Please Advise ...

Discussion in 'Credit Talk' started by dragonfly, May 2, 2002.

  1. dragonfly

    dragonfly Member

    I have accumulated some $40,000 credit debts over the last 10 years. I have enrolled with credit consolidation program and pay some $1,000 a month. I have been switching jobs for better pay but you know the situation is tough while I have to get money to feed a family of five. Well, lately, I find that I can no longer pay that $1,000 a month for credit cards. So I notified this credit consolidation to cease. This way I can save $1,000 a month, which can buy a lot of food and cloth and pay for utilities and other useful stuffs for my family. My thinking now is that if any one of these creditors go to collect, I will negotiate for a lower balance and slowly pay them off (by months of course). If they don't contact me, forget it. I won't pay. I live in Texas, Homestead Exemption is unlimited, so even if they sue me, they cannot take away my house, my car, and they cannot attach to my wages. What do I lose ???

    Besides, someone told me that if I owe less than $5,000 the creditor won't even bother to sue me. And I have only 2 accounts that is over $5000. One is MBNA ($14,000) and another one is Discover Card ($10,000).

    Could any one give me some advice ? or better way to handle this situation ?
     
  2. Christi

    Christi Well-Known Member

    I live in Texas and you are 100% correct that they can NOT garnish wages or attach property in Texas..however they can file judgments on you. I'm not really sure what all that entails, but I've been told if you sell something of value and they have one they get their money first. I don't know that for sure. I would try as hard as you can to make the payments. Can you get a 2nd job, cheaper auto or anything? I just hate to see anyone have to start out cleaning up credit..it's a very long, frustrating and tedious process. I never knew how hard and how important it was/is to pay on time and will NEVER regardless what it takes get behind again unless I am completey incapacitated. I will work 3 jobs if need be to avoid going through what I've been through the past 18 months. Good luck :)
     
  3. dragonfly

    dragonfly Member

    can my creditors sue me and ask the Sheriff to arrest me for oweing debts ? and if the Court issue a "judgement" against me what procedures they usually do to force me to pay ? what if I really don't have any valuable things for them to snatch ? (I guess my house, car, furniture, clothing etc are out of their reach due to the "Exemption" correct ?)

    I am already driving a 6 years old car. I am already working 2 jobs. What else can I do ? I think defaulting on them is the only way out ?

    my credit is already damaged, and even if I pay on time, what does it do to repair my credit ?
     
  4. whyspers

    whyspers Well-Known Member

    Dragonfly...if they get a judgment (and MBNA and Discover likely will for those amounts), they will put a lien on your home and you will not be able to refinance, get a home equity or sell it without paying them off first. While they might not be able to garnish your wages, I'd bet they can still attach to your bank account (can't imagine them not being able to and just saw this happen to someone with an Amex debt) so you won't be able to keep your money in a bank (at least not in your name).

    I don't know what you make or what your situation is, but with $40K in credit card debt and a family of five, it might be time to start thinking about bk. I don't suggest that lightly, but that is an awful lot of revolving debt, and particularly if they have already reported your delinquencies to the credit bureaus. Something to think about very seriously. You can do a search here and read all about the ramifications, but sometimes you gotta do what you gotta do and some people here who bk'd within the past five years have much better scores than I've ever had.

    Any chance you have a bunch of equity in your home?


    L
     
  5. dragonfly

    dragonfly Member

    well, I said the total debt was $40,000 but that was at the beginning of the consolidation back in 1999. The current balance I guess is around $28,000. Do you think it is justified to bk for only $28,000. Many people told me it doesn't worth it.

    regarding attach to my bank account, is it true that they have to know my bank account number and which bank I bank with ? If they don't have that information, they cannot send notice around town telling every bank to freeze my accounts correct ? So I can always open a new bank account even after they attach to my old one right ?
     
  6. thomas

    thomas Well-Known Member

    I guaranty you that they know where your money is and the account number unless it is offshore. When I got my first call from a collection agency, he knew how much I had in my account to the penny. He also knew every debt I had. Knew more about my finances than I did.
     
  7. javan

    javan Well-Known Member

    All they need(and already have) is your name, SSN, address. With this info, they can attach anything you own. This will be true for new bank accounts as well.
     
  8. whyspers

    whyspers Well-Known Member

    If you'd paid it down that much, I would try to just keep on trucking. Maybe your wife would agree to work for six months to a year (if she isn't already working her patootie off) while the kids are in school? I dunno...just tossing out ideas.

    As far as them having to know where you bank...when they get a judgment, there are two different types of information subpeonas they can send out. One is to you and its called Examination of Judgment Debtor and they ask you for this information. You have to provide it. A different type is one that can be sent out to banks in your area asking them if you have any accounts, etc.

    Another alternative (and again...not condoning or saying its a good idea, but just tossing out ideas) would be to concentrate on paying off the large ones...but then again...that's not a sure thing because you might end up getting sued over a smaller one that you think would NEVER come after you.

    Its a tough situation...wish I could think of something helpful. Sorry.


    L
     
  9. thomas

    thomas Well-Known Member

    This is evil, but you asked for ideas.

