I posted here before about cc debt accrued from business (personally responsible) and a recent collection from Am Exp. I mentioned my husband has been totally against bankruptcy (would be in my name, and I qualify for Chpt. 7). In looking at all of my options (CCCS, bankruptcy), I have decided to try to take the tact the Woofer did and would like some advise. I am sure there are others who will think that I absolutely should declare bankruptcy, but, I really want to try everything to avoid this, do credit repair down the road, and build my business credit file so I have that and husbandâ??s good credit going forward. If I could pay this debt (as I have been struggling to do the past year), I absolutely would. Situation: Monthly income is $5000-$6000 (this is going up as business grows, but is hard to make predictions at this point. Husband debt â?? 2 cc totaling $12,000 ( 1 card 10.99 other is 28.99 and plan to move that to a lower rate card) â?? all current, no late payments Joint â?? 1 cc- $9000, 9.99 apr, 12 year old card from CU weâ??d like to keep as they have never raised the rate and treat us well. Me â?? 16 CC- total - $60,000. Want to keep: (1) Chase - $3800, apr 10.99 to use for business operations,(2) other small cards with less than $2000 and low apr- donâ??t use them and am paying down. All are current. * Given that I have 4 other Chase cards that I may default on, keeping the Chase card above may not be possible anyway and will most likely be closed by them. Remaining: 13 cards â??ALL APR at 28.99, 4 that have been closed by creditor. All were current up until this month (Oct.). One acct that was sent to collection by AMEXP after being 2 weeks late but up to date that I have just sent a validation letter to. Bottom line, given the above, I am able to make at least the $900 monthly minimum on the cards I am keeping as well as husbands. Mortgage, car lease (up in July), insurance, utilities, food, and put some back into business for advertising purposes. At this time, while looking for employment, trying to build business, cutting back on everything, I canâ??t pay the other cc, or, I can pay them very little, maybe $25 each. Here is my plan of action: (1) Contact all the CC accts and ask for hardship program, reduction in interest, reduction in balance., etc. (2) Work with the cc that offer to work with me. (3) Do not pay ones that donâ??t. (4) What is the next step? Hereâ??s where I am stuck. Questions: (1) Is it better to pay everyone something: say even $25? (2) What can I expect to happen if say, I stop making any payments to 10 creditors? (3) Should I be prepared to go to court for the accts I canâ??t pay? When would this happen? What should I track? Right now I let the phone go to voicemail, donâ??t have an employer for them to harass, and have a different last name than my husband and most relatives. (4) In general, what can I expect when I stop paying? I appreciate all the help. I realize that with this approach I am choosing a scary, bumpy road, but I feel I am up to it. This board is a godsend right nowâ?¦
Keep up your husbands credit some cc won't more than $25 tried that myself they sent the payment back.If you go the bumpy road it's going to be long but it's doable.Expect a lot of phone calls a lot of letters in todays market their quicker to sue.Any way good luck you have to do what's best for you.
YOu can expect phone calls sometimes once a day from the OC, and you can ignore them and then it will most likely go to a CA and or a JDB. Now this is where you want to keep ALL record and make yourself a journal and if you are in a two party state RECORD everything. Do not speak to them but do not ignore either. Send off DV's and keep copies for yourself and everything is sent CRRR. The OC may hold the account or sell it and the CA and or JDB will call and try to harass, and this is where you have to decide if you can handle such. I would get a caller ID and also BLOCKED phone numbers and deal with it that way. You may not get sued for 3 months to 6 months, to a few years or maybe not at all. What state are you in, so we can know what the SOL is. Again if you can work with the OC's go for it. I would NOT ever deal with a JDB untilI has no choice. Fortunately for me they screwed up so much that I always prevailed. (3) Should I be prepared to go to court for the accts I canâ??t pay? When would this happen? What should I track? Right now I let the phone go to voicemail, donâ??t have an employer for them to harass, and have a different last name than my husband and most relatives. (4) In general, what can I expect when I stop paying? [/quote] See above I appreciate all the help. I realize that with this approach I am choosing a scary, bumpy road, but I feel I am up to it. This board is a godsend right nowâ?¦[/QUOTE] [/quote] You are going to have to be prepared for people calling and maybe even someone coming to your door,at home or embarrass you at your place of business, and if you can deal with this stress then this may be the road for you. I will tell you that it got a lot easier after the first time : ) You do have a lot of debt though, so you are also going to have to rethink your spending and tone down. My debt was not because I bought a lot but I needed to use the credit to keep going in a tourist industry after 911. I owed a lot more than you, but I got out of my hole becasue I never was one to buy more than I could afford except for the running of the businesses. You also need to know that you probably won't get any credit for quite a while AFTER, although you should not be buying much. : ) Tradelines stay on reports for 7 years unless you manage to get them off. Your husband you say has good credit. As long as none of the accounts were in both names and he was not an AU on yours,then they will only come after you. Now what about vehicles and home? Whose name? If they are in both the creditors if they get a judgment will be able to attach a lien. If they are all in your husbands name, again not much of a problem, BUT I do believe it depends on what state you are in. I feel you are in a pretty good position to do the self bankruptcy route, but again you really need to think this thru and if you really feel bankruptcy is not an option then my way may be the way to go for you. Remember though that I amnot giving legal advice as I am not a lawyer, just giving you my opinion form my experience : ) Woofer
Thank you so much for the advice- and I definitely understand you are not a lawyer. To answer your questions: - I live in Texas. SOL is 4. - The house and car are in both of our names so that may be an issue. Any way around this? - I have the nerves to deal with this, but I don't know if my husband does. Phone calls are easily managed (I am changing my #), but visits to our house would be awful- they can do that? - I am in the same boat as you were as all debt has been incurred trying to build and expand two businesses. Due to a major manufacturing delay, sales projections are months behind. We have always lived below our means and even used savings as well to get two business going. So, the only spending going on has been for business purposes only. Prior to this we had no credit card debt- it's not something we want - really. Some questions: - A few of these cards are in my name and business name. Since it is virtually impossible to get strictly business credit out the gate, all of the cards are based on personal info and credit. Can they come after my business at all or is this all considered personal? I used no business info like dun and brad # when getting these cards, only SS#, etc. - If I later end up having money to settle these debts (and I'm hoping I will), is it best to do that? Or, because of sol should I just rough it out? - Last, other than NOT having a bankruptcy on record for 10 years and having to claim it for life in some cases, what are the advantages of doing a pers bankruptcy? If I need to buy a car, say in a few years, will the defaults look worse than a bankruptcy? Thanks again so much. It feels like there is no "good" solution to this and I wish I could pay the debts, but I have to decide soon about what ave. to take. .
