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Everything posted by BackFromTheDebt

  1. This is false. He can get a second job. Defaulting/BK is not the only option. If you look at my more recent posts, I agreed with you that a second job is a good option. Look a little more carefully. He says all his money goes into an account his wife has complete control of. That is what I meant that his wife has to be in on the plan, or else this will fail. The plan could be a second job, or it could be default and settle, but he would need his wife to allow him to use the money he is earning for whatever plan he implements. If his wife has control of the money and won't agree to a plan, then the plan will fail. So far it appears his wife is willing to work with him on his issues. Solving these issues is the way to preserve the marriage.
  2. Let me elaborate a little. Settling saves you money. In cases where there is a JAMS arbitration agreement, you could drag this out for years, and use JAMS to leverage a really good settlement, sometimes even $0. That is what I did (in fact, the amount of money I got from violators was approximately equal to what I paid in settlements), but I was about $150,000 in the whole, without any way to pay off the money, and I had some debts on rental properties that were foreclosed on. I also had a larger mortgage because I had refinanced for more than the house was worth to pay off some CC debts. In my case, defaulting, settling when I had to, and fighting it out, was done out of necessity. There was a big price to pay. It destroyed my credit rating for many years. I was finally able to refinance my house a few months ago, but at a higher interest than I could've a few years earlier. Also, I was paying a higher interest rate for all those years because of my financial troubles. It also in some cases made employment difficult. I did eventually get a temporary job in the finance industry, which I left about 2 years ago, but that meant everything had to be past SOL by that time. Even so, that worked because I had no money judgments against me, and I was able to show the foreclosures did not come with money judgments. The money you could save by settling might be about $10,000, give or take a few thousand. Could be more, could be less. Also, settling takes time. It is almost like a second part-time job in the time it takes. Settling or bankruptcy MIGHT be your best option, or it might not be your best option. The suggestion to take a second, part-time job to get to where you can pay off your loans isn't a bad suggestion. If you are 100% sure you will stay in the same house for the next decade, and you will never refinance, and you will never need a credit card for the next 7 or 8 years, and if even a second job wouldn't pay off the debts in a reasonable amount of time, then default and plan your next strategy. If you COULD make enough from a part-time job to pay off the debts in a reasonable (you and your wife define reasonable) amount of time, then strongly consider that option. That is something you and your wife will have to decide. Not us.
  3. No matter what, unless your wife agrees to the plan, nothing will work out. I guess the choices are, either get a second job to pay off the debts, or else default on everything and save up enough to settle. Bankruptcy is another option, but this is a small amount to waste that on. Just be warned -- if you decide NOT to pay off the debts, and to settle instead, here is what you can expect: 1. You will never get a loan or CC from those places again. Ever. 2. Your credit score will be trashed for the next 7 1/2 years.
  4. Your first step is a debt triage. There are certain bills you MUST pay. Pay them. How much do you have left after this? Put that aside for now. Better yet, open up a bank account, and have your wife put the money into that account, in your name, but let her have control over it. The credit card debts can probably all be settled for about 25-50% of what is owed on them. You are talking about approx. $20k in credit card debt. With interest, that will go up a bit. You are talking about $6k - $12k you could use to settle these accounts. Cut down on your expenses, and see if you can save that kind of money as quickly as possible. IF there is a credit card with a low interest rate and fairly low balance, you may choose to keep that one credit card. For example, when I was in deep doo-doo I kept a USAA credit card with low interest rate, and it was worth it to me. Otherwise, stop paying on all the cards, and set aside the money for settlements. Also, check to see which cards have arbitration agreements. You can probably settle those for a lot less. I settled all the cards with arbitration agreements for $0. I think Credit one has an arbitration agreement. You need to check on that. Bankruptcy is a possibility, but that is more of a last resort. In the meantime, you need to stop gambling. Do whatever you need to do. If that means giving all the money for your wife to handle, do so. If you gamble away your settlement money, you are stuck with ONLY bankruptcy as an option, and you won't have the option again for a long time afterwards. When I was in a bad situation, I bought a device with caller ID that would block certain phone numbers. You may need something like that later on. As long as the debt is with the OC, they will ring the phone off the hook until you talk to them, then they don't bother you for a few weeks. YMMV. By stopping paying ALL the bills, and setting aside as much money as possible, you are buying yourself at least a few months, maybe the rest of the year or longer, to figure out your next strategy. A lot of your next strategy depends on how much money you can save.
