HELP! Where to start...

Discussion in 'Credit Talk' started by AntiCRA, Nov 2, 2001.

  1. AntiCRA

    AntiCRA New Member

    I am new to this board. I am fairly new to this whole subject. I have been doing some research online though. I started out thinking we would have to file bankruptcy. We have had a combination of difficulties contributing to our circumstances. My husband had an emotional breakdown and had to stop traveling (an integral part of his job and our income) and he took the only job he could find locally which about halved our previous income. During that time we had to use credit cards, cash advances to pay bills, buy groceries etc, to top off some depression spending as well while he healed. We used cash advances to help pay off the negative equity in a car loan so we could sell the vehicle and get rid of the $400/mo payment. We had previously refinanced our house and taken out a second at 125% LTV. We had paid off credit cards with that. Therefore we had a bunch of accounts which were open for use during that time. His prior company kept asking him to come back and he finally did after he felt he could travel again for a while.
    When he first started back it took a month before he received any commission (which is half our pay). It seemed we would be on our way to healing but even with full commission we couldn't make all our payments. We started selling things on e-bay and other forums. This helped us keep up for a while. Now because of the Sept 11 even and the down turn in the economy they have not had much work to send him out on and commissions are way down.
    I have been able to pay for the mortgage and the second as well as utilities. But I can't touch any of the credit cards. So, our house is mortgaged beyond it's value, our cars are old though we do own them outright(1975 truck, 1976 car and 1965 car) and we don't have much else in the way of assets (certainly nothing the used items markets would bring much from). We have no retirement or savings or investments.
    In my research I found the Due Process site as well as discovered you could negotiate with creditors but that the companies who offer this service charge way high fees. The one I have recently looked into the most lately seems to be the best (, comprehensive bankruptcy alternative). I just don't know how to pay for this ($2,900 up front). This is a good deal considering our unsecured credit card debt is over $88,000 (spread out between 11 different accounts, the highest balance of which is $17,500 and the lowest is $500). The mortgage is at $137,800. and the second is at $34,700.
    Do you think I should somehow have a company handle this (I haven't a clue as to how I could pay them). Or do you think this is something I could negotiate? Should I send them letters? What kind of letters? They have been calling me and at first I was setting up post dated checks as they requested but now there just is no way to do that or we will fall behind in our mortgage etc. So, I have not been answering the phone unless I recognize the phone number on the caller ID.
    I just don't really know what to do.
    I appreciate any help or information I can get.
  2. roni

    roni Well-Known Member

    I'm sorry to hear of your situation... I hope everything works out for you soon...

    NO, I don't think you should have a company handle this for you for a very simple reason... It will leave a black mark on both of your credit files that is harder to get off than a bankruptcy... There are really two type of companies working today... One wants to provide homeowners with consolidation loans for a stake in a second mortgage. They charge high fees and if you default, they will get house because it is a secured loan.

    The other style, negos lower APR/fees with the creditors. These companies are actually owned by the creditors in most cases. They do nothing you can not do yourself... by asking your creditors. If you use them, many people can not even get a new secured credit card for more than two years. When you compare that to bankruptcy, who people have been able to get unsecured cards within six months and mortgages within two years, its seems like a no-brainer to avoid these people.

    Here are my suggestions: Plug the telephone in and answer it. Avoiding the situation will not make it go away. Many times the companies realize what is going on and they may be contacting you with the exact same type of offers you're thinking about having to pay agencies for or are asking for letters here. Explain the situation in full like you did... be sure to mention that you're considering filing bankruptcy but would prefer to avoid. Ask what is the best suggestion they can do to help you.... See what happens.

    Also, I had to sound like a male-c-pig, but you didn't mention if you have a job. There are two of you in the relationship... for richer or poorer right?

    Good luck... Keep us updated!
  3. Cadillac408

    Cadillac408 Well-Known Member

    If you read her post, she clearly states that she is able to pay the mortgage, the second, and the utilities.'s not too late to edit your post!
  4. AntiCRA

    AntiCRA New Member

    Thanks for your reply.
    Actually I am a homeschooling mom so no, I don't have a personal income. Though we have had some side business and I am the "office" do it all when we do get business. I have considered looking for part time work. It would have to pay really well though to make up the payments needed per month to take care of the credit card bills not to mention extra fuel charges and any other expenses related to full time work. I don't think I could earn that much even full time anywhere (especially in our current economy). The question becomes would it tip the scales enough for us to make it (in all honesty, I don't think it would). And then, do I leave the kids at home alone? They are 9 and 11. We have discussed putting them back in public school but would like to avoid that if possible (as they have had problems in school and neither of them want to go back). Last year we were involved in a public school program which partnered with "Home Schoolers" (and legally we were considered public schooled through the alternative education laws) but it required me to be with the kids in the classroom on site at all times. Not to mention it cost us a lot to commute back and forth to the school both in fuel and in time. I know some people juggle the kids with family but we don't have family near by. Then again, is there some kind of work I can perform from the home office? I see a lot of ads but they all look like hype and scams.

