Alright, I am looking for some advice if anyone can help my wife and I out. Here are the details: Citibank 1: Statement Balance $10,874.63 Past Due Amount $2,150.96 Amount Over Credit Line $1,224.62 Number of Days Past Due 160 Citibank 2: Statement Balance $13,451.96 Past Due Amount $2,223.35 Amount Over Credit Line $1,041.96 Number of Days Past Due 152 Discover Card: Current Balance $11,453.52 Last Statement Balance $11,453.52 Amount Over Credit Line $1,543.00 Chase: Outstanding balance $7,166.94 Total credit limitâ? $6,200.00 Ok, Here are the particulars: My wife finished law school in 2006, we moved to Las Vegas and both of us were employed. During my wife's law school, living on one income we racked up a lot of CC debt. I left my job to take care of our new baby who needs special care in September 2007. We missed the due date on one Citicard payment last June 2007 by 3 days and they bumped both interest rates to 29.9%. The Discover card and the Chase card followed suit a month later. With only one income and crazy student loan payments, we decided that we could not afford to pay the cards. We looked at the credit counseling services but they were no help. We began to only pay $10.00 a month to all of the cards, so they would not try to sue us right now. Each company is calling about 5 times a day(not always leaving messages) but I have forwarded these calls to a Grandcentral.com number so they do not bother us. Anyway, it has been over 6 months and we are still paying the $10.00 a month on time every month, but I want to figure out a way out of this hole we are in. We sold our house when we moved and were looking for another house, but obviously with our scores tanking, we will not be able to get one now. Please offer any advise as to what we should do. Should we file bankruptcy (a problem because of the wifes position) Should we offer settlements? Should we keep doing what we are doing(they keep tacking on lates and over limits) With over $100k in student loans (700/month) and the CC's we will never get out of debt without some help. Help Please. Thanks, B
Just my .02 cents. Stop paying $10 a month. That won't stop them from suing, that is a myth, and I'm surprised your wife doesn't know better. I realize that BK is a problem for your wife, but Citi will pull the lawsuit trigger without hesitation. Unpaid judgments probably wouldn't be much better for her. If you can offer reasonable settlements, then by all means do so.
Can the student loans be put into forbearance? You usually get a couple years (I did at least). You may qualify for economic deferment as well.
Based upon posted information, I think you need to confer with a BK attorney. Your wife will also need to research the impact on her career and ability to practice. In short, you need to determine what is best for your family, both short and long term. Right now you need more information on consequences of filing BK, so speak to an expert attornet ASAP. Good Luck,
I know several attorneys that filed Chapter 13, and it did not appear to harm their careers. BTW they were BOTH NACA attorneys . That said, doesn't seem like they can get out of this hole at present. How much money do you have NOW to settle? Soon they will be doing CO's and this is when your negotiating can do a lot of good as then the JDB's will have bought it for pennies on a dollar. As for bankruptcy having had over 300K in CC debt,I didn't file for bankruptcy. I waited it out, had the stamina to do so and then when sued I went to court and because the JDB's had made so many violations, I won every case but one, which I then settled for a fraction of what they wanted. Bankruptcy was not an option for me, as for my credit well it sunk from hugh 700's down to 500 but now it is up to 630 and creeping upwards all the time as I have been diligent in watching my credit reports and keeping very good files on any debt I had. So to the poster, you have to decide if you can take the dunning notices,and if you are organized to keep a good paper trail to defend yourself when you do go to court, and you will as like someone said Citi will sue, but IME not for years and then you just may not lose anyway as they CA's make mucho mistakes. Good Luck Woofer
Thank you all Thank you all for your help so far. My wife works in a federal capacity and the bankruptcy would cause her to loose her government credit card(needed for all of the traveling) and her security clearance. She already consulted the in-house counsel on this matter. The $10.00 a month was actually his idea, because he had a similar situation happen to him, and that is what he did. Now I know a lot of you think how can a lawyer not know the credit laws, but my wife is in criminal law. Anyway, thanks for the great advice so far, we are going to consult with another lawyer regarding the bankruptcy stuff and see what happens. As for forbearance, we have applied to put the biggest gov't loan into forbearance, but even with the $700 extra a month, it will not help us dig out of the debt, but would give us some monies to pay the creditors. Once again thanks for all the help. B