  5. Recall that the estimate I gave was an estimate for: Over a decade This site, the "other" site, and various unnamed sites that spread some of the information. There was probably a LOT more money saved by debtors in the few years from 2008 or so than in the past few years. That money is included in the total estimate. So is money saved by people who never posted here for advice, but read up on what others were doing. Or attorneys learned the techniques and used them for their clients. I think my estimate of 10-100 million saved in a period of more than a decade is not far off the mark. Again, it would only have to be $1 million per year. There are reasons why the business models have changed. Some of that is because they were getting killed by chain-of-custody arguments, by arbitration, by FDCPA and FCRA and state laws, etc. Looking at over 15 years, I would guess that most of the money was probably money from defaults around 2007-2010.
  6. I don't feel virtuous having walked away from about $150 k in personal debt, plus other debt from properties which were foreclosed upon. It brought me a huge relief. It allowed me to sleep better at night. It may have saved my marriage and kept a roof over our heads. It gave us a chance to get back on our feet. We still have a lot of extra mortgage debt from when we refinanced to pay off earlier CC debts. After all these years, we owe more money on the house than we did when we bought it in 2002. In that sense, I felt virtuous, in that the choices I made did some good for the family, and we have mostly avoided the traps we were in earlier. Since in those days illegal debt collection practices were more common, in a way I feel virtuous about defeating banks that either used illegal practices against us, or else hired the sleaziest CAs and attorneys around to go after us. Some of the things they did still get me angry. It was nice to make the bad guys pay, even if it was my default that got us into the mess. It is nice that I came out ahead when faced with bullies. Which is what some of these OCs and CAs were. What about the banks that did NOT use illegal collection practices, and still lost money? I don't feel great about that, but hey, they made a business decision and I made a business decision. My business decision is a drop in the bucket for them, but meant a great deal to me and my family.
  7. Are JDBs legitimate businesses? The CA and JDB business models are legitimate. That being said, some of them operate outside the law. Fewer than in the past, though. Back in the old days, I would deal with firms like Mitchell N, Kay from NYC and the Buffalo operations. They were NOT legitimate businesses by any means. The former NY AG, Andrew Cuomo (now Governor Cuomo) put a stop to much of that. (*) The abuses I put up with from those firms gave me a few thousand, and probably led to some OCs walking away from debts in arbitration. Do I feel bad about that? HECK no. In those days, their business model was to use companies which regularly violated the laws. Any bank that lost money from that deserved to lose the money. If violating my rights was part of their business plan, then they had to consider in their accounting the money they would lose in the rare cases they were called on it. Just business, baby. Nothing personal. (*) For New York readers, this is NOT a political endorsement of Mr. Cuomo. I am sure both he and his primary opponent, Ms. Nixon, are wonderful people. As far as arbitration, whether or not it is a loophole? In the old days, there was the NAF rubber stamp scam. That means, they would take you to arbitration, pay almost nothing, win almost 100% of the time, and that was that. Arbitration was great for the banks. They had a cheap way of collecting debts, AND they could get rid of class action suits. Arbitration is a double edged sword. It can be used as a weapon to ward off the class action suits, with the price being the high cost of consumer arbitration. I don't feel bad for the banks, nor the JDBs, for the costs and losses of arbitration. It's just business. The money they lose due to arbitration is factored in by people who are really good at math. The banks are willing to pay the price to keep arbitration. As for the JDBs, the very small percentage of consumers who walk due to arbitration is part of the small cost of buying the debt. It is considered as part of the price. Also, they spend less money in states with pro-consumer laws than they do in states with pro-creditor laws. Just business. In the old days, sometimes I could get creditors, even large OC banks, to walk away due to lack of proper accounting. Don't count on that anymore. That was them being bitten by their business decisions. At some point, talking about what is or is not a loophole gets a little silly. It's just everyone playing their cards. Me walking away from lots of debt was not free. It cost me big time in lower credit scores, and not being able to refinance my house until recently. It was a business decision I made at the time. I was in way over my head, with no way out. I kept borrowing money to pay off debts, and that just made my debts a lot bigger. Defaulting on my debts was the only way to get myself and my family back on our feet. Call it a loophole, call it a bug in their scheme to screw us over by taking away class action lawsuits, call it a business decision, call it hoisting them on their own petards, call it a to-MAY-to or call it a to-MAH-to. When it works, it's great.
