I posted about Amexp sending a $6000 acct. to collection after paying too little on previous month's payment. I have been reading through this forum about how to deal with a CA, as I have never had this happen before, and I am still a bit confused. Any help would be appreciated. Questions: - Is the 1st thing I should do is send (1) debt validation and (2) Cease and Desist Letters? I am in no position to pay off this debt, even at a reduced rate, as I am facing serious financial problems due to the current economy and a new business that was funded mainly thru unsecured debt. I am able to pay monthly amounts on bills but until I start to bring in more money, I am barely making it. - Should I propose a payment plan, in writing, to the CA? They say that they are collecting for Am Exp so I assume do not own the debt.. - Will this end up in court if I can't pay? I am terrified of people knocking on my door, having to get an attorney, etc. What usually happens with this? I am seriously looking at what I need to do next to take care of this crushing debt (About $40,000). Because of high balances and lots of debt, most interest rates are 20%+. I do not want to declare bankruptcy and will probably call CCCS tomorrow to see about negotiating rates lower. Or, I may try this myself. Thanks for any help you can provide. I am completely stressed about all of this and not at all sure what to do...
$40,000 in debt? Contact a bankruptcy attorney. If your total household income is below your state's median income you might qualify for a Chapter 7 - a total, legal way to get rid of debt. The first contact with an attorney is usually free.
Try it yourself. You can send a validation letter, but NEVER send a cease and desist letter on debt that is in SOL. Why? Because they can not do anything except sue you if you send a C&D letter. You can specify that it is inconvenient for you to receive calls at any number at any time, and that all future communications should be in writing. You must use the word inconvenient because that's the way the law is written.
I know. I've researched this. I have no income - living off savings (which is almost gone). Am looking for a job now and business is starting to bring in some money, but slowly and not enough for a salary at all. Husband refuses to even say "bankruptcy" to him it is the worst form of humiliation and irresponsibility. Almost all debt is in my name, so only I would need to declare, but he is dead set against. I am also not wanting to do something that will follow me forever...these are my debts so I feel I should pay them. Am considering CCCS to lower interest, payments, and consolidate (not debt reduction). Believe me, I am totally stressed by this entire mess...and trying to make the best decision. Obviously, with the collection, things are getting a bit out of control.
Be careful with any of the debt mananagement companies. Many (maybe most) of them will charge you a lot of fees. They take the fees up front, out of your first payments, and don't pay the creditors. The idea is that if you are far enough behind they will negotiate. If you're behind you can do it yourself. Don't come right out and say you're going to declare bankruptcy, just mention that you feel obligated to pay your debts, but if they can't help you, then you might have to look at other alternatives such as bankruptcy. Ask if they'll lower interest for a period of time, like a year, to help you get caught up. In the meantime, cut all expenses that you can. Cancel the cable (you can live without it, believe it or not). Cancel the newspaper and magazines--read them at the library. Take lunches. I paid off (or transferred to very low interest rates) almost $77K of unsecured debt without declaring BK. It was hard--I worked four jobs at one time. I had no life. But it will pass and you'll come out stronger on the other side. You can do it!!!
As for looking for a job, even McDonald's or 7-11brings in money for the time being. It might not be much, but it's more than nothing while you are lining up other things. Do you have a family member who might give you a low-interest loan? Go to a lawyer and draw up a promissory note so they have something to get a judgment if you don't pay it. But you could pay off the higher-interest debt and pay them back faster.
Thank you. Congrats on paying your debt! Sounds bad but I actually worked with a CCCS 4 years ago after I had $50,000 in uncovered medical debt. The fees weren't horrible and we paid it off in a year with some huge sacrifices. After that, our credit was really great. But, I am intrigued by trying to do it myself. I guess I can at least try. I have v wealthy in-laws but they do not offer help and my husband refuses to ask for money. I should be able to get a decent job (I see your point though about anything) that pays well and then work on the business on the side and perhaps can dig myself out of this as sooner rather than later. I am ashamed to be in this situation but facing it head on is best. Just have to figure out this collection thing...Thanks.
I feel your pain & hope it works out for you. I tried the CCC route a year before I filed my Chap 7. I couldn't keep up the monthly payments and feed my kids too. As hard morally as it was to file the BK I see now that it was the best thing for me to do. Explore your options, alot of BK attornies offer free consults. Get all the facts together about both routes and then make a decision. Good luck! Tegleg And there is life after BK. I'm proof of that.
bk will not follow you forever,on a debt relief what they do is withhold a month then pay the next cycle so your behind.Most of the debt is in your name so it;s no skin off his back.but he might think about the stress on you.I know hoe stressful it can be.Why not set up a loan with his folks draw up a contract with min interest and pay them back.It's a loan not a hand out.He needs to come to your aid at this time because this could affect your marriage if he refuses to help you!
Thank you. It is complicated - my husband views even a loan from them as a very bad thing. Yes, it is very stressful especially since he does not know the full picture and relies on me too much to handle this area... You've actually hit on some issues that this situation has brought to light. My husband was very supportive of my business and I feel bad that things haven't worked out as well as planned. But, I'm really trying to do the best I can here; working on the business and also trying to find work outside - I think I am taking on too much of it all. I plan to call a bankruptcy lawyer tomorrow and CCCS. I appreciate everyone's help and suggestions.
You might show him some of the answers you got,it could give him another outlook but you guys dont need the stress,maybe scale the business back until your money is more stable.Keep us posted were here to help you through this
Thank you so much. I honestly didn't expect the emotional support here as well. He is beginning to understand more. We are both very stressed with little money coming in and the current economy. We are both looking for jobs, cutting back where ever possible, and I am going to try to work this out w/o bankruptcy - we'll see. I'm sure I'll have more questions as this progresses but greatly appreciate all of the help!
Good advice being given here. But look again at the BK option. While BK is a decision that has implications for your family, your husband cannot stop you from filing if that is what you see as necessary for yourself. I would recommend a conversation with a BK attorney to see what your options might be. Without knowing all of your options and thinking through the implications, you risk making uninformed decisions. Your husband is also not doing you any favors by not cooperating in finding a solution to something that is likely his problem, too.
