New to forum - PLEASE HELP!

Discussion in 'Credit Talk' started by Ray G., Mar 8, 2001.

  1. Ray G.

    Ray G. Guest

    Hello, everybody.

    I am in need of financial/credit advise and have tried several forums for this, but still have not received a definite answer on what I should do. I don't mean someone should know for sure what would be best for me, but the opinions have been very diverse and have only confused me. I hope I can compile more information here and be able to make a wise decision.

    I have recently had trouble with one of my creditors, to whom I owe approximately $20K in 3 credit card accounts. Due to circumstances that are not the object of this forum, this creditor has reported late payments 3 times on my 3 accounts in the past 3 months, therefore "dirtying" my profile with 9 negative reports in a short period of time.

    I have since contacted the creditor in order to correct these discrepancies, to no avail. I then stopped paying my bills, both because of monetary hardship and because I was hoping to find a solution to my problem, for which I first considered credit counseling services, but then learned it was not a good choice.

    This is not the first time I have this type of problems with this creditor, which is the reason why I decided to apply for a loan somewhere else where I could transfer my balances. However, the last 2 times I applied for a loan recently, it was denied due to my creditor's reports.

    Right now, I am not sure what I should do and need advise from others who might have lived and/or heard of a similar situation, or simply have the knowledge to deal with it.

    Logically, what I want to do --like most people in this forum-- is to remove the inacurate entries in my credit profile and eventually be debt-free. However, I am not sure which way to go from where I stand.

    1) Should I simply let the accounts fall into collection and then file for a settlement requesting that the creditor deletes all the negative information in my credit if I pay off my debt? This way I'd end up with a clean credit history and perhaps even a lower debt. The problem I see is that this creditor has its own collection agency, so it's not like a settlement with the customer (me) will be more advantageous to them than having to give up 30-50% of the balance to a third-party collection agency. They might not give in... ever.

    ... or...

    2) Should I restart the payments, do my best to at least meet the minimum payment from now on and, in the meantime, dispute every entry with the credit bureau? My concern in this case is that all the entries are very recent and close to each other, which might make it much harder for the credit bureau to regard this as a legitimate dispute and easier for the creditor to --unscrupulously-- prove the authenticity of them. Keep in mind that we are talking about a $20K balance, to which a creditor will pay more attention and dedicate more time than a smaller debt. Should I do this, the creditor will estimate I can still pay --disregarding how hard it would be for me to obtain the money-- and simply not give me any chance for a settlement in the future unless I slack off for a long time again.

    ... or ...

    3) Should I change my address and phone # with the creditor, cash my little savings, claim bankruptcy and after approximately 6 months start disputing. When I last spoke to the creditor about a month ago, I had no job. However, I do now and I am making almost $50k/year. Wouldn't this be a factor that would negatively influence the judge's decision if I do apply for bankruptcy? The only other thing I pay other than my credit cards and rent is my car. My monthly installment is $425, I owe about $10K on it and the car is worth a bit more than that. Wouldn't the judge condition my bankruptcy on my turning in the car and getting something with a lower monthly payment? I've heard of those cases.

    ... or ...

    4) Should I change my address and phone # with the creditor, cash my little savings and avoid them for about 6 months, after which I should start disputing the validity of my accounts with the collection agency? The oldest of my credit cards is about 5 years old and the newest, about 3.5. What are the odds of them not having my original contracts? This creditor is a MAJOR one and I would think they are highly organized. Plus, if they find one, chances are they will find all 3, in which case I will be back to square one after almost a year and with much worse credit.

    I hope you can understand exactly where I am coming from and suggest whether I should go with one of my approaches or simply with one I have not thought or heard of in the other forums.

    Thank you very much in advance and good luck to all seeking help in this forum!

    Ray G.
     
  2. Saar

    Saar Banned

    Re: New to forum - PLEASE HELP

    1. Why the hush-hush about the creditor's name?
    2. Dispute the delinquencies now with all 3 bureaus, regardless of the financial course of action you choose to take.
    3. See whether the creditor is willing to combine the accounts (hence creating only one negative entry instead of 3).
    4. Some creditors will agree to remove blemishes they reported once your account is current again.
    5. Do you have any available credit on cards issued by other creditors?
    6. I do NOT subscribe to the notion that CCCS is worse than BK. Au contraire.