  8. I think you are seriously underestimating the amounts of money involved. These sites have been around for over a decade. During that time was the great crash of 2008. It has been estimated by people far more knowledgeable than you or I that the 2008 financial crises wiped out over $10 trillion in the year 2008 alone. That doesn't account for the massive credit card defaults in 2009 and later. That involved quite a few billions of dollars. My estimate of $10 million to $100 million due to the impact of these sites is a drop in the bucket. Realize that these sites have been around for over a decade. Also, realize that not everyone posts on these sites. Also, realize that some consumer attorneys use the knowledge from these sites. I have first-hand knowledge of this. In order for my estimate to be correct, if people using the knowledge from these sites have wiped out even an average of $1 million per year, that would be well within the range of my estimates. Consider, that is not just arbitration, but fighting JDBs in court back in the days when they couldn't prove they owned the debt. That includes negotiating strategies from these sites (those strategies personally saved me a few thousand dollars). It includes suing over FDCPA and FCRA violations. (I got a few thousand that way, too.) It includes strategies for dealing with mortgages with bad paper trails. In includes using DV letters to get rid of creditors who couldn't prove the debts (about half of my estimated $150,000 came from that. Just playing whack-a-mole with DVs until they went away.) I am including situations in which JDBs or attorneys decided not to sue because of someone on the Web Recon list. I have no idea how much money being on the list may have saved me. I do know of one case in which a law firm dropped a case when they realized who I was. Nor am I just including this site and the "other"site. One can find many of these techniques, esp. the negotiating techniques, on many, many sites on the internet. Now, my state is neither particularly big nor particularly small, neither unusually rich nor unusually poor. If I know of $1 million in debt wiped out in one state with just three people, plus I met a consumer attorney who has used these techniques for his other clients, it is reasonable that there may be several millions of dollars wiped out in this one state. Plenty of people have posted on these forums from my state. Multiply that by 50 states, and my estimate of tens of millions and probably over $100 million is not out of line. Credit card defaults are in the range of billions per year on the average during the past decade or so. I am suggesting a small fraction of a percent of all this money has been wiped out due to techniques from these sites. Some of it from negotiation, some from fighting in court, some from arbitration, some from fighting back against violators, and so on.
  9. You are very seriously underestimating things. I think the amount of money lost by OCs, CAs, JDBs and attorneys combined -- due to this site and that other site -- is easily in the tens of millions or higher. Very likely over 100 million. The other site has recorded wins, adding up over a million. That number is way out of date and doesn't include a lot of money where there were NDAs. That is the tip of the iceberg. Nor does it include money due to THIS site. I never dealt with JDBs. I did wipe out a low six figure debt to OCs because of advice mostly from this site, partly from the other site, and also some PMs and phone calls and faxes and stuff with people who posted on these sites. And I picked up a few thousand from violations. I am just one person. I know others who wiped out six figure debts as well. I could come up with three people I know in my state who wiped out combined debts of probably over $1 million. My approx. $150k was the lowest of the three of us. If you add in the attorney fees, it gets even higher.
  10. True, but the collection agency has SOME leeway. The best settlement I negotiated outside of arbitration was before the account was charged off. That window is passed. With a collection agency, it is still often possible to negotiate a good settlement.
  11. @WhoCares1000 has a point. If you file for BK before the judgment, that pretty much stops everything. The case is generally suspended while the BK proceeds. There is a case to be made that filing earlier is better, since that starts the clock sooner. Also, in SOME situations it can be better not to have a judgment against you.
