Back in March of 2009, I was faced with having my hours at work cut, and was worried that I'd be losing my job, due to business getting slow. As a result, I was forced to quit paying on my two credit cards, which were both maxed out anyways. After paying for rent and food and other necessary expenses, I simply couldn't afford the minimum payments anymore. This ended up being a good financial move, because in August of 2009, I did get fired, and when I did eventually replace the job, I was making even less money. By October of 2009, both of my credit card issuers sent letters stating that if I didn't pay the past due amounts within 30 days, the account would charge off and be reported to the credit bureaus as "R9 bad debt". I didn't have anywhere close to the amounts they were looking for, plus I needed what little money I did have to survive, so I let the accounts charge off. In November of 2009, both creditors charged off the accounts and sent letters saying that the accounts were charged off, and that possible legal action might be taken to secure the balances owed. After November of 2009, both credit cards stopped sending statements, although I did get periodic letters from various collection agencies, and also from a law firm back in January of 2010, which I respoded with a dispute letter. They countered with a settlement offer, which I ignored, and they never sent anything again. I have not been bothered with phone calls, because I have an unlisted number. Now, fast forward to July of 2010. Suddenly, I started receiving statements for both of these credit cards again, and boy is the interest piling up. The statements give the full balance as the minimum payment (good luck with that), and indicate that the accounts are in default. The balance on these cards have really shot up; one went from a balance of about $4500 (when payment was last made) to $6068 today; the other went from a balance of about $12000 (when payment was last made) to $19980 today. Is this legal for the creditors to keep these accounts "open" and continue charging interest, even though they had previously closed them out, and reported (and still report) them as charge-offs and "written off as bad debt"? Is there anything I can do about this, other than bankruptcy, which I can't afford due to my income situation? The creditors keep sending settlement offers, which ask for lower and lower percentages, but higher dollar amounts since the balances are rising so fast!
Are you sure the accounts are still technically "open"? You can't use the cards anymore, right? It sounds to me like the accounts are closed and your creditors have just chosen to charge them off and turn them over to their attorney for collection, which doesn't mean they have to stop charging interest and/or making attempts to collect the debt. If you keep ignoring the debt, the balances are going to keep growing. So, I would seriously think about devising a strategy to settle these debts now before things get even worse.