    What about the credit negotiators who say they can lower your actual balance by 60% to 80%? (not just the late fees and APR) is one that does this type of negotiation and a whole host of other services. The other negotiators of this kind want 25% of what they save you and that is due when the agreement has been made with the creditor.
  5. Cadillac408

    Cadillac408 Well-Known Member

    O.k. my bad. From her post I thought that she was working.....guess I was wrong!
  6. AntiCRA

    AntiCRA New Member

    Sorry MP $40,
    Didn't mean to be too vague. My fault.
  7. AntiCRA

    AntiCRA New Member

    I clicked on the link at the bottom of your post and don't get anywhere.
  8. roni

    roni Well-Known Member

    Which link IB?
  9. AntiCRA

    AntiCRA New Member

    The one for this:

    Repairing Your Credit?? Dealing with Nasty Collectors??
    Self Help is the Best! ESSENTIAL READING...
    This simple 4 minute read could save you $400+ in fees!
  10. roni

    roni Well-Known Member

  11. bbauer

    bbauer Banned

    I'm quite sure he will fix them soon.

    He put those links on his profile because he figured that it would somehow magically denounce me once and for all and prove me to be the criminal snake oil salesman that he perceives me to be, here for the sole purpose of ripping people off.

    Not to worry. He will probably be quite certain to get them fixed quickly so that he may continue his hate campaign, whatever it is that he hates.
  12. roni

    roni Well-Known Member

    Bill: This issue is you following the law. It's nothing personal. I've said that a million times. You forgot to say how you don't think this law applies to creditwrench. It's not a "hate" campaign.

    With that said, thank you for removing your signature plugs at the bottom of all your 2000 posts on (whatever the reason). I have asked PBM to post the reason he closed the other thread. His email said it would be done by today, but I'm sure he's been very busy.

    Have a nice weekend...
  13. bbauer

    bbauer Banned

    Your taglines are boorish, garish and turn the board into a christmas tree.
    It may have had some purpose at one time, but now it only gives the appearance that you somohow might be attempting to be the sole teacher capable of making Bud weiser.

    I have ceased any and all attempts to advertise anything whatever in any public manner and have done all that I can to offer what I believe to be helpful suggestions to all those that I can.

    I removed all taglines in the hope that you would follow suit and heal the wounds and return this board to some semblance of normalcy. If you like taglines, rest assured that I for one have no objection to them if they are at least changed from time to time as Supershawn, myself and many others do, sometimes offering a link to a bit of harmless humor or an informative link of some kind, whatever, but for heavens sakes give us all a break by at least giving us some variation from time to time as you happen to run onto things that are humorous, educational in some way, interesting, whatever turns your crank.

    After about 3 days, dead fish, visiting relatives and old tired taglines all smell about the same.
  14. AntiCRA

    AntiCRA New Member

    So, does anyone out there know anything about Anyone with experience with them?
  15. bbauer

    bbauer Banned

    I never visited them until you just now mentioned them and so I went there and it says that it's under construction. That's all I know about them
  16. PsychDoc

    PsychDoc Well-Known Member

    Hopefully, somebody wiser than I will help IB figure out the best way to deal with these debts.

    Regardless, I have a few bits of "sage" advice, IB. It's probable that I'm not telling you anything you don't already know, so in that case pardon the pedantics. On the other hand, I hope that something here provides a bit of moral support. Here goes:

    1) If you've not yet done so, immediately commit yourself to a written budget that looks something like this... Write down your total income for the month. Then allocate money for the things you need to live, including the mortgages, utilities, automobile fuel, and groceries. Oh, and don't skimp on the groceries. (Don't buy caviar either, LOL, but allocate a generous amount for groceries and enjoy good meals.) All of these NECESSARY expenses need to be allocated before you ever take the first phone call from a collector. After all, you don't want to lose the house. Your husband needs automobile fuel to get to work. And your family needs to eat in order to keep your strength and patience for the tough fight ahead.

    2) Next, take stock of how much is left over BEFORE you pay a single credit card. In other words, you'll know IN ADVANCE, BEFORE SPEAKING WITH A SINGLE DEBT COLLECTOR, just how much money you're going to pay these creditors. Finally, write down how much you're willing to pay each creditor and follow through the next month. You'll likely allocate MUCH LESS than is owed them. As long as you're paying SOMETHING on the debt (yes, even if it's less than the minimum payment, and even if the interest isn't even covered), they'll have much less legal standing if they take you to court. You'll be able to demonstrate a willingness and sincere intention to pay them regularly, and this will definitely signal to most any judge that you're not a "deadbeat" but instead are a good person doing the best you can.

    3) Finally, begin taking the phone calls from creditors. Don't hide. Tell them exactly what you've allocated to them. They will scream and yell, because that's their job. They'll do everything in their power to get you to allocate more. They'll go for guilt. They go for insults. Whatever. Just remember: Never let a debt collector talk you out of your money, because you've already budgeted IN ADVANCE just what you're going to hand them. If somebody gets abusive, tell them that you are only willing to take a call from them once a month and hang up. If they continue to be abusive (calling you more often), then inform them that you'll only communicate with them via written correspondence and that they're no longer welcome to telephone you. (This is your legal right.) Document everything. If it comes down to it, and the phone calls are abusive and upsetting, you can stop all of that.