  12. What you have for the time being is a game of whack-a-mole with the collection agencies. Fun while it lasts, but, at some point Citi will probably get tired of the game and send this off to an attorney. Depending on the circumstances, it may be wise to negotiate a settlement at some point, especially if you find a CA that actually does validate the debt. SOME collection agencies get desperate around the end of the month, and one could get a decent settlement. For others, it won't work. It's a crap shoot. When did this debt go into default?
  13. The above advice is good. Make sure you (a) keep copies of everything you send and (b) make sure you send everything CMRRR. One last thing -- 60 days seems like a long time, but it isn't. All sorts of things can go wrong. Get this done as soon as possible. If you get things done quickly enough, you can also show the court the forms you get from JAMS confirming you initiated the case. The more you have, and the earlier you have it, the better. If you get everything you need to the magistrate well before the deadline, you will probably win this one.
  14. On top of that, you should call Midland and explain your medical situation, and see if they will agree to drop the case. They may need verification.
  15. I looked up the JC Penney credit card account. It is Synchronicity. @Smitten27 It is too bad you didn't post BEFORE you answered the suit. You may have messed up your case a bit. Hopefully you can fix things. First of all, the court doesn't care about the settlement. If they never sent you a letter, or if it got lost in the mail, or whatever, you never had the settlement. So putting that in your answer was a mistake. Worse, the judge may see that as you admitting you owe the debt. The court doesn't give a rat's behind about your settlement talks. If you admitted to the debt in your answer, you will almost certainly lose the case. The judge will rule against you, and you will have to pay everything. There MAY still be a way to get rid of them. You can file a Motion to Compel arbitration in the court. Make sure you do that long before the court hearing date. There is a lot of information on that here. This might still work, or it might not. Why? Because Midland doesn't want to mess with arbitration. It costs them far more money than they could get from you. If you can get this into arbitration, they will probably abandon it, and you can walk away with paying nothing. The problem is, if you admitted the debt in your answer, then the judge may just deny you the arbitration and rule against you. I honestly don't know what will happen.
  16. Ouch. So it might work and it might not work. Of course, the goodwill method would be best, IF it works.
  17. A judgment in Texas is not as bad as some other places. They can't garnish your wages, as @Clydesmom pointed out. However, it is better if they do NOT get a judgment. Texas is a community property state, meaning if they get a judgment against your wife, they can go after you, and the judgments last a very long time. If you ever move to another state, they can domesticate the judgment and garnish your wages, if any. I mean, you are probably pretty much judgment proof. I will send you some information in a PM to learn what you need to know about being judgment proof. I think the motion I mentioned earlier is a Motion to Intervene. Roughly speaking, that makes you a party to the case, and you can be the one to speak in court, etc. Any paperwork you can do and have your wife sign it. If there is any reluctance for them to drop the case, and if there is an arbitration clause you can use, I would recommend filing in arbitration, and filing an MTC with the court. That would get rid of Midland forever on this case. Who is the original creditor?
  18. Contacting their attorney to see if they will drop the case for medical hardship is a fantastic idea. Just in case, the OP needs a Plan B. IF the credit card agreement allows it, there is a very strong case to be made for filing an MTC, and to see if some attorney in your area would drop by in court for her pro bono. If not, then the OP should file a motion to be included as a defendant. I forget what this motion is called. I have seen posts here in the past where people did that so they could argue the case for their wives in court. If they honor their medical commitment, the OP is in better shape. If not, in many states (don't know about Texas) he could represent her in arbitration. There is nothing in the arbitration rules that prevent that. In fact, I represented my wife in arbitration once, and I beat one of the very nastiest credit card companies that way. I know something of what you are going through. I won't go into the details, but then cancer has touched the lives of many of us.
  19. For one thing, arbitration would buy you a few months. That will give you time to graduate and to get some money saved up.
