nt do as much damage as ‘claimed’. The ones doing all that claiming of how bad it is are the creditors themselves or the companies that work for them. I would rather ‘throw in the towel’ then continue to be beaten down by the debt.
Unless you’ve been there then you really cant say I have not met a person yet, in person or online, that has filed BK and regretted it. I’ve only met people and know many personally who have filed and all of them will tell you it was one of the best decisions they’ve ever made. I dont care if you are only 10,000 in debt or if you’re hundreds of thousands in debt. Debt is debt and what may be pocket change to you may be a fortune to someone else.
You cannot TELL them anything you must send it to them in writing. Telephone conversations DO NOT protect your rights. They can still call your work if you actually owe the debt in an attempt to find out information on how to locate you. They cannot disclose that they are trying to collect a debt or anything of that nature but they are within their rights to call and ask how they can reach you.
They can call your neighbors, they can call your relatives etc. It is then up to your neighbors and relatives to make it clear to them to not call. The only thing you can do is send them a letter saying you want them to cease calling you, your work, your friends and family etc. That does’nt mean they’ll abide by it because they actually have rights too. Whether they play by the rules or they abuse those rights is another story.
NEVER make a payment arrangement over the phone. Get it in writing by email, fax or US Mail. Telling them will not stop it you must send it in writing or by fax maybe- that I dont know I’ve never done it. I’ve only sent things by certified mail-yes it cost but they get it and I get proof that they got and there can be no dispute. Telephone conversations are a waste of time.. they are only the chance for the creditor to intimidate and threaten you. Do everything in writing always!
This is what you need to do. I was a bill collector. This is what you need to say and put it in writing. Cease and desist all calls contact me by mail only.
Once you put that in writing they can no longer call you or call you at work, which according to the fair debt collection pratices act, they are not allowed to call you at work and jeopardize your job at all and they can only call you from 8am to 8pm at night no later and only once per day weather they talk to you or not. They are not allowed to leave a message on answering machine as to why they are calling or tell anyone why they are calling.
The only way they find you is thru your social security number….which is known as skip tracing. They can call you at work for purposes of locating you and they can call you up until 9 p.m. You can go right here and read the entire Fair debt collection practices act – http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf
But once you send them a Drop Dead Letter and can prove they signed for it, they can no longer call anyone. If they do, they violated the law. I have used this method with some of the most annoying collection agencies.
The only one I did not use with was when I was an executor and collection agency kept calling me and my lawyer. Then one called me one day screaming that I was lying and the lawyer was not the estate’s lawyer. I got her boss on the phone and said that was correct, he is my lawyer assisting in the settling of the estate. I asked him to please have his people keep calling the lawyer. The lawyer is a personal friend of mine and every time they call him, he will get more money and they would get less. That is because in GA, there is a a list of who gets paid first and any lawyer assisting in the settling of an estate gets paid before any creditors. Strange, they quit calling him.
Oh, and they got 13 cents on the dollar and had to be happy to get it, since there was no other money.
I have about 50K in credit card debt which I stopped paying on about two months ago. My husband lost his job about three months ago and I only make enough to pay our basic living expenses. I am considering filing bankruptcy just in my name since most of the debt is in my name and trying to keep my husbands credit in good standing.
My questions is:
- How long do I have before the credit card companies pursue me legally? I am behind about two months right now.
- Should I talk to them and explain my problems to them or just avoid the calls. I have been avoiding them so far. They call my house twice a day but I have caller ID so I just don’t answer. They are calling my work now several times a day and I am having the people that answer the phone put them in my voice mail but it is starting to draw attention.
From my experience they have to go through several processes first before they take you to court to get a judgment . But talk to them first and tell them not to call your job and to send everything in writing. Now that doesn’t stop the process but it will stop them from calling your job! And if you file bankruptcy then all collections. And calls will cease.
It really depends on the card and the amount owed but as a general guideline around 6 months is when they start to look at legal action. But it really varies, some cards are known for suing sooner than that, some later.
I think I can also send a ‘Drop Dead’ letter via certified mail or any other method where I get proof someone signed for it. A good example is on Clark Howard’s website www.clarkhoward.com, just search drop dead letter.
This will stop all calls – period. If they violate it, they can be sued.
Then they become just a little bit more willing to discuss options. I do not recommend throwing in the towel so soon and so easily for what could be a temporary situation.
I think I can try to negotiate with a payment arrangement or forbearance (for a few months) or refinance my monthly payment.
If only for a $50K or so debt, I don’t think I need to file BK or throw the towel right away.
They may try a few months, then they will assign to a collection agency. If I tell them NOT to call you at work, they could not otherwise they will violate the law.
One time my friend tricked the collectors to leave a message to his co-workers, and the collectors mentioned about they are from a collection agency, then my friend filed a complaint as the collectors violated Federal Fair Debt Collection Acts by disclosing it was a collection.