    4) You're clearly way over your head with debt, and something has to give. Bankruptcy should be a last resort. Instead, paying less than you owe is much, much, much better than not paying anything at all. Keep in mind that -- since you're way over your head -- you're going to trash your credit. Clean credit for awhile is not in the picture. For that reason, you SHOULD consider CCCS if you've got one nearby. They can negotiate your interest rates down so that your debts actually get paid off over the course of a few tough years. When everybody's paid off, your credit WILL be trashed. On the other hand, some creditors are far more willing to remove derogatories from PAID OFF CCCS CLIENTS than from DEFAULTED BANKRUPTCY EX-CUSTOMERS. In other words, one day you'll be in credit repair mode, and CCCS notations -- given a special "R7" classification with Equifax -- are easier to remove than the charged-off "R9" ones. (However, even R9's can be removed with a lot of effort, skill and determination, as some Creditnet members have demonstrated.) As you see, I disagree with the notion that CCCS notations on credit bureau files are somehow worse than bankruptcy notations. I do agree with him, though, that if you can negotiate the lower APRs yourself, by all means do that, but get EVERYTHING in writing.

    Ok, these are my best suggestions. Good job on getting out from under the car payment, by the way!

    I would also highly recommend a book (this is an enjoyable, easy read that really targets some of what you're going through) called "Financial Peace" by Dave Ramsey. It's available at

    Good luck, and stick around the board here! Welcome!

  17. KHM

    KHM Well-Known Member

    I suggest to stay far away from them, they do for you what you can easily do for yourself. I'm assuming from your original post you are now accruing late fees. Call each of the creditors and tell them your situation. All of my credit cards staements have sent notices saying if because of the Sept 11th attacks it has affected you, please call so we can help. It may not have affected in the sense of losing someone in the tragedy, but your husbands job was affected by it. By you calling them you are showing good faith in trying to re-pay your debts. Ask them to lower the interest rates, ask them to lower your monthly payments, if the CSR won't help ask for the executive office.
    If you go with the 'pay-down-your-debt' people, I have heard by others on the board, that it is a worse mark to have that than a bankruptcy.
  18. PsychDoc

    PsychDoc Well-Known Member

    Anyone who suggests that bankruptcy is the better classification is misinformed. Equifax, for example, designates debt-repayment accounts as R7, while accounts included in bankruptcy are labeled R9. Although both signify a damaged credit rating, higher numbers are always worse than lower numbers. Moreover, an R7 drops off the file in 7 years, while a bankruptcy R9 remains for 10 years (in most states). Finally, creditors who have been successfully paid back through debt repayment programs are usually more amenable when it comes time to cleaning up credit bureau files than are those creditors who simply lost the money they loaned after the recipient declared bankruptcy.

  19. AntiCRA

    AntiCRA New Member

    Thank you all for input.
    The companies I am referring to claim that after you reach a settlement agreement amount that after the payment is made the credit report will read "paid as agreed" because of the wording in the agreement letter which the creditor agreed to. Any experience with this?
    I have indeed put together a very strict budget. What would you say is reasonable for food allowance? I put about $350/Mo. when I did the budget (it was tight on purpose). We have been eating a LOT of rice and beans lately. I've gone online and found economical recipies and have been trying to have "fun" experamenting with them. Frankly the only way we can pay anything at all to any creditor is if we exclude clothing and any extra expenses in the gifts, entertainment or eating out type fields. I'm not complaining but it is difficult to know what is setting us up for disaster even further or what will help. I suppose a middle ground? Divide what is left between these areas? Neither way will it seem to suffice but if that is the best we can do. Or should I completely delete these categories and only give to the creditors? (which still won't seem to suffice). You are right in that there are late fees as well any payments we make will not even come close to covering any interest charged. So, the balances will go up, if there is no negotiation done with the balances. It is a delemma.
  20. anna

    anna Well-Known Member

    I've been reading your posts since yesterday, and haven't responded because reading them really gave me the willies. You are ME about 2 years ago. I understand how frusterating and hopeless you are feeling. I will tell you some things NOT to do, that I learned the hard way. Do NOT stay at home night afer night 'cause you can't afford to go anywhere. Go for a walk, a drive, SOMETHING. You will go crazy, your husband will go crazy, you will begin to fight and argue like crazy people. We finally got a tent, and started camping (very cheap),and to this day, it's our favorite activity. There are plenty of dinners that you will learn to make now, out of neccesity, that will be requested for years to come. My daughter' favorite meal of all time is some things that I mixed together because that's what I had. We named it "slop", cause that's what it looks like. Now her friends at college are always asking when I'll be sending more slop down. Do NOT moan and groan. There is a silver lining in every cloud. Things will get better over time. Life goes in cycles. Since you're down now, you can only go up! Hang in there, it will start to look up soon. And by the way, I know with Christmas coming, it may seem worse, but with a little effort, and the right frame of mind, it may be your best ever! And remember, you are not alone. I wish I had known about this forem back then, but we were too poor to even have a computer.

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