    I agree that Discover and MBNA will probably sue. I don't know who the other creditors are, but if you tell us, maybe we can tell you if they are likely to sue. I helped a relative in a similar situation about 20 cards and $75,000 in defaulted debt. Only one sued - Sears.

    Here's the plan. Get cash advances on cards other than Discover and MBNA and use the money to pay down those two cards. It is very possible to get the balance down to a level where you could afford to pay your monthly payments on those two cards. Let the rest go into default.

    You say your credit is trashed anyway. This is just an idea. If I did this, I would make the payments on the other cards for at least a couple months before defaulting.
     
  10. dragonfly

    dragonfly Member

    these are my creditors, can you tell me how likely they will sue me ...

    MBNA - $14,000
    Discover Card - $10,000
    Providian - $2,800
    wells fargo - $500
    Third Fifth Bank - $500

    the above have been consolidated and have been closed since consolidation. So I guess it is impossible to reage or improve credit on these accoutns right ?

    Amex - $2,200 recently I quit paying; because this is a company card, and my company lay me off and did not reimburse me for the money, so where do I find the money to pay AMex ? Is this a basis of Dispute ???
     
  11. thomas

    thomas Well-Known Member

    I doubt that Providian and Wells Fargo will sue because of the small amounts. But, Wells Fargo will send it over to NCO for collection. They are nasty.

    I don't know what to tell you on the Amex. I think you are liable, but let the others tell you. Can you sue your employer for this?
     
  12. whyspers

    whyspers Well-Known Member

    MBNA - $14,000 - pretty sure bet
    Discover Card - $10,000 - pretty sure bet
    Providian - $2,800 - not likely although with their current problems...who can say for sure.
    wells fargo - $500 - highly unlikely
    Third Fifth Bank - $500 - highly unlikely

    Amex - $2,200 recently I quit paying; - also likely even for this small amount. Amex does NOT like to be left holding the bag from what I've seen.

    Could be wrong on all of the above, but I'd stake money if I were a betting person on the MBNA and the Discover (Discover will NEVER let it go...lol).


    L
     
  13. thomas

    thomas Well-Known Member

    Just a thought. When I had $63,000 in credit card debt, all with very high interest rates, my minimum monthly payment was about $1200. You say yours is $1000 with what is now about $28,000 in debt. I can't believe that you would have worse interest rates than I had. Your minimum payments should be more like $500 - $600 per month. If you default on all but MBNA and Discover, can you make the monthly payments on those two? If so, you would dodge a lawsuit (probably),
     
  14. dragonfly

    dragonfly Member

    so I guess the best way for me to get out of this mess is....


    1. do not pay for a few months ... until the creditors are desparate to offer a good deal to me

    2. my intention is to pay MBNA and Discover only since they likely to sue. I hope they offer 50%-60% of the current balance. monthly payment of course. I don't have lump sum to pay it off.

    3. default on the other small debts like Providian, Wells Fargo, .... etc

    4. Amex - drag on for another couple of months maybe, then negotiate with them for a payment deal .....

    Do you think I should use a debt consolidation service or just deal with the banks myself .... I have got the feeling that they do not really fight to get me a good deal ...
     
  15. radiohead

    radiohead Well-Known Member

    It seems to me people who file BK are better off credit report wise... some of them get scores 2 years post BK, that I have never had... I would consult a BK attorney. Even if you make deals with the creditors and get the stuff paid.. they will screw your report.. if you do make arrangements, you can fight to get them removed from your report later on... but this looks like long down the road..
     
  16. Kelly

    Kelly Well-Known Member

    I don't believe it's likely that you will be sued at all. It will be very difficult for a creditor to collect any money from you because you live in Texas.

    They can't garnish your wages. They can't go after your house. Why would they spend the money if they aren't likely to collect anything?
     
  17. GEORGE

    GEORGE Well-Known Member

    AMEX does NOT care if your business didn't pay...DO THEY HAVE A "CONTRACT" WITH YOU, OR YOUR BUSINESS???

    They aren't going to go after the business, unless they GUARANTEED payments...

    ...all they want is their money!!!
     
  18. Why Chat

    Why Chat Well-Known Member

    HELLO !! WAKE UP !!!
    If you first started making "arranged payments" in 1999, it means your first delinquency on these accounts was over 4 years ago, which puts you beyond the Texas 4 year SOL for being sued.
     
  19. dragonfly

    dragonfly Member

    I am lost ...please excuse my ignorance ... how does this SOL work ?

    I remember that some of these accounts (especially the MBNA) were closed and arrangement were made through a debt consolidation service in September 1999. I started to make monthly payments starting that month. Are you saying that after 4 years -- that is, starting September 2003, I can stop paying them and they cannot sue me or anything ?

    Please advise .... thanks.
     
  20. Rina

    Rina Well-Known Member

    It took 10 years to accumulate $40,000 of debt. 3 years after you see the light, you have only $28,000 left to go. Don't give up now.

    Some people (such as Mary Hunt), repaid over $100,000 without going into BK. If you can pay $500 plus any additional interest, you'll be done in less than 5 years (8 years total).

    Notwithstanding that the #1 reason for BK is a medical catastrophe, this scenario is one of the reasons why the credit industry lobbyists want to tighten up BK legislation.

    If you dig yourself into a hole, it's gonna take a while to get back out.
     

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