    Saar
     
  3. Erik

    Erik Well-Known Member

    Re: New to forum - PLEASE HELP

    If you agree you owe the money and had been paying the minimum then I don't understand why the creditor "dirtied" your credit report?

    It sounds to me like you should have kept making the minimum payments and took your creditor to court if you feel like they were reporting negative information to harm you in some kind of malicious way.

    I doubt the creditor will let the Statute of Limitations expire on a debt of this size. They've already shown un unwillingness to negotiate with you so they will probably try to collect for awhile and then take you to court. I'm not sure what the court does in these circumstances but I'm guessing they would garnish your wages since you make almost $50K. Different states probably handle it differently.

    Declararing bankruptcy over $20K of debt with an almost $50K salary doesn't sound like it would work to me but maybe you have other large expenses...

    What should you do? Beats me, but good luck.
     
  4. Ray G.

    Ray G. Guest

    Re: New to forum - PLEASE HELP

    Thanks to both Saar and Erik for your replies. Here are some answers/comments/questions regarding them:

    1) Sorry if it sounded like I was trying to hide the creditor's name... or maybe I was. At any rate, I'm talking about mighty CHASE Manhattan. Argh!

    2) I doubt CHASE will want to join all 3 accounts. (Why would they do something that'd help me now if they haven't so far.) For that purpose, they'd have to increase the limit of my largest account by another $10K. Can't say I see this happening. All 3 accounts are currently closed.

    3) The only other credit card I have is with SunTrust with a $1K balance. They also closed that one, but I'm still paying it timely.

    4) Regarding bankruptcy, Erik confirms what I suspect and mentioned in my e-mail. I won't be granted bankruptcy given that my salary is $50 and my only other 2 major expenses are the car ($425/month) and the rent ($650/month).

    5) I believe this is sort of irrelevant here, but the reason why my creditor reported me to the bureau(s) is because I moved and I was not receiving their letters or phone calls, so my payments were very late once we finally spoke. Granted, I should have noticed and contacted them before, but a year of me trying to negotiate a better interest rate with them because of hardship and them not acknowledging my requests and increasing my interest rate on all 3 accounts by 11% after 2 late payments, really was not an incentive for me to WANT to pay even without a bill.

    6) Regarding the creditor taking me to court... What are the odds of this happening if I get a P.O.Box, change my address with them, change my phone # and avoid them for about 6 months, after which I can start disputing the validity of the accounts? Do you think, from your experience and your readings in this forum, that the chance of me succeding is high? The accounts are 3.5-5 years old. Will CHASE still have the original contracts? This would be playing hardball, which is not really my cup of tea, but perhaps the best thing I can resource to.

    Thank you again.

    Hoping to hear from you soon.

    Ray G.
     
  5. marvin

    marvin Well-Known Member

    Re: New to forum - PLEASE HELP

    1: I don't think it would do any good to dispute the lates, because they are probably still reporting to the cra's monthly, and the next report will reinstate the late info.

    2: How much money do you need to get the accounts current? Sounds like you shouldn't have any problem making the payments once you are current

    3: as far as the lates on the credit report, I'm afraid that it is our responsible to pay the credit card bills on time, regardless of whether or not we receive a statement. That is why I pay all of mine on line.
     
  6. Erik

    Erik Well-Known Member

    Re: New to forum - PLEASE HELP

    I'm just guessing with regards to the bankruptcy, I really have no experience with bankruptcy. You might want to get other opinions or talk to a bankruptcy lawyer to find out your options with that.

    I think Chase has the origninal contracts and if you've been paying them recently that would seem to be pretty strong evidence that you have some kind of credit card agreement with them.

    I also have no idea what kind of legal recourse Chase would have if they cannot find you. That's a good question though.
     
  7. Jack

    Jack Guest

    Re: New to forum - PLEASE HELP

    3 accounts, late for 3 months... isn't it like a 30-day-overdue delinquency each time? So 3 entries of 30 days for 3 accounts give 9 negative information. What's wrong with that?

    You shouldn't let it go overdue in the first place. You only need to pay like 5% minimum payment each month to keep your CC accounts in good standing (ie. R1). Now it is overdue... the entire amount has to be paid back at once. The more you avoid it, the worse it will get. Then you will get collection and bankruptcy. Speaking of BK...

