I am a new member and wanted to introduce myself while I continue to read all the wealth of information here. Thanks to all the members and creditnet for all of the info. I am still dripping from just climbing out of 'de nile'. I have reached 'critical mass' with my credit cards and have dragged my whole family in with me. I have been charging just to live the last several months and now my minimums and my secured debt payments are more than my income. I have balance transferred, used 'courtesy checks' to pay and all kinds of finangling just to survive. I have been trying to protect my BS from this situation because he is such a hard worker, he did have some idea, just not how much. I was stupid, I have been charging and paying minimums most of the time for nearly 20 years! Recently it all come to a head when my BS went to our bank to get a loan and was confronted with his terrible credit report (due to me) by friends at the bank (small town). He was very supportive to me but shocked, and knew something had been bothering me for quite a while. ( We have always had separate bank accounts) We bought our house 8 years ago and rented out our former home. Those renters just moved out and that house needs a lot of repair, plus the rent there paid 2/3 of our mortgage here. We won't be able to rent it without repairing, and selling in the current condition would be basically giving it away. That was the loan my BS went to the bank for. The bad news- I owe nearly 64,000 on 7 major credit cards. 2 are with Chase because one was transferred to them and they are 25% APR- 16,000. I just actually got a Discover 0% BT 8000 and paid the chase down from 24000. However the Chase payment did not go down, they lowered my Credit limit the day before an annual auto charge went through so now I owe more than I can pay due to overlimit fees, and outrageous APR. The other cards range from prime to 19.9% We have an appointment Monday with Consumer Credit service, I am hesitating to do anything too quickly till I get all the advice I can, but we are certainly in dire straits at the moment. My monthly net is 2400 due to a very recent raise, BS is about 1650. We also own half a farm besides our 2 houses, but when I do a net worth its still only barely above 0. I hate to do BK because I don't want BS to lose the farm, its his family farm. Any input is welcome while I read past posts here.
First of all, what state are you in? You may be able to protect the farm through bankruptcy if your state allows exemptions as such. 1) DO NOT do Consumer Credit Counselling. They are a ripoff and will damage your credit as bad if not worse than a Bankruptcy will. They are not there to help you, they are in essence a collection agency for the credit cards. look hard at stories about these groups before you pay them a dime. Most of your money will go to fees and interest. One story I read recently was about a 70+ year old woman in LA who went to CCCS. She lived on welfare and had less than 800 a month income. CCCS set her up with a Payment Plan that required payments of just under $300 per month---until she was 154 years old----at %54 percent effective APR---with lest than $10 going to the principle. They took the rest as fees and interest on the credit card debt. Don't let the same happen to you. The story is located at www.bendover.com (Benjamin dover, a consumer advocate--I promise its not a porn link...) 2) Look realistically at what you owe vs. your income. At the current level of interest you are paying and the balances due you are unlikely to pay down the debt in a reasonable amount of time without a)selling assets b)getting extra employment c)living very, very frugally for a long time and d) trying to negotiate some form of settlement with them. 3) If you cannot pay the creditors and do not seek the protection afforded by bankruptcy with the amounts you owe I assure you they will seek judgements and file leins against your properties. They will be able to force the sale of those properties you are not living in that are covered by homestead exemptions (depending on what they are in your state). Realistically if you want to save the properties your only hope may be bankruptcy-- 4) Call me silly---what is your BS? Is it your husband? 5) If you decide you are going to go the route of BK stop paying on the cards and save that money to pay the attorney. You need to find one who is competent and well regarded, not the cheapest one. your case will likely be complicated and you don't want an amateur handling the details. 6) Just FYI I am not an attorney and my advice is probably worth what you paid for it
Thank you rondaben I live in Iowa. BS is beloved spouse. I have been reading and am so glad I did before showing up blindly for the consumer credit appt. I thank you so much for the warning. Next question, what about debt settlement? I just got off the phone with a California Atty, K. Fuchs, office. They are offering a 40% settlement paid over 36 months with their take being 12% of the total debt. I can't put 2 of the cards in the program because I did a balance transfer. So it is $52,609 'projected' settlement amount of 21,043 with their take 6313. Down pymt of 1894, with a we can work something out statement on the down pymt. With this plan I am to stop paying the payments on the cards in the program, make 'good faith' payments on the 2 other cards not in the program, and they will send out stop communication letters to the cc's. I pay $710 month minimum to a savings acct and when I have 40%, or the cards offer of settlement, I pay off a card and go to the next. Is this too good to be true? I assume this trashes my credit report till its settled, but its not good anyway. I have just started looking for part time weekend work, and it shouldn't be too hard since I am a nurse. Thanks for any input!
