dear everybody, as one who is aware of, let alone in control of, her financial situation, i'm not far along the evolutionary path at all. but i want to begin to change that. i am writing to all of you in earnest, and i'm hoping you will want to suggest some steps that would be good for me to take right now. i have read the newbie faq and many of the other creditnet posts but, i'm embarrassed to say, i still am unsure of my options and a path to take in my case. so many posts detail the specifics. i don't even know if i fit into this whole scenario. so i am going to list some information about myself to start things off, and hopefully you will tell me if your methods apply to me. ugly snapshot: --i have $40K debt in total, mostly cc debt, some cu loan and student loan debt, some medical bills in collections. --i am presently unemployed and unable to pay anything at this time. --of 19 accounts listed on my CR, 4 are presently in collections; the largest cc debt of $14K to AMEX is longest in collections (in-house collections since august and NCO 'assigned' also, back and forth), 7 more accounts are 120 days late in June, and the other 8 listed are a combination of one current/pd student loan, old cc accounts that are closed by the creditor but still listed with no balances, and some that are less late than those mentioned above, but still delinquent. --all accounts are closed except a couple gas cards, my RNB card, and my Cap1 card (by some act of god?) --my phone rings constantly and i ignore it just as constantly. i'm so tired of this, though. --before i knew better and while i was still working, i agreed to a five-check post-dated check thing with NCO for AMEX (she taped my agreement), two of which checks were cashed, one i stopped payment on when i lost my job, and the others are in limbo. there is no cash in my account, but they do have the checking acct info and could cash them if i ever have funds again. i think i should just get a new bank, if i can, since i can't keep paying monthly fees for no funds, anyway! --i am thinking of declaring bankruptcy because things have gotten so dire, and i don't have a way to make ends meet. i have no assets and don't know what else to do. so, in your opinion, would the validation or settlement routes discussed here help me? i may be able to borrow up to $2K at most to offer some settlements, but no one is likely to bite for, like, .04 on the dollar, if i understand this correctly. would you recommend BK in my case? (i am particularly interested to hear what Marie and Breeze would recommend, given their other posts on the topic.) thank you for reading this post despite its length. all of you provide a tremendous lot of help to people in need. anything that you could suggest would be gratefully considered. apparently i didn't learn all i ever need to know in kindergarten, soren
I *know* others here will disagree with me on this one, but with 40K mostly in credit card debt and with no job, I'd definately go the bk route. With interest, which continues to accumulate, it would take you as long to pay it all off as it would to suffer through having a bk on your credit report for ten years....unless you think you'll score a high paying job within the next couple of months. Anyway...that being said, I would personally consider trying Lizardking's test project. I could kick myself now because one of the things we disputed on my husband's credit report was an incorrect middle initial. Argggghhhh!!!! Why did I do that??? Wish I had known then what I know now...but that's beside the point. Anyway...search on his user name and go back a couple of weeks and you'll run across it L
If you don't have the funds to settle, your only option may be BK. Amex will eventually file suit and you will have a judgement against you in addition to everything else. With $40K in debt, I would seriously consider BK.