    Why going bankrupt for only $20,000 when your annual income is $50,000? You probably want to build up investment, buying real estate, etc in the near future... You will have much more negative effects from BK if you have a good paying job. Everything these days requires a credit check. Examples inclue cell phone application, checking account application, apartment rental, job application. So BK at this time is no good for you. For unemployed people living on assistance, they have nothing to lose by declaring BK. You on the other hand, will suffer its consequence dearly.

    Change your address now will not make a difference. In fact, CRAs get address update automatically from the submitted reports. So as long as you have an active reporting account, your address will be updated constantly. I know this because all my previous addresses were listed in Equifax, up to the current one (only a couple of months old). So any one who has access to your credit profile will be able to track you down easily as well.
     
  8. Saar

    Saar Banned

    Re: New to forum - PLEASE HELP

    Ray:


    Of course they won't combine the accounts after they've closed them -- you should have mentioned that before.

    So you basicly have NO open credit card accounts right now. Some issuers (Providian, to name one) will agree to re-open accounts they had previously closed. I suggest you call Chase Cust Srv without giving any account info, and try to inquire whether cards can be combined and whether closed accounts can be reinstated (ANB & Cap1 allow it). Many creditors can accomodate both.

    Don't count on hiding behind a PO Box. Eric is right - with a debt this high they may want to put in the money and try to find you. The ways to do that are endless, and you're no Carlos. Plus, you may be under a contractual obligation to update your address, and as long as you make $50K and have a bank account, both reported under your SSN, getting their money back won't require any rocket scientist.

    marvin wrote:
    "I don't think it would do any good to dispute the lates, because they are probably still reporting to the cra's monthly, and the next report will reinstate the late info."

    As he said the accounts are closed. But even if they weren't, past delinqencies of the same account are generally not "reinstated" (status of R2 - R9 is another matter, that can be resolved in a different way).


    Saar
     
  9. mvfl

    mvfl Guest

    Re: New to forum - PLEASE HELP

    I think there is about a 99.9% chance that if you dispute the debt they will verify it, since the accounts were just recently closed and not even charged off yet. There's no way you can get that deleted from you credit file right now. 6 months of you hiding out is not nearly long enough for them to lose interest. Many of us on this board have gotten charge-offs removed by disputing the accounts, but those accounts are usually several years old and past the SOL and have often been sold and transferred between collection agencies. Thus, the banks no longer owned the debts and could not verify and the collection agencies often lack the proper documentation to validate the debts.

    As for disputing the lates, don't even bother. Since these lates are so recent and not the accounts are not even charged off yet Chase will have the information about your late payment and will surely verify it, especially since you are still past due. They will continue to report the negative information.

    Even though it will look negatively on your credit report, you may just want to consider credit counseling. They can often negotiate with the bank to reduce your interest rate, lower your monthly payment, and can get them to stop hounding you. This is a good alternative to being sued. A judgement on your credit is much worse than credit counseling. Sure, credit counseling looks bad on your report, but with your recent payment history no prime banks are going to give you credit anyway.

    Good luck.
     
  10. Ray G.

    Ray G. Guest

    Re: New to forum - PLEASE HELP

    People,

    Thanks so much for your input. It looks like:

    1) I should not claim BK, as it won't be granted (income vs. debt).

    2) I should not change my address and hide (they will definitely go after me with a debt this high)

    3) I should not dispute the late payments (they are very recent, in fact, happening right now)

    4) I should not dispute the validity of the accounts. I had heard that usually a creditor won't find an original contract that's 3-4 years old. Mine are, all 3. Still no good? What if I just try and it gets denied? Any consecuences?

    Would it be a bad idea to call them and tell them --nicely, but firmly-- that I would be more than glad to get current if they remove the entries they've recently made and that otherwise I'd have no choice but to go BK. No good? I would definitely not go BK, but it might be worth the try.

    If that doesn't work, what would be a way to remove the entries? That's really all I care about. A debt is a debt and I gotta pay it, but I do want to have a clean credit.

    Any more suggestions?

    Thanks.

    Ray G.
     
  11. river

    river Well-Known Member

    Re: New to forum - PLEASE HELP

    Ray G. said: a debt is a debt and I gotta pay it,but I do want to have a clean credit.If it's a debt,it's going show a debt on credit reports. You sound as though you want to ignore debt,but want your credit report clean. It is sooo new that it would look bad to dispute now. It will have to "age" before you could get it removed.If cards are already closed,I doubt you have a chance with Chase to re-open accounts.You can probably work out payments with them directly brfore it goes to collections. If you ever get back on track and want another Chase card they might consider you again.Need to freeze account with a "pay back agreement" so the interest accuring will stop.The interest clock doesn't stop when acc'ts are closed.The sooner you resolve this matter,the better off you will be. JMO.
     