Thank you! I would love to hear from somebody from Texas and their expereince with the laws here. I am doing my research but any advice ouwl be great (maybe I'll post this separately). Just a few last questions. - Why do you say no CCCS? That is the other thing I've looked at to at least deal w/ credit card companies and lowering interest rates and making some type of payment, although, I may not even be able to afford it anyway. - What kind of lawyer should I seek out? I don't think a bankruptcy lawyer as I know they always steer you in this direction. - If you don't mind my asking, how many CC did you default on? I am looking at 10 and wondering if I can deal with that many creditors. 5 or less is one thing - 10 could be totally overwhelming. Thanks again. I know things could be worse, but credit wise, I've never even been close to this territory so it feels "worse".
I think Woofer is probably referring to me. I'm in TX, but I'm not an attorney either! FYI - Make sure your house is homesteaded. About the only thing they can do is if they get a judgment, "cloud" the title with it. The judgment would have to be satisfied if/when you ever sold it. No wage garnishment in TX. Some very good protections from Debt Collectors. If you stay with the "self-BK" plan, and collectors start calling, you will need to be very familiar with the Chapter 392 of the Texas Finance Code, as well as the TX Deceptive Trade Practices Act. I don't have the cite for that off the top of my head, but it is referenced in 392, so you can find it there. Forget the FDCPA, stay with TFC. Lots of exemptions. Unless you are driving some super-high priced car they probably can't touch it. Still might be worth a consultation with a BK attorney so you can find out for sure what is safe what isn't. As far as the business debt, what kind of business formation do you have? Sole proprietorship? LLC? etc. If you are an SP, you have unlimited liability personally for the debts of the business. If you need to buy a car in a few years, expect to pay high interest rates - if you can get financed at all. Our economy is changing as we blink our eyes - finance companies are already tightening their reins, who knows if it is permanent. But, like Woofer said, let your husband buy the car. Unfortunately, we are a community property state. Creditors could include your husband in any lawsuits, regardless of who's name the card is in.
- Thank you for the reply. I will review the TFC- this really helps. - I believe our house is "homesteaded" if this is referring to homestead exemption. - Car is "truck- 10 years old - other car is leased unbtil July- will need another car after that but guess will need to pay cash for clinker or drive 1 car. - Business is c corp - but, it is very difficult to get any business credit without personal gaurantee - so, need to find out if biz will be affected by default on cc. I'd rather keep the biz out of it. Hmmm, I really probably need to cosult an attorney as most of the debt are business expenses. Our economy is changing as we blink our eyes - - Isn't it though. I think of all the people who declared bankruptcy in years past and were able to get mortgages several years later; don't think that this will be the case any longer... Unfortunately, we are a community property state. Creditors could include your husband in any lawsuits, regardless of who's name the card is in. - Ugh. Does this mean he'd have to appear in court as well? Thank again- will look at laws and need to consult an attorney as well I believe...
yes You really should consult an attorney. If someone sued, and named him, and he wished to defend. Good idea. Even if you stick with your plan, at least you will have had some legal advice - eyes wide open
Ok let me try to remember. Owed AX ...paid off. Owed BoA they gave me 0 interest for one year (I owed about 15K) Discover took a chunk off (I owed about 10K) they took maybe 1500 off and reduced the interest rate to 9 percent,as did a few others, either no interest for a year or took money off and lowered the rate. Owed quite a few others, that have been long gone as far as bank names, and several were for credit lines of 50K. Citi kept the debt, they sued, I wound up paying them much less than the charge off and they had to give me more due to violations. First Card, MBNA Chase would not deal with me whatsoever. #$%^&*()_them!!!! They GOT NOTHING, and I got a LOT more... : ) : ) Now again though if you have the stamina and the tenacity and are a good study and can talk in front of a crowd, and REALLY study so you KNOW what is up, then you can do very well on your own. I don't know about your problem that they could sue your husband for your debt. That is a bummer considering he does not want to deal with an of this. SOooo if he did get sued along with you , you are going to have to teach him how to do well in court.I mean you can do all the paper work and background work and research and he can just be there to answer not much and refer to you. Heck maybe they won't sue him along with you and this is where a lawyer would be wise. As for credit counseling, I feel they take your money, do not do anything except get you further in debt, and you as a novice even can do a lot better IMO. As for what type of lawyer you want a consumer lawyer and I know there are several good ones down your way. Just go to the NACA site and put your state in and see who there is near, and then either email and or give a call and get a consultation with the one you feel the best about. One more thing as you applied for some of these credit cards as a business, then you need to find out what is the best way for you to proceed, as it is a different ball game. Woofer
A consumer lawyer is great if you are sued, but IMHO, you need to talk to someone familar with business organizations to make sure all your corps i's are dotted and t's are crossed. Heck, a good one, might even help you as your finances crash to reduce your exposure more.