Also, if the assignment to a collection agency gets no positive result, for another 6 months or so, the credit card company will be forced to charge off the card and sell my debt to an independent business company (collection company) that everyone could buy the debt 10 cents on a dollars (actual ration depends on the credit of the debtors and how likely the new collectors could collect the money.
Remember they need to sell the debt about every 2 years or so to keep the debt “fresh” .
Some collection agency (assignee , NOT charge off yet) would really be aggressive and sue the debtors. I had some friends got sued by MBNA or its assignee.
Even so, I could still easily answer the lawsuit in a page of standard form (downloaded from most court web site) and push the matter to 2 years more (every 3 months, for a case management conference etc)
What do you think?
Just wanted to introduce myself as a new member and try to reap knowledge from those of you out there in the same boat I am. I have one credit card with a large amount on it – lord knows why they gave that to me. I am also buying a home and car. I find myself not making ends meet everymonth to cover the little things that seem to come up. Any advice on what is the most important step to make would help. Also, what have you found most useful in your quest to be “debt free”.
I’ve used FlyLady’s system for my home. Now we desperately need help for our finances. It seems like every plan we try to get out of debt is a dead end. I’m not sure what to do next–if I knew what would work, I’d do it faithfully. Any suggestions you all have would be appreciated!
Good on buying a home.
The mistake that you have done is buy the home with a large credit card debt. Most people buy the home and look at the mortgage payments and say to themselves that they can or cannot afford. This is 100% wrong way to look at it. When you buy the home, you also buy all the problems. It will require, based on some estimates, another 40% more to the monthly mortgage payment just for maintenece. Do not overlook this.
So when looking at your mortgage payments you need to factor in maintenece, etc. That is your true monthly cost. But having a large credit card payment every month will take away from your speandable cash so you cannot do your maintence on the home. Eventually you have to get more credit cards to pay for that broken water heater, etc. Before you know it you are way over your head.
The first thing you should do is get rid of that credit card. Especially since the minimum payments are doubling after the first of the year. Then start paying down your mortgage as quickly as you can. If you have no money at all you can get some urgent cash from here – ElcLoans.com: no credit check payday loans. This website offers great repayment options and high acceptance rates. They also have useful article on fast credit improvement here.
My biggest step was realizing that I was responsible for the situation I was in. NOT ANYONE ELSE. Your comment about why the credit card company gave you the card sounds like me before I faced my problem. That is, not living within my means. My situation was compounded by a dibilitating illness, so I have to fight that to work at all. However, I am making progress. I watch the big things (interest rate, taxes, car payments, repairs, etc) and the little things, (leaving lights on, thermostat, gas prices, meal planning, trips to town, etc). It all adds up to having the money to pay off MY debt.
Start today to re-evaluate your lifestyle and spending habits. A $3 latte every day is $1095 a year…really. Do you need the newspaper and the internet both? Do you need digital cable TV? Should you sell your car and get a smaller, older, more fuel efficient and insurance efficient car? Are you paying PIP premiums on your home mortgage that could be removed?
Watch every penny. (Notice whose picture is on the $100 bill? He was no fool.)
Hope this helps. Good luck and God bless you.
Yesterday I was asked a question:
Where is the best place to get someone to get my finances striaghtened out. Many years ago I went throught consumer credit – hubby had own bank account and blew all his money without my knowing it. I got that stopped in a hurry. CC was able to get us through. Then when my husband retired, his company totally screwed up his retirement ( eventhough it was in writing and they admitted a mistake) so half went to the IRS and his annuity is only 1/2 what he was to get.
I also suffered a heart attack that very next year and we moved which used his 401k. Well, after a couple years we were in trouble again and I made the mistake of going with “Jubilee” to reduce my debt. Yeah right! $250 fee every month, they were to handle everything but I got the collection letters and calls and they never contacted the companies. That hurt us worse than beggin to compromise direct with the companies! I did take them to the Attorney General and got back some of our money. So we then went to Consumer Credit (website) again and got help. I think one place we went wrong is that as soon as we got ahead I paid them off instead of putting the money aside.
Well, after a foreclosure on a home, two moves it has come around again. Yes this is a “don’t you learn?” story. I have the job I have always wanted and making good money. However, we lost the majority of the downpayment I had for a house with a mortgage broker that dragged us around for months in which I spent for 2 inspections, rent, storage and rent for my hubby to keep working in another state.
We ended up with a lease to own home. Love it but I had told them we could do $1000 a month but when the it came to getting the key they raised it to 1300. Hubby just got a job – so much for retirement and what really hurts if we have 3 years in Income taxes to pay. Sorry so long – I am sure others have been there. What do I do? We are supposed to buy this in October and I don’t know how – everything is late because of pay periods.
I guess I’ll be the first to give the standard ‘you have to keep track of your spending’ spiel.
But that said, welcome to the list.
I am currently involved with a company that designs a financial program for the handheld PC running windows mobile.
I understand that not everyone has one of these, but my theory on this is I take it everywhere I go, and if I could use a program to tap in how much money I spend whenever I spend it, that would give me a good idea on how much money I go through a day.
