You all know my drill. Age 65, income $18K (half is SS), no "holdings", only paid-off house and 2001 auto. My debt with AmEx is $22K, now in their collections at NCI (Canada). I'd get hit with another $450 interest this week so Friday I agreed to pay $3500 to bring me up to "current" (I quit paying AE in July @$400/m) and NCI has had it since Nov 13. A BK atty told me that, owning my house, I could only file a 13 in Missouri, but could pay out at $650/m for 5y. That adds up to over $30K! ...So, an atty representing me can't nego down the debt? or do they do it, but pocket the difference? My 1/2 hour with him was free. He hurried me out because obviously he has nothing to "work with". I gave NCI my newly-opened-for-their-payments-only chkg acct #, but my $3500 is still there this morning, and I'm thinking of closing it since NCI refused every time I asked them to fax a schedule of what my payments will be after they receive the $3500. Isn't it like, on a formula, that would be SO easy to figure? They tell me no. And I have no written agreement on my part or theirs. Just say they won't know till they get my $3500. If my payments are too large, I'll just be in the same shape again next month as I am depleted and have NO MORE CASH on hand to give them. I asked what will happen at the end of my 0/0 for 6mo, and 9.9% the next 6m. Was told they could call it all in at the end of the 12m..."that WAS your in your contract agreement with American Express." I'm really scrimping by to give them any monthly amount on my $1500/m. I feel like I've signed a contract with none of the blanks filled in. What will happen if I close the acct and their e-check hits the bank tonight? I know if I call to tell them I've shut them out, they'll tell me it's too late--then I'll have overdraft fees on top of everything else. Is it better to let this ride, and hope for the best regarding what they "dictate" will be my monthly payments? One poster said I DO have attorney friends on this site, so I'm hoping for some advice I can take to the bank--(joke!) I don't know that I could take the suspense that goes along with just sitting around waiting for them to sic an attorney on my house. Thanks all.
Just close your bank account. If your bank receives their withdrawal attempt the bank will just return it with the comment "account closed". Your bank won't hit you with overdraft fees - the account is closed, and nothing can be taken out. But make sure that it is completely closed.
I closed my second bank account the day I got the response. I haven't yet recd a phonecall from NCI/Amex asking "why?" but I know their check was processed and returned that night through my bank. (I got cold feet, never comfortable that they wouldn't fax me what my monthly payments would be, nor terms of any kind, nor what to expect at the end of the 12 months of payments. And after giving them all I have left in life savings of $3500, there I'd be!) So...I thought a second opinion attorney (BK13) might be in order. This attorney told me that since my income was so far below $40,000 [can't remember what she called it] that she couldn't figure out why atty #1 would not want to nego down my responsibility to pay the full $22K. Actually, it's apparently not even a matter of negotiation. #2 told me I could get out with around $130/m for only 3 years, instead of $+600/m for 5 years, because it's simple math...Income ($1600/m) minus expenses ($1500/m) equals "all that is left" and that Amex will probably receive about .25 on the dollar. Can that be true???? She didn't think my expenses extraordinary unreasonable. Still, the court trustee will decide that and take all into account at the hearing. I asked how come the discrepancy between her and #1, and she said she didn't think she'd overlooked anything if my figures are correct (they are). But she was unsure if the trustee could/would "up the ante" because I own my home...even on my low income ($19K). I told her that if they force me into the complete payoff even at 60 months I would have to forego BK because that would necessitate me getting a home equity loan which I refuse to do. Anyone know how a trustee might view my income/debt/home on a 13? Thanks.
In theory an unsecured creditor is supposed to be no worse off in a chaper 13 than in a 7. Meaning if you have equity in the house not covered by bankruptcy exemptions your chapter 13 plan should pay at least the same amount. What state do you live in and what might your house be worth (lowball?) . Michigan has a 45k homestead exemption if you are age 65 or older. In the worst case you would just pay off the balance over 5 years with no further interest. If you allow a 20% deduction from market price for sale expenses it's likely a house worth up to about 60k would yield a "no asset" chapter 7 case. I know it is hard but I would avoid filing bankruptcy until I was forced to...because some situation might come along later such as medical bills that might really need bk relief and there are limits to refiling for BK again. There's not much reason to consider bk until they actually sue you, and part of your game plan should be to communicate to them that there will not be a recovery. This will either induce them to offer you a settlement otherwise you want them to go away until the statute of limitations expires. Really the game here is that collections is about getting the most money for the least expense. The longer you can drag it out the more favorable the settlement will be. You made the right decision not to pay here. Under no circumstances should you give them any money without a paper in hand stating what they agreed to. What they tried doing to you is very sleazy and unethical, why is that no surprise.