  12. Marie

    Marie Well-Known Member

    Re: New to forum - PLEASE HELP

    You might try an agreement w/them. If you could get them to agree, in writing, that they'll either allow you to make pmts to the accts starting now and after, say 6 pmts, the account is considered new again. I can't remember what this is called, but the idea is that: you can catch up the account this way:

    if they restart your payments like you've NEVER been late: now your payment is due 15 days from now, and it's considered an ontime payment, then each payment after that is now also ontime. I think the idea is that the payments you've missed can be put on the end of the loan (that's what they do w/installments).

    Anyway: I'd call and only talk w/a supervisor. This situation makes no sense for either of you. Either they hound you for money you can't pay while ruining your ability to keep your credit and get another loan to pay them off: or you give up and they don't get their money for a long time and with a lot of effort on their part.

    If they're willing to do basically what student loans do: get an agreement on them reactivating the accounts, if you can. Starting the clock from today, and after 6 pmts or so: they agree to wipe all the derogatory info off your file.

    Now, you've made it sound like there was a strange reason why they messed up your credit rating: and then you got pissed off and stopped paying. I understand, but if there really are extenuating circumstances, bring those up, in writing: then the debt is disputed and they have more leverage to change your credit history.

    If you can get a supervisor who's a reasonable person: then it makes sense for them to work this out w/you. Just make certain to get any agreement in WRITING: before you pay a dime.

    You know, you could even let them know that if they agree to clean up the credit after 6 consecutive good payments, you're going to try and get another card to transfer most of these balances: certainly in their best interest to get all their money.

    If they've genuinely screwed up on your account, and you haven't just stopped paying on your own accord, then you really might have a valid dispute: one which could be negotiated to your favor. But since we don't know what the issues are: your best bet is a negotiated payment plan or CCCS.

    OH, yes CCCS is a huge black mark on your file. But if Chase won't make pmt arrangements... they may be an ok solution: after the debt is gone you can always begin cleaning your credit. But your best bet is a deal directly with Chase.

    You know, in the beginning of the conversation: I'd ask "what is your objective w/these accounts" They're going to say "getting our money back" . GREAT! We both want to accomplish the same thing: now lets figure out how. I really think if they help you w/your credit it's in their best interest b/c you can offload it onto another card and balance transfer them away: and they get their money faster. If they're your only negative marks on your credit report, then point that out to the supervisor. They'll recognize that it's in their best interest to work w/you and that way, instead of getting their money over several years they can have it all this year. Sometimes you really have to point out why it's in their best interest to do things;

    I also wonder if they'd transfer these balances to a New account number, put all the balances on the new account (if they can't reactivate the old ones). let you make one payment per month, and wipe the old accounts clean when you sign a new agreement for a new, big account. That would be more in your best interests b/c it immediately wipes off your bad credit and you can start shopping for better cards Now: ok I'd try this approach first. (don't you like how I can think aloud in my posts... :)

    Anyway, try to get your credit cleared w/them quickly so you can transfer the debt to someone else: ask them what other options they have, there may be a better one.

    There has to be a creative way to solve this: try to approach it with a good attitude and with a little cash, and it just might work. Just always GET IT IN WRITING. Especially w/regards to your credit being corrected.

    Oh, and if that supervisor says no, get their name and call back. Ask EVERY supervisor there. Then, if they all say no, put it all in writing and send it off to a VP. That way you have a better shot of getting a new agreement accepted. Keep trying for a month or 2. If it looks like they're just being big jerks, talk to CCCS. If it's your only debt it might be worth that big black eye you get from working w/CCCS (especially if it rebates that big interest you're paying on 20K).

    Your only other hope is that they'll sell these debts to a collection company and hope you get browbeaten into paying. If they sell them to a collection company you have a whole new set of avenues... but not while it's still w/Chase.

    By the way: how late are your payments? 60, 90? 180 days late?
     
