Hi, I was served a summons from American Express and do have a friend at an attorney's office who will help buy me some time with a reply. I have held a 21k balance for about three plus years and kept making my 500+ a month paymnet until things took a turn financially at the end of last year. I was unable to keep them up any longer. I sent in minimal 100 payments here and there but my interest rate was raised to 32% and the balance is now up to over 25k plus attorney's fees according to my summons. I just don't know how I can work paying this off????? My grandmother passed away last month and left me a fifth interest in her moblie home which has a mortgage. My share will be 5-7k when it finally sells. I pulled a sample letter from this forum to see if they will take a 5k settlement but I am sure they won't. I am going to try though. I also want to send another letter arranging to pay 250.00 per month for five years as an alternate payment arrangement. I just can't commit to any more and at this point that is pushing it due to my financial situation. I am trying to avoid BK. Any suggestions??? Will a judge have any say in them rejecting my offers to settle?? Thanks for any help!
I'm sorry for your loss, but you're in over your head. WAAAYYYY over your head. Even paying down the debt with $5K will leave you with a very high monthly payment. At 32% on the remaining $20,000, your interest alone will be over $500/month. If you can't make payments of more than $500/month, the remaining balance will increase over time, not decrease. If there was ever a candidate for BK, it sure sounds like you. It's not the end of the world (BTDT) and trust me, you'll feel much better after it's filed.
I would see if Amex will do a settlement for that 5k to eliminate the debt. There is a "pay for delete" letter in one of the pinned topics.
First, default to what your friend (an attorney?) says. Make sure you answer the summons. You do not want to lose all your options before you start. You should try sending a "Settlement Offer" letter, send Certified Mail Return Receipt Requested" (CMRRR), and have the attorney's office send it if they can. At the least "CC:" the attorney's name/office on the letter. Exhaust all settlement options, but if none are accepted, then consider filing BK. As previoulsy stated, this may be your best option.
If bankruptcy is an option, look at filling out the paperwork for that and send it to them saying you're going to file on this date if you can't reach settlements with all of your creditors. But the changes to the BK laws have made that much more difficult.
Look into the Amex Oasis program. It may be able to help while keeping you in good standings with Amex. If all else fails check your options with a Chapter 11 filing.
I'm in a similar situation as OP. ~$70K in unsecured is spread out over many creditors. You might try the five-year payback offer, if they agree. The truth is that if you do have to file a chapter 13, your creditors will get paid back over five years (depending upon you income.) In addition, your unsecured creditors may get a very small amount of the original debt returned to them, 0% to 100%, depending on your income. I currently have 5-year plans with BOA and MBNA, including an 18 month 0% interest on a $9K citi card. It is hard to know if any particular creditor will play along. I have $7.5K with a credit union cc, but they won't even discuss options. I'l probably be dealing with a CA, and possible judgment on this down the road. Good idea to speak with your friend. On the other hand, what do you have to lose?
thanks for responses Thanks for everyone's reply. I did send a settlement offer of 5k to American Express. I sent a hardship letter as well explaining my situation and my possible intent to file BK. We will see what happens. I did send it certified to AE and to the attorneys office. I did not send it return reciept requested though. I think I can look up the delivery info online. If they don't work with that I will try setting up pmts for 5yr plan. If not BK. I did file a response to the summons so I'm good there to buy some time. My husband just did this with Bank of America, over 22k balance and they accepted a 5k settlement!! We were lucky. Chase set up a five year plan but at 368.00 per month. We have been toying with BK for over a year but if I can chip off this big debt maybe we can manage. Thanks again!