Most of the time the debt settlement folks are not much better than the CCCS. They aren't doing anything for you that you can't do yourself. If you want to try to settle with them you can do the legwork yourself and try to save the 6K the attorney would have done. Here's what would probably happen (I'm not for sure as I have no personal experience with the debt settlement groups but I have read some other folks experiences). 1) The attorney negotiates a settlement of 40 cents on the dollar for the credit cards. They take thier 6K and simply shuffle funds to the cards. 2) The cards, seeing the writing on the wall, denote on your credit report that you are involved in a payment plan and drop your score dramatically. They gladly take the 21k because they know if you declare a BK they get squat. 3) If the attorney isn't smart enough to have them sign an agreement not to sell the remainder to a third party debt collector you will get dunning letters in a few months from the CAs looking for the balance of the accounts--further trashing your credit. 4) If he IS smart enough to have them not be able to sell it to a third party at the end of the year you will get a 1099 form for the balance. Now you will owe the IRS (the biggest baddest CA on the planet) income taxes on the 30K that was above and beyond your agreement. Sorry to pop your bubble, but its not likely that you will be able to get out of your problem that easy. I'm not advocating BK but sometime it may be the best way to get past it and move on with life.
This is the same kind of a set up that got my MIL sued by a credit Card Co. DON'T BITE Fuchs: Change the H to a K an u get the Picture.
Thanks, does sound too good to be true, and I was hesitant on the stop paying the cc part. We now have an appointment to see a bankruptcy lawyer for advice. Since we have i/2 interest in a farm it gets more complicated for a BK7. This lawyer is supposed to specialize in this area.(farming) Found her through links at this site. The internet still amazes me, I am old enough to remember pre computer times!
I'm sorry that you will have to consider pulling the pin on your creditors (well, not really. They are like the mafia when you think about it). I hope the attorney does a good job for you. 1) don't feel pressured to go with the first attorney you talk to 2) if you get a funny feeling about the attorney, move along to one you are comfortable with 3) talk to at least 2 or 3 attorneys to make sure they are giving you sound, consistent advice. Good luck with this.
Thanks for taking the time to reply and the advice. Even though I would feel embarassed to BK, when I think about all the payments I've made I really don't feel like I'm abandoning ship that bad, at 200/m for several cards for several years, well its well into the 6 figure range I have ALREADY paid and still not getting anywhere on the principals so I think the CC's have gotten plenty.
Well, I wouldn't waste too much time even feeling embarassed. Bankruptcy--contrary to what the CAs would have you believe is NOT a moral decision. It is a financial one. The concept of loan forgiveness is biblical. By paying extortionary interest rates because of a few incidents where you made payments late and the creditors refusing to work with you they are enforcing a financial slavery upon you. When something happens--you are laid off for example--instead of working with you to help you get back on your feet they ding your credit, add late fees, jump your interest to the maximum allowable by law, and then harass you when they know you are unable to do anything more. That's why I don't feel sorry for them, and why you shouldn't feel embarassed to do what you have to to protect your self and your family from the wolves. I now step off my soapbox
I had a great experience with www.mycesi.org look them up... they will NOT rip you off... I am in my last month with them now... things were great with them... not 1 bad thing to say about them... my interest rate went from 29% to 6% because of them... hope this helps...
I was also going to advise not giving up on credit counseling. Some are good, some are bad. As Mongrol said, he's had good luck with one. jlynn has as well. I believe she used what I call the "real" CCCS. This is a TRUE nonprofit (as opposed to a nonprofit linked to a "for profit" company to help consolidate your loans or something). CCCS is the Consumer Credit Counseling Service. I don't think they charge fees, or if they do, it's minimal. Yes, you'll have that listed on your credit report. But you're already in bad shape, and I believe with CCCS people have had the annotation removed when they leave the program. With several properties, you're going to have trouble exempting it all. Even though the one needs repairs, it's still an asset that you'd be walking away from. I'm not saying bankruptcy isn't your answer, I'm just saying don't give up before you investigate all of the possibilities, including some of the credit counseling services. Stay away from ones like Ameridebt (if they're even still around). They've been sued by several states. Checking with the state AG and the BBB before making a decision is probably a good thing to do.
Thanks, We saw Consumer Credit Counseling today, the 'real' ones, and went from there to a bankrupcy lawyer. You're right with extra properties we either have to sell out and pay up or sign up for the debt repayment plan or file chapter 13. The CCS told us to get second jobs. ( CC slaves?) At least with chapter 13 the CCs won't be getting anymore interest! We would be done in 5 years with either plan. I just don't know if I want the court system involved in my life. Here in our state the trustee doesn't even like us to have life iinsurance fees. And since some of the debt was before buying our homestead and we have equity in the farm and house we really won't get anything written off. So we are still tossing around solutions, maybe living in the rental house ourselves (yuck) while fixing it up and sell our home, cash in a whole life policy for 15,000, sell the cattle.........lots to think about. It looks like some have had some here have negotiationg with their CC's them selves, the lawyer today said it has worked for some but not to ask her to do it because it just runs up huge atty fees due to the phone run around. I am not behind yet in payments but if we are going to do one of these programs she said it probably would be the thing to do (miss payments). This would sure help get things caught up around here before we go into a plan. Just have to screen all calls. THANKS for 'listening'!
Re: Re: Newbie, advice welcome. Might as well it's the worst kind of life insurance you can buy anyway.