The rules of the software are simple.
A nice interface where you can quickly tpa in how much money you spent, as you are spending it. For instance. Say you stop at the coffee shop. Tap in $1.55 (that is how much mine is) and away you go. After a couple of weeks where you know how much money you’ve spent, you can start to reign it in.
With the hassle you’ve had with companies that are supposed to assist you, I would sugest that you attempt it on your own for a bit. At least until you get an idea on where you stand.
Deb has some great spreadsheets on the debtsteps website to help you track all kinds of things, I would suggest that you download those and begin assessing your situation.
Also, if you are afraid of purchasing this home in October, then by all means don’t do it. Either continue to rent or look for a place more in your price range. You may go ahead and purchase it, and then you will slowly dig yourself a hole and be in the same situation all over again.
But the first thing you need to do is write out all your payments you need in a month, and compare it to your income. This will give you an idea where you should start.
I hope this is a little helpful.
Hope everyone is having a good summer.
I took out a small payday loan in December of 2008 ($260). I paid on it for awhile, then fell behind. I communicated with the lender, who set up a plan for me to pay $25 every two weeks without further interest being added. Then I began having difficulty reaching the lender. I emailed and called, but received no response over a period of a few months. I presumed the company had gone out of business.
Yesterday a collection agency called me. They had bought the debt. I called the original lender, and this time was able to get through. They confirmed that I had made payments totalling $325.
My question is … what “rights” does the collection agency have at this point? I am probably going to have to pay them something, but they are asking for $425. I was able to get the original lender to send me an email confirming that I’d paid $325 on this debt.
I know the collections company will probably play hard ball, threaten to sue, etc.
What are my rights at this time? What can I do to ensure I don’t have to pay this collections company a large amount of money?
Well, I guess the best response is all of us have been in your shoes at one point along the way. First the way I understand the credit repair companies, they can’t fix your problem, only you can fix it, and really the fact if you have good or bad credit is the least of your worries. I did the 5 day course by mevelopes, its free and you don’t have to buy the program. I also got the books, they helped to put it all it perspective, though a lot of the info you need is in the 5 day course and the downloads from this sight.
The first thing I did was find out what we had, assets, makes you feel a little better, then what we paid, in order of importance, utilities food gas for the cars are at top, clothes and going out to eat in the middle, credit card bills at the bottom, because I cut them up at didn’t need them anymore to live. I use to think as long as there was room on the credit card we were okay, that is so very wrong.
You will surprise yourself how much extra you spend when you are not keeping track. My husband jumped on board too, we have a basket on the dresser for all receipts and weekly I put them in to categories(on a piece of paper it doesn’t take much time after you set it up and no expense for a computer program/service) to know how much we have spent and how much we have left for the week, if there isn’t a receipt(ie candy from the vending machine) it goes on a little piece of paper in the basket.
I added up all the big boys (insurance, taxes, membership dues, medical deductibles) that we pay yearly in big chunks and divided that total by 12, every month that goes into savings until the month I need to pay them. No more surprises, and it surprised me how big that amount was. It is a commitment that is an everyday thing, you start to cut eventually, but you aren’t to that point yet, you have to figure out how much you spend first, and it is going to drive you crazy trying to figure it out, just write it all down and be truthful, it will hurt to, but you can fix it, the hard part was realizing you needed to do something to begin with. So good Luck.
Hope that helped.
My co worker has two pay day loans she is struggling with. She has offered to pay them 100 dollars monthly and they are refusing to work with her. They told her she would have to do arbitration to request a different payment arrangment. I feel really awful for her, her husband abandoned her with 2 kids, no education and she’s living on just above minimum wage.
I know the pay day loan was a bad choice, but I know she felt she had no where else to turn. She doesn’t want to default, but needs a workable payment arrangment. Does anyone know what this arbitration process is, and will it help her? What about consolidating the loands, they are with the same place ? Options ? Can anyone give some advice?
Arbitration is a much more workable solution than going to court, however in this case, the Arbitration officials or organization is selected by the lending company. I would suggest that your friend pay $100.00 on her account until it is paid off.
Send the payments by mail, certified, return receipt, along with a letter explaining her situation and proposing the new repayment plan. Hope this helps. The deck is stacked against anyone who is foolish enough to pay off their debts. File bankruptcy and your credit score will return faster with less cost and hassle than if you negotiate a deal. Sad but true.
I would never call say that paying off one’s debts is foolish, it is the right thing to do if one can. There are occasions where a lender forces a person into bankruptcy court because the lender (or collection agency) won’t work with the individual. I have settled several debts through negotiation and have paid off all my debts over the past 4 years and watched my credit score climb rather quickly. HOWEVER, I do not intend to use the credit score to ever borrow money again except maybe on another house once I sell my current one. But only when I know I have 6 months expenses in savings and have at least an additional 20% down.
One would be very wise to read Dave Ramsey’s books about money and put them into practice.