  13. dave

    dave Well-Known Member

    Re: New to forum - PLEASE HELP

    I think Saar offers good advice for how you should deal with this situation. I would not file bankruptcy because the amount owed can be settled with the resources you have. Saying that, I did want to clear up an apparent misperception that you cannot file bankrupty because your annual salary exceeds your total indebtedness. This is not true. However, as you may know there is a bill in Congress to tighten bankruptcy laws. The impact of this change will force debtors to pay back their debts or a portion of them if the court finds that it would not cause extreme hardship to the debtor. The bill is very likely to pass and be signed into law. So, if you do want to file bankruptcy, you should do it before the law changes. But still, I doubt that bankruptcy is your best course of action.
     
  14. Ray G.

    Ray G. Guest

    Re: New to forum - PLEASE HELP

    Thanks again to everyone who has written and especially to Marie. Don't worry about your thinking in writing. If anything, it helps me think "in reading."

    I will then try to negotiate anything with Chase... anything that includes their removing the negative entries. I will follow the guidelines explained by Marie. I hope one of them works out for both Chase and myself.

    Since you asked, they have reported 30, 60 and 90 days late on all 3 accounts in the past 3-4 months.

    Thanks again!

    Ray G.
     
  15. Ray G.

    Ray G. Guest

    Re: New to forum - PLEASE HELP

    Thanks again to everyone who has written and especially to Marie. Don't worry about your thinking in writing. If anything, it helps me think "in reading."

    I will then try to negotiate anything with Chase... anything that includes their removing the negative entries. I will follow the guidelines explained by Marie. I hope one of them works out for both Chase and myself.

    Since you asked, they have reported 30, 60 and 90 days late on all 3 accounts in the past 3-4 months.

    Thanks again!

    Ray G.
     
  16. lbrown59

    lbrown59 Well-Known Member

    Re: New to forum - PLEASE HELP

    This is not the first time I have this type of problems with this creditor, which is the reason why I decided to apply for a loan somewhere else where I could transfer my balances. However, the last 2 times I applied for a loan recently, it was denied due to my creditor's reports.
    Author: Ray G. (---.mia.bellsouth.net)
    Date: 03-08-01 19:09==========================
    ============================
    This is Totally one of the most ASININE Flukes of the credit reporting system:
    The creditor destroys your credit rating so that you can't get the money elswhere in order to pay him off then has the gull to bitch P**S & MONE because he can't get his money:
    "There Should be a Law forcing any creditor to forfet the right to collect the debt who interferes in any way with your ability to pay! "
     
  17. lbrown59

    lbrown59 Well-Known Member

    Re: New to forum - PLEASE HELP

    Sure, credit counseling looks bad on your report, but with your recent payment history no prime banks are going to give you credit anyway.

    Author: mvfl (---.208.202.218.tampa1.level3.net)
    Date: 03-08-01 22:05
    =================================
    Why should it look bad ?
     
  18. LKH

    LKH Well-Known Member

    Re: New to forum - PLEASE HELP

    It shouldn't look bad but it does. We think since the person is making the effort to pay his debts that it should reflect positively. To a creditor it says this person got into financial trouble and therefore we are not going to extend credit to this person.
     
  19. Saar

    Saar Banned

    Re: New to forum - PLEASE HELP

    As dissenting judges tend to say: "I respectfully disagree with the majority" (Marvin, mvfl, River).

    Any day these entries remain undisputed is a wasted day.

    True, chances are they're going to verify the "R4" (or similar) status code. But they may very well fail to verify PAST 30/60 day delinquencies. You now have ~27 negative entries (9 per report). 2-3 rounds of well-written disputes may make you see you the light at the end of the tunnel.

    I have successfully disputed and removed 2 negative items on my report (which never should have been there in the 1st place) 1-4 weeks after insertion. Yes, I had to threaten Experian with litigation one time, but the end result: It worked.


    Saar
     
  20. river

    river Well-Known Member

    Re: New to forum - PLEASE HELP

    Assuming that the accounts are closed,as he mentioned,credit report is going to report the following:"accounts closed by grantor";possible R4;to a R5;then could go to R9.If he said he was 30,60 and 90 days late,then it has gone from R2 to R4 and going on R5.I could see disputing lates if accounts were "back" in good standing with R1 ,but accounts being closed:Why would you dispute lates with a fresh accounts labeled"closed by grantor"? I would think the number one priority would to be to stop "accuring interest"by freezing account with some sort of agreement and resume making agreed payments.Then,when account is brought back to a R1 status,then persue with late disputes.Please enlighten me on this subject.
     

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