thank you, whyspers, for responding. sorry it has taken me a while to get back to you. i do hope to secure a good job soon; however, since it is not here yet, and i am continuing to have these problems, i would like to be able to do something in the interim. i thought i could prepare the preliminary paperwork for a BK7 and file if a judgment did look like it was on its way, but in the meantime, do you think i have a chance with Lizardking's methods? i would really like to avoid BK if at all possible; it just may not be realistic, i guess. i did do a search on 'Lizard King' and 'test project' or 'lizard king's methods' or 'credit repair', among other terms, but the only way i got a list of results was to put in 'Lizardking' alone. then the results were in the 2000 range, and among those i read through, i didn't see one that outlined a method--they all seemed more like advanced specific posts. are there particular search terms i should be using? (the search area on the page doesn't seem to have advanced search functions as options.) thanks again for your help--i feel grateful for any input. soren
sloyarole, thank you for taking the time to respond. i looked at that dave ramsey website, as it was the only thing you wrote in your post, but i must tell you that it was not exactly self-explanatory in its content. what exactly is that all about? i didn't see the direct link with my original post. ultimately, i checked the products tab and that was the only area of the site that clearly referenced finances. he offers various kits in the '$100+' range and although they may be "fun" as he said, i don't have the money for that kind of "fun". if you feel that he has some worthwhile free information befitting someone in my situation as it now exists, please reference that page, in particular. otherwise, i would be very interested to hear about your own experience with this site and why you feel it is commendable. thank you, soren
Soren, I can't advocate this but I have heard it said <cough Lizardking cough> that the CRA's require three matches in order to verify a bankruptcy. 1. Name 2. Address 3. Social Security Number Two out of the three must match. Sooooo...if the spelling is a little off on your name and you no longer live at the address where you filed, then theoretically you could have the bk deleted in a couple of years after then send the paperwork off to storage. Like I said...I don't advocate this because if they found out you were doing this, well...I don't know what would happen except I know it wouldn't be good. Also, there have been people who have successfully disputed bankruptcy, so don't despair that you will have to wait the full ten years before you can ever get credit again. My husband filed in 98 and in 2001, DMB gave him a credit card with a 9900.00 cl. His scores are better than mine at 703 on TU, 697 on EQ and I can't remember on EX. It won't be easy, but nothing ever is. L
tmitchell, thanks for sharing your input with me. i really appreciate it. i have a couple questions for you, if you don't mind: do you think credit card companies would be willing to settle for pennies on the dollar when the alternative in my case would be BK and i forewarned them of that? when do you think they would seek a settlement and would they get it if i am 'judgment-proof'? i was reading in a book on BK that someone in my situation (judgment proof, no assets, unemployed at present) should do nothing and wait to file BK until after any judgments so that they would be discharged, should it come to that. it seems that amex will get to that point because i do owe them the most and it has been in collections a while now. i realize that BK is looking like my most viable and possibly only option at present, but i am wishing that there was some other way to handle this. even outlandish alternatives are welcome, but i do recognize that BK seems the route most allied with this whole situation/mess i am in. any longshot come to mind? do you know, have any creditnetters had inordinant good luck with negotiations? or does anyone have any pre-bankruptcy advice for someone likely to go that route? thanks again, tmitchell, for your sound words of advice. take care, soren
WELL, DAVE RAMSEY WAS A REAL ESTATE INVESTOR TURNED FINANCIAL COUNSELOR. IN SHORT...BY THE TIME HE WAS 26 YEARS OLD HE WAS WORTH $4M. LESS THAN 5 YEARS AFTERWORDS HE WENT BROKE. LOST "EVERYTHING!!!!". AFTER GOING THRU BK AND REBUILDING HIS WEALTH, HE MADE IT HIS PERSONAL GOAL (ALONG WITH THE MAN UPSTAIRS) TO HELP PEOPLE GET OUT OF DEBT. WITH THAT...IF YOU GO TO WWW.DAVERAMSEY.COM AND CLICK ON THE "COUNSELING" LINK, YOU CAN SEARCH FOR ASSISTANCE IN YOU AREA. IN THE AREA I LIVED IN, THE FIRST CONSULTATION WAS FREE AND THAT'S ALL MOST PEOPLE NEED. DON'T WORRY ABOUT THE KIT. BY THE WAY, I HOPE YOU WORK YOUR WAY OUT OF THIS TOUGH SITUATION. I'VE BEEN THERE AND BACK. IT'S A TOUGH HILL TO CLIMB, BUT YOU'LL MAKE IT.