Whether or not people here think it's foolish because it resets the statute of limitations and doesn't prevent being sued, it is a sure sign of good faith. There is a case to the extreme on this where an older lady paid for years every penny she could and it turned out to be several times what she'd originally owed. The creditor then sued her for more than the original debt. The court said enough is enough. You won't wait that long, but you can utilize your showing of good faith to try to find a resolution. The law is complex, lawyers specialize. She might have you reading contract law in your spare time to help figure out what the options are. You have four debts that you can't pay because you lack the income right now. But the amount in question is really only about $40K and you do have income. You might figure out the interest rates and late fees and overlimit fees and what you can pay and work out how you could pay things back if you had some kind of help from the creditors. The creditor and debtor relatinship is a two way street. I know that the JDB probably doesn't bother to see it that way, but the creditor certainly does, at least while you are paying on time. Does Citibank et al. really want to get nothing if you go BK? If you can explain how it is impossible for you to stop the "tsunami of debt" if the interest rates are unchanged and the late and over limit fees are still assessed, maybe you can convince someone to modify these things. For example, what happens to the math if each of those cards were at 5%, no overlimit, and you paid on time so there was no late fee? If you cut out every single thing you were spending money on that you don't have to, down to the cable TV and meals out, could you do it? If you can, then maybe you can start with either the biggest or the smallest creditor, I'm not sure which makes the most sense here, and call and get someone to explain the situation to, someone who can make a decision. If you can convince them that there's no money in forcing you into BK, if that's true, then why not do a deal?, they might do a deal. Who knows? I doubt that any of the credit card companies are all that keen on writing off another bad loan. But I would think it important to have all the numbers in front of you, the fact of good faith with the ten dollars a month, everything, so you can point out that the math only works if the fees and the very high interest rates are reduced to 5%. And if everyone gets on board this train, I'm thinking that missing even one payment on even one card would be a huge mistake.
question regarding lawsuits How long will the creditors (Citi, Chase, Discover) let you slide until they pull the lawsuit trigger? I am wondering because I never answer the phone calls as I forward them to VM automatically. Should I start answering the calls? I am going to take some of the advice here and act on it. I will be heading back to work in a few months and we will then have some more income with which to make amends to the creditors. I am going to try to contact them and reach an understanding of some sort as soon as I return to work and we have money to pay them. Do you guys suggest phone conversations(recorded by me) or do you prefer to send letters outlining the suggestions for payment etc. Thanks again. B
I think Citi will act first when it comes to bringing a suit. As you may have gathered from recent newsreports Citi is in financial trouble, and will resort to anything to get their books in order. Chase might take a little longer as they just bought out BearStearns, and are in the process of consolidating. Discover is a toss-up.
When I was deep in debt, I tried to work with all my original creditors. Discover gave me 0 percent interest for a year and after that reduced the interest to 9 percent and also took 1K off the amount owed. Citi pretended that they would work with me and whenI would send a payment the next day they would want more and more and the calls were never ending, so I said to myself @#$%^&*UIO and they got nothing and it took them about 4 years to sue and I ended up getting more becasue of violations than I had to give by 3K. Chase would not deal with me at all selling the account to a JDB who in turn would sell to another and another and now it is out of SOL. : ) Bank of America also did 0 interest and took off 1500 and did not bother me with phone calls. I also had a line of credit (25k)and for a year they did 0 interest and let me pay a very minimal sum like 100 bucks a month. Any OC that would work with me has been paid and in fact three like Discover and Sears and Bank of America I still have the account. The ones that didn't well they didn't get paid. When they went to charge off and a JDB bought them every suit that has gone to court except one I have won. : ) I now have settled my LAST debt, it has taken me almost 5 years but I am done with it and in good financial shape now. You have to decide what is the way to go for you. For me it was not bankruptcy, but I did have a lot of stress and many many many hours on the internet figuring out things and what my strategy was going to be. I would NEVER answer a phone from a JDB, however I would start answering the OC WHEN I have figured out what I can offer them as a payment plan. DO NOT OFFER SOMETHING or AGREE TO SOMETHING THAT YOU CANNOT DO. As for recording things it would depend what state you are in. I have found for me the best thing is to keep a journal with dates and times and send everything CRRR. Having a great paper trail with times dates phone numbers and peoples name and messages left is a very good thing and will help you a lot should you get sued. Woofer
