What to Do!

[PDIDY68]

Okay I am going to spill it out.

I live in NYC. I can say I had a nice income last year. I am married and have four children. So you can imagine the bills. About a year ago I was let go due to no budget(I am a computer consultant) but was able to find another contract. Though the money is not the same its still above average. Here is the issue. I have about 13...yep 13 cc!! 2 car loans(which one is fully paid next month) and a business amex. all totaling about 30k. The bulk of it is Capone 10.9k and Providian 6k with the rest averaging 300 to 2k. Over the last couple of months unexpected financial issues have come up, me being a consultant either u buy a high health insurance policy or pay out of pocket, so I did the latter.. with 4 kids i should have done the other. Well anyway i have gotten behind on my CCs and like all good CC companies the phone started to ring. Night and day. I was so confused I call MMI to start a DMP. Well I have everything set up and my first payment goes in next month. I have done some research and know that these DMP charge a fee for their services. I have a contract or an agreement stating that all my CCs will be paid off by 2008 and the monthly payment will be 754 a month. They gave me in writing their fee, which is approx. 2500.00 total(35 a month) when the payment plan is finished. They were very up front with me when I ask them if they have a relationship with the CC. they told me yes, but they do work for us to in trying to get us out of debt.

Today I recieved a call from Cap One stating that they do not have to participate in this DMP. My balance like I said is 10.9k with about 1.2k in late fees and other finance charges. They caught my wife on the phone after they called my inlaws which live down stairs. The Collection agent which worked for I believe CMA or NMA representing Capone said I needed to pay half by june 21st. My wife said if i had that we wouldnt be talking. So then the wife got upset and they put her on hold and talked to cap one and said we can take a payment of 3500 to bring the account back to normal then we would accept the DMP. My wife agreed(we can do 3500, it will hurt but we will find a way) I called MMI after that and they told me they were shocked that CAP ONE is one of thier biggest creditors they work with. If I were you I wouldnt have picked up the phone. So I told them what do I do now. They were very honest and said do what you have to do if you want to pay it send us an updated bill after the fact so we can adjust your payment plan. So now it got me thinking, What are the chances of negoiating with the CCs instead of going thru MMI. These are the Bills:

CAPONE 10.9k-past due 3 months

CAPONE1k-1 month past due

CAPONE300-1 month past due

CAPONE 1K-1 month past due

CAPONE Business 600

PROVIDIAN 6k-past due 3 months

CHASE 2.5k-past due 3 months

SEARS 2.7k-past due 2 months

JC PENNY 700-past due 1 month

FIRST PREMIER 700-past due 1 month

DELL 1.5k

Also I had an AMEX business account that has been in collections for almost a year. Recently I have gotten letters from a law firm RUBIN and COHEN stating for me to contact them. I owe 3.7k plus interest. Can they really charge interest.......Sorry to blah blah blah so much but this is all of it.......

And I rent, I don't own a home.....

Thanks for listening..to my babble

[willingtocope]

Okay, been there, done most of that, got the T-shirt...

First, who's MMI? Doesn't really matter because they're probably lying to you. NO DMP PROGRAM DOES ANYTHING YOU CAN'T. Cancel them. Most are scams. Even the few (very few) that aren't, don't work unless ALL your creditors play along. Apparently, regardless of what they told you, Crap 1 don't play that tune.

So...what's to do?

Well...the first problem is AMEX. They'll throw you into "universal default". When we missed a couple payments on our AMEX business line, the cancelled all our cards...Gold, Blue, Optima, even our personal Gold. And once they show up as canceled on your CRs, the others start the jacked up interest, penalty stuff.

I didn't take the time to total it all, but I'm guessing your around $30-35k in unsecured debt? Your best answer would be to get an single unsecured loan to pay them all off in one stroke. With AMEX past due a year, that will be tough, but that's the first thing I'd try.

Your major problem is that when your creditors look at your credit report, they smell money. They're going to get as much of it as they can. Pay one, and that will just set off a feeding frenzy with the others. But, if you can spare $3500, pay the small ones off and get them out of the mix. If you can get yourself back to perhaps Crap 1 and AMEX, you might be able to talk to them about their hardship programs.

Last resort...BK...and it sounds like you might get stuck with a BK 13. Not great, but your credit is already trashed, so if you're sure your income will at least hold at its current level, it might be your only choice.

[PDIDY68]

Well My situation has improved. I have gotten the funds to pay the CAP ONE the minimum of 1.6k They still are calling me stating about the 3.5k I "promised to pay" My wife has confronted them plenty of times saying the account is up to date why are you harrassing us" The would put her on hold for 15 minutes and then get disconnected. I have paid the rest of cc, so they are up to date and now is the tough part. With all my credit cards current, should I stick with the DMP, which you all are probablly yelling out NO NO NO like the crazed people on the price is right or should I continue to make the min. payment with the cc, and try to work out a deal??

My Question on the side is: If CAP ONE through their collection AGENCY RMA which by the way has the same number as CAPONE(in house collections) wants 3,500 to bring the account up to date, they do this over the phone, and my wife gives them all the bank info(she was a little rattled) and then I pay off the minimum to bring the account up to date, from the statement which came 2 days before this call. They wound up trying to cash the check and it bounced(I knew it would) Can they come after me, even though the account is now up to date, This CAP ONE people call and call and call. They have called other people I know. I know they must stop for 7 days to call other people you know, But when we come home at night I see 10 calls on the caller id, with not one message. Does this border on harrassment? Sorry to go on and on.......

[willingtocope]

"Again, I suggest you cancel the DMP", he said quietly and sternly. "They obviously aren't solving your problems and may be making things worse"

They're not helping and in the long run will do more damage to your credit that has already taken place.

RMA is a collection agency. They may be contracted to Crap 1, but they're still collectors. As in house collectors they may have a little more leeway under the FDCPA (honestly, I'm not sure of that) but...YOU CAN'T TRUST ANYWAY A CA TELLS YOU ON THE PHONE. Get everything in writing. If you have any letters from these people, send them a DV letter CMRRR with a "all further contact should be in writing" sentence. You should probably also call Crap 1 directly and make sure that what you've paid actually got credited to your account. If it went through RMA, they may not have sent the funds on.

You really only have two choices here:

1). contact each OC personally, ask for the "hardship" program and see what you can work out. Most will work with you, but its under the expectation that you'll get better terms for a year or so, and then you'll be back to normal. They probably won't reduce the amount you owe...but they may back off some interest and penalties. Don't talk to any CA's...they won't help. Call the original creditors.

b.) look into BK. talk with an attorney to see what your options are. You might qualify for a Chap 7, but most likely, since you do have some income, you'd probably be stuck with a Chap 13.

The first choice will further ding your credit...the second choice will seriously ding your credit...but your credit is already damaged, and its just a matter of how much farther you let it go.