  20. Synchronicity allows you to use arbitration even in small claims court cases. I can't tell you what to do about arbitration, Here are your options, though. 1. Surrender, let them get a default judgment. (Worst option). Then you are on the hook for everything. Sometimes you can negotiate a settlement post-judgment, but not usually a very good one. If you can pay a big chunk of it now, rather than dribble out in $ taken out of your paycheck, they will usually cut you some slack. 2. Fight the case in court. You will almost certainly lose. Then you are on the hook for everything, UNLESS you were able to negotiate before the judgment. You may or may not be able to get a better result than in #1. 3. Take it to arbitration. At this point it costs them more $$$$$$$ to fight it than they could get from you. They might fight to the bitter end, then you are in the same position as above, only it takes longer. 3.a SOMETIMES they walk away from it, and don't pursue in arbitration. Most of the time they won't, but sometimes you get lucky. I've had that happen with an OC, once, but that was a special case where there were a ton of counterclaims and things weren't looking that good for them. 3. b. OFTEN they are willing to negotiate at the very beginning. I have had that happen as well. Because of some violations, I got a better deal than what you could probably get, but you might be able to get a better deal this way than with #1 or #2 3. c. OFTEN they will fight for a while, and give in to your settlement offer later on in the course of the arbitration. This has happened to me as well. I had to fight it out forever, and it looked like they would NEVER agree to a settlement, but they did. For various reasons involving things either the OC or the attorney did to mess up the case before arbitration, I got what is probably a much better deal than what you could get. 3. d. SOMETIMES you have valid counterclaims. If this happens, you can OFTEN get a better settlement than if there were no counterclaims. I gather they are less scared of counterclaims now than in the past. Pity. I got some really good settlements with counterclaims, including one where I was the one who got $$$$, not them. 3. e. SOMETIMES they will just fight it out to the bitter end to teach you a lesson, and to discourage people from arbitration. This happens. If it does, you are in about the same boat as if you fought it in court, but anywhere from a few months to more than a year down the road. This can buy you some time to get some money together.
  21. How much is the debt for? OCs are much more likely to arbitrate than JDB, that is absolutely true. And they are much more likely to arbitrate than they used to. However, arbitration is often used as a way to get them to settle the debt for less money than usual. The bills keep piling up and at some point SOME of them will cut their losses and agree to a decent settlement. There are several times when they are more willing to settle. The first time is between the time they get the first bill and when they pay the first bill. SOMETIMES OCs walk away from arbitration, but don't count on it. Weird stuff happens in arbitration. There are things that supposedly never happen, but then they happen. We can't tell you what will happen in your case. This is gambling. You need to get the odds as favorable to you as possible, then roll the dice.
  22. At this point just send a DV letter. Whether you mention arbitration is up to you. Keep it short and simple. Such as: Dear whatever, I dispute this debt and demand validation. [I elect arbitration for all disputes arising from this account] Yours, You The part in [] is optional. Print that out, make a copy for yourself, go to the post office and send it out CMRRR ASAP.
  23. Actually, this is looking a lot better for you for two reasons: 1. If $6000 is over the small claims limit, you should be able to get this into arbitration. AAA is not as good as JAMS, but it is better than no arbitration. 2. If this is owned by Midland, well, Midland has a reputation for not liking arbitration. There are no guarantees. You might get this into arbitration and Midland might decide to still fight it out. You never know. If this is their initial contact, you have the right within 30 days to send a DV (Demand for Validation) letter. Until they answer the letter, they cannot do anything. I would suggest waiting about 3 weeks after the first letter is sent, and then sending a DV letter. That will buy you some time while you investigate your options, and learn about arbitration. There is a lot of information on this forum about arbitration. You can also go to the AAA web site and learn how to file. Long story short -- with the new information you presented, your case went from an almost certain loss to a strong chance at complete victory. Step 1: Take a long, deep breath, and realize you are in a better situation than you thought you were. Step 2: Prepare a SHORT DV letter. Send it out CMRRR about 3 weeks after you received your initial letter. Relax and sleep well at nights, knowing your are not completely ******. Step 3: Learn what you can about arbitration. Read up on it, and ask questions when you are confused. You will get confused. That is expected. Steps 4 and later you can plan out later.
  24. The game has changed now. It is POSSIBLE that they would accept the same settlement offer now. There are certain situations that suddenly make things a lot more expensive for them. SOMETIMES in certain windows, such as between the time they get the bill for the 3-arbitrator panel and when they pay it, they are more willing to accept a settlement offer. I had a case in which the OC accepted a settlement offer right before a hearing they had rejected earlier, for example.