ah, whyspers, thanks for sharing the info you've heard about. it's something to keep in mind, certainly. i think if it comes to filing (and likely it will), the BK wouldn't add too much damage to my already...um...marred credit report. it's already been sporting the "shabby chic" look for a while, you know? hey, thanks for sharing the info about your husband's scores, too. it gives me hope that all is not lost no matter which way i turn, although sometimes it can feel pretty scary. i feel like i'm on some big cliff edge or something. whatever happens, i *know* i would like to find out more about how to use a full-spectrum approach to repairing my CRs. so i think it's great that you offer input to people like me. don't underestimate what a service it is to just answer the posts of worried people like myself. whew. thanks. i'm wondering...are post-BK CRs cut and dried or can those be improved despite the new BK notations? meaning, are there things that are usually possible or necessary to dispute on BK CRs, from what you've heard or experienced? BTW, is there some way to do more advanced searches on this site other than using the one search box at the bottom of the pages? yikes, sorry to rain all these questions down on you. anything you've got time for is great. thanks again! soren
thanks again, sloyarole, could you give me some info about what kind of tactics he suggests, especially if it is all relayed in the initial consultation and that's usually all people need anyway? what one thing or idea helped you the most? i think if you remember my initial post, my present situation is pretty dire, and although i am admittedly in need of some budgeting skills, i presently need to sort out this immediate situation. it's outside the scope of creating a budget. i don't think counseling could help until after i have dealt with the present, as i have already tried the counseling through myvesta and cccs and neither could work as money in-flow is now the problem. and my present picture is shaped predominantly by that and not only the debt i have incurred. i look forward to hearing about your successes with this, soren
soren, Could I turn back the hands of time and the effects of gravity ;-), I too didn't learn all I really needed to know in kindergarten, but I did live through bankruptcy. There's always an an opinionated amount of posting into whether one should file or not BUT the last this came up on the board, of those that had actually filed BK, there were no regrets that I am recalling, the nasty opinions seem to come from those that haven't walked in those shoes, so beware there's preconceived stereotypes and judgments that people try to impose on you for having decided to file but the reality really is, we've all got to do what we must do and to the best of our abilities at the time and under the circumstances at the moment. The effects of gravity aside, if I could go back to that time in my life now, prior to filing, I think I would have been well advised to have done some BK preparation before filing -- BK homework! I'd stop throwing away those bills and gather up the piles on the desk (with no bottom that you can see, mind you) and sit down and really assess my situation -- who says I owe what and to whom. I LOVE lists, likely I'd have burned through a yellow pad or two, figuring out just where I stood financially. I'd answer the phone and tell the collectors to communicate with me only in writing or get an answering machine and send letters to those calling requesting they communicate only in writing. I'd get copy of my credit reports and see what's reporting and compare it to my lists above. I'd send validation letters to all collection agencies disputing their claims. I'd send OC verification letters to all creditors requesting the same. I would NOT live my life in fear and on the verge of tears feeling shameful and guilty. The hardest part, especially when you're in your shoes before BK is everything is so out of control and it feels overwhelming and chaotic, the stacks of bills and phone calls only add to that -- If I could go back, I would take some control, not in trying to avoid BK but in preparing for it. I'd clean up my existing creditors via the methods this board promotes the best I could, then I'd hold my head high, sign where I have to sign, and get back to living. Sassy
Well... this is how the consultation went for me... <First>List your debt from smallest $$$ amount to largest $$$ amount. Forget the interest rates for now. Let's go strictly $$$ amount. <Second>If at all possible, make the minimum payment on everyone exept smallest. Take every extra penny you can get your hands on and attack the smallest one. Do this until you have the smallest one paid-off. Then take *EVERY* penny you were sending to applying to the smallest balance and apply it to the next highest one. All the while continuing to make minimun payments on the ones above. OK, this is called the debt snowball. Paying off debt from the smallest to largest. Before I go on, as I understand you are unemployed right now (please correct me if I'm wrong) and I don't know your financial situation as far as income, so by all means just ignore me if this does'nt help. OK. <Third>If for whatever reason you are unable to make minimum payments on ALL of these accounts, do this. <Fourth>Take any cash after food, utilities, rent/mortgage, and transportation are taken care of. If there isn't much, do this... (please remember this was based on MY personal situation and by no means am I saying you should do this...unless you want to) <Fifth>Sell anything that's not glued down. Extra televisions, stereos, basically, have a yard sale. In my case, I was told to sale my truck because it was taking up most of my income. <Sixth>Any extra bills must go. i.e. cable tv, cell phones, etc. <Last>If none of this works, start back at 1. Believe it or not it worked. I did everything but sale my truck. I basically lived on bread and water and canned goods for 7 months. I had no extra bills i.e. cable, cell phone etc. My house was almost empty exept for a bed and a little furniture. Remember, this worked for ME. I don't know how this will apply to you. I worked my @$$ off to at 2 full-time jobs to pay off $27k of debt. For you, BK is looking like an option based on your employment status. This is what worked for me and at the very least, I hope this is an inspiration for you. -SLOYAROLE-
sassy, a kajillion thanks for contributing towards a better course for me through your own reflections. you're absolutely right about exercising my right to be proactive instead of reactive. you're also right that there is a time when it just doesn't serve us best to drag our feet and chastise ourselves any longer. so i will get on with getting on. on that note, could you point me in the right direction about how to challenge things with original creditors? i think i get it about the CAs, but it seems like a whole different ballgame with the OCs and i don't think i'm clear on that route yet. would i do this ONLY AFTER filing BK? if i start acting all sassy all of a sudden, don't you think their lawyers would start itching for a judgment? i'm really just barely coming out of the ostrich phase, so i want to know what kind of stuff to expect. in my finer moments, i have loved dealing with tricky situations, but i think the emotional and moral stuff has made it harder for me to really look at my situation so rationally. i have to tell you, if i can look back at this point in my life sometime in the future and see that my interest in my financial wellbeing stems from this point in my life, all this drama and sadness won't have to be for nothing. i just can't stand the idea that all of this is just for nothing, and i will just have a horrible record because of a series of not so good choices. so here is where i really start to learn, right? thanks so much for your clarity, soren
hey sloyarole, thanks for the clear explanation. that must have taken some time to type it up, and it was good to hear of a plan that worked well for someone. it's clear that a lot of hard work went into making that happen. you deserve a lot of admiration for that. i can see how that would be an excellent plan had i been in a position to do that at one point in time. i didn't realize the mess i was in until i lost my job and saw how quickly things get HUGE. sad thing is that now i don't have ANY money to attack ANY minimums. they are huge and even working with specific creditiors, they are not willing to make payments do-able for my situation, not even when i HAD my job. that's why i was curious about settling. i cut up credit cards long ago. this is all principal, plus late fees, plus overlimit fees, plus interest, plus bizarre extra nondescript fees from CAs, you get the picture. honestly, it's grown exponentially in only 5 months. scary. i have no cell phone, no cable tv; sold my stereo components already. i've been avoiding the phone completely--even from those i love. (depressed for a good long while.) i'm definitely not living high on the hog. that's not how i got into debt either, so i won't have any exempt assets if i do file BK either. honestly, right now i can't fathom using credit ever again because i have really felt knocked around, but i do know what kind of a society we live in and how the powers-that-be make credit 'required' just in order to do basic things. i just want things to be simple. i wonder if anyone can live on cash and cash only? i certainly haven't met anyone who does. would that be really detrimental to your later life, i wonder? thank you for sharing your ideas. i am going to develop a good strategy for budgeting, and i think what you've mentioned makes good sense. i'm glad it did work for you. i hope others who can use this kind of advice right now will happen upon your post to me and it will give them what they need. best wishes, soren
Hey, thanks soren, I understand how you're feeling. It's not easy being backed against a wall. It seems that you have exhausted every option to get these people to work with you. For now, make sure your essentials are being taken care of and forget about the debts right now. Just temporarily. Get yourself back on your feet, and when you do, take care of it. Statistics show that most CC companies don't sue. (I don't have the link right now, but when I find it, I'll post it) They usually charge-off and sell the account. Depending on the amount and the prestige of the banks determines this though. For now, though, they're gonna have to wait on their money. Or kiss it good-bye to BK. The ball is in you hands and they know this. Keep negotiating with them. This will stall them if they plan to sue. As far as living on cash rather than credit, I do. I learned the hard way. If i can't write a check for it, I can't afford it. BTW, You deserve alot of admiration for not wanting to take the easy way out. For wanting to actually pay your debts. -SLOYAROLE-
Here's why most creditor's won't sue...see "will they sue". http://www.ianr.unl.edu/pubs/homemgt/heg183.htm#wts
thanks, sloyarole, & wow, you do it all with cash?! i know that must be a great feat sometimes, but i think that's great to define how you want to handle it and making it happen! how will you/did you buy a house or do you plan to do so? how will you approach things like that? are there any books or resources you use to advise you in living on cash that extensively? anyway, thanks for all the input. take care, soren
hey, i can't seem to shut up now that i'm on a roll... please bear with me, all: i know that creditors are less likely to sue when the cost outweighs what they could stand to make off of me, as sloyarole's link above discussed. with some of my debts in the $6K to $14K range, i bet they would go after me, though. we're talking next card, citibank, and amex, etc., so i know they're no strangers to courtrooms... i'm wondering if creditors are equally unlikely to be amenable to negotiated settlement offers because they can make more money in writing off my bad debt than they could if they accepted my pathetic settlement offers. so, how often do charge-offs happen without judgments first? seems like judgments are fairly common these days, even for lesser amounts, when it used to be that they would balk at the costs suing would incur. is a judgment a messy situation even if BK is likely in my future? would it be best to declare and not negotiate so that my records would be less spotted before declaring or does that not matter once the BK is declared? i'm a virtual cauldron of questions. i'm almost cackling. thanks for dealing with me... soren
do you think credit card companies would be willing to settle for pennies on the dollar ? soren ================== Why not? They do it all the time with CAs!
