California is Overrated Posted June 23, 2005 Report Share Posted June 23, 2005 Looking for advice:All of my credit card debts are within SOL (I'm in California, if you can't tell ) . I offer payment arrangements to settle the debt and/or DV and get no response, other than two attorneys for the OCs sued me and won. I can't afford to be sued by the other OCs, waste money on filing the answer, spend time away from work standing in line at the court clerk, the stress of court dates when in the end (based on my other two cases) they don't really seem to have to validate or prove anything. I don't have the stomach to continue with this. I assume I've been sued because I have wages to garnish and a house to put a lien on, so I expect the other OCs to follow suit. Why don't they just respond to my offers of payment??! Tell me what I'm doing wrong and how to do something right, please. Link to comment Share on other sites More sharing options...
Methuss Posted June 23, 2005 Report Share Posted June 23, 2005 They aren't responding to negotiations because they don't have to. I'm sorry to be blunt, but big-business only negotiates if they have something to loose. Unless you have some legal remedy you can take against them for FCRA violations or FDCPA violations, they generally won't negotiate.If your CC debt is totally out of hand, you may be best served by considering filing for bankruptcy before the new changes go into effect. Right now, unsecured credit card debt can be eliminated under chapter 7 rather easily. Under the new rules that go into effect in a few months, you will have to pay at least part of the unsecured debts back.Chapter 7 is not as big a deal as it may sound. If you re-affirm your loans on your house and car, they can't be sold off to pay other debts. if your car is paid off you get to exempt a certain amount of the value, which may make it not-worth-it to a creditor to try and take. Personal property like household furnishings are generally exempt from being taken, and you would only have to give up luxury items such as jewelry or collectables of value.Judgments currently against you that are for credit cards, will be wiped out by a BK7 as well. Tax liens and government backed student loans are the only kinds that really don't go away with a BK7.Sure you will be in credit Hell for about 2 years or so, but if you already have a car and house, that shouldn't be a big deal. You probably won't even want a credit card if you've gotten to this point anyways...so that's likely a non-issue. Link to comment Share on other sites More sharing options...
California is Overrated Posted June 23, 2005 Author Report Share Posted June 23, 2005 Thanks for taking the time to respond. I guess I should have added in that I've already looked into BK and I don't qualify because I have too much equity in my house. Another solution of course would be to sell the house to pay everyone off, but the thought of giving up my kids' house and putting all of us through a move just to solve a (relatively) small debt and letting the idiot CAs beat me makes my blood boil. Link to comment Share on other sites More sharing options...
Ravenous Wolf Posted June 23, 2005 Report Share Posted June 23, 2005 Just how small is your debt? Link to comment Share on other sites More sharing options...
Methuss Posted June 23, 2005 Report Share Posted June 23, 2005 If you have enough equity, take out a home-eq line to pay off the debts. The interest paid on the home equity line is tax deductable so you even get a benefit from it...lower income taxes.However, you have to have more than $75,000 in equity in your house to be disqualified for bk7. The homestead deductions are $75,000 for families and $50,000 for singles.You can get the details on the exemptions here:http://www.bankruptcyinformation.com/CA_exemp.htm Link to comment Share on other sites More sharing options...
California is Overrated Posted June 23, 2005 Author Report Share Posted June 23, 2005 Yes, I have more than 75k equity in the house. I already have a home equity loan and cannot qualify for more/increased loans, nor could I make the payments on them. The debt is 35k which is plenty hard to dig myself out of, but as my house is worth about 20 times that with how housing prices have shot up here in the years since I bought it, it seems a shame to give it up. Link to comment Share on other sites More sharing options...
LadynRed Posted June 23, 2005 Report Share Posted June 23, 2005 Ok. so you can't do a Ch 7, you CAN still do a Ch 13 and Ch 13 NOW is nothing compared to the agony it will be under the new law. Ch 13 will protect your assets and unsecured creditors will get paid at some percentage, and that is rarely 100%. So, in a way, they are FORCED to settle for, say, 25% payback and the rest gets discharged. How much you pay back to unsecured depends on the amount of your disposable income. You may wind up paying back 50%, but that's still better than wearing yourself out worrying about more lawsuits, liens, bank seizures and wage garnishment for years to come ! Link to comment Share on other sites More sharing options...
Methuss Posted June 23, 2005 Report Share Posted June 23, 2005 I find it hard to believe you can't qualify for a home-eq consolodation loan with over $75,000 worth of equity in the home...your debt to income ratio would have to be exceptionally low. You may have to refi- your current home-eq line elsewhere rather than ask for an increase in your line of credit and reduce any "luxuries" in your life (such as cable tv and going to the movies) to get results.But also keep in mind that these judgments are not going to go away and they can garnish up to 25% of your wages. One way or the other you will be paying for this and I'm sure that the P&I on a 10 year consolodation loan is going to be less than 25% of your wages would be each month.There is always a way. You may have to put up a couple hundred dollars to get an attorney to represent your interests on retainer to effectively deal with this. Placing your home into a trust is one way to protect it from creditors and tap into it's value. An attorney can advise on this better. Link to comment Share on other sites More sharing options...
California is Overrated Posted June 23, 2005 Author Report Share Posted June 23, 2005 How strange that the attorney I had a consultation with said Chapter 13 wouldn't work in my case. I'll have to call someone else.Would a Chapter 13 alter a judgement that's already been entered? P.S. I can tell you I'm not one to roll around in luxuries - just a very hard working single mom wanting to maintain mine and my kids' home. I work 2 jobs, drive a 10 year old car, don't have cable, haven't been to a movie in forever, etc. After my divorce I had to use credit to pay for groceries, gas, utility bills, etc. and it got out of hand with interest rates at 28%. Link to comment Share on other sites More sharing options...
Methuss Posted June 23, 2005 Report Share Posted June 23, 2005 I can understand that...especially in a california economy. House taxes are a bitch too from what my brother tells me.Well. I don't see how you could not qualify for a bk if your income is that tight. I mentioned the frivolities simply because I was covering the bases. No offense was meant by it...just the facts here.I take it the divorce didn't include any kind of alimony or maintenance then? If the kids are still under 18 it may be time to re-evaluate the divorce decree. It may