State: Missouri Home Value: <$90-95,000 I get what you are saying about holding off due to possible medical expenses. Especially since I have no savings, and everything is tied up in my home. I am not aware of any +65 yrs clause in homestead value...atty #2 said $8,000 exemption. Not much, is it? "Worst case you would just pay off the balance over 5 years with no further interest" is VERY worst case to me, because I can't afford the >$650/mo payments, home equity or not. If BK13 only spreads out payments over 5 years, then it's nothing more than a debt consolidation or payment payback plan at 100%...nothing very attractive about filing a BK for that! Atty #2 gave me lots of hope that their recovery will be about 1/4 while #1 would put me on a 5-yr 100% payback schedule. BIG difference! If I "communicate to them (NCI) that there will not be a recovery" won't that just make them sic their big dogs on me sooner? Can they force me to hold to what I said I would pay after I closed the acct I had previously given them access to? Better at this point to: communicate in detail? say as little as possible? merely hang up? or, I could just screen every call on my answering machine In the meantime, this has sapped my energy, given me "stress" coldsores that won't go away, and I know they diabolically plan to increase my interest monthly till I cave.
Wait a sec....$22k spread over 60 months is only $366 a month. You might want to confirm my thoughts about ch13 with a lawyer in your state. That is your worst case scenario. The longer you hold out, the stronger you will feel because you'll start to realize they are all bark and no bite. (I am in the hole over $400k unsecured , I know how scary it can be.)
All I know is he told me [actually, I just rechecked what I wrote down and it's] $580+/mo for 60 months. Them's still pretty steep atty fees! And 36% of my income, split about 50/50 SS and pension. Cat, thanks too for the tip on that vid and link to the other forum. Very enlightening, as that is pretty much the same situation I'm in, having stopped payment on the account I gave them access to because I felt they were being secretive, manipulative, and aggressive with me. Now I know what to expect when they call me demanding their money.
I think if you only have one or two creditors then it pays to wait them out for a settlement rather than go through the expense of a bankruptcy. There is another board I read where people are saying they are getting settlement offers from Amex. However, like everything on the internet you have to take it with a grain of salt, it may be shills for a debt settlement company. In any case, it looks (to me) like Amex is super cheap about collections, they farm the receivables out to one collection agency after another on contingency. So what you can take away from that is, (a) Amex doesn't want to spend money on suing you and (b) the collection agency likely does not make enough money to make it worth their while to sue you either. They are more interested in scaring you back into paying high interest rates than paying off the balance at 0%. Only when they realize that you aren't going to budge will they then settle, otherwise sell it off to a junk debt buyer for 10 or 15 cents on the dollar. It probably has something to do with the way the accounts are securitized. (you know they bundle your account with a bunch of others and sell it on wall street right? that's why they need the bailout, that market disappeared overnight). Anyway it's probably a good idea to screen your calls or get a new phone number, and possibly get a tape recorder and see if you can catch them at some FDCPA violations and find a lawyer to sue them for some money. You can only get $1000 per violation but apparently the attorney can get more. There are lawyers listed on naca.net, I don't know if they are any good or not.
If they get a judgement and garnish your pension if they can ss is not touchable,they will only get 25% max on a pension,so offer .25 on the dollar to settle.
If the pension is treated like salary the most they can garnish in MO is 10% of the gross, or nothing at all if the pension amount per week is less than 30 times the federal minimum wage.
The federal exemption is 25% of take home pay (gross pay minus required deductions such as tax), but if your gross pay per week is less than 30 times the federal minimum wage it's all exempt. I'm fairly sure $800/month would be totally exempt, pro rated that's about 125 hours a month times the minimum wage which is 6.55 now and going up to 7.25 in July. Plus each payor is going to apply that criteria separately to each pension. Now, for BK, Missouri doesn't allow the federal exemptions, not sure if the same rule follows for wage garnishments. But at the state level MO exempts from garnishment 90% of the take home pay if you're a head of household. So I think you'd be pretty much in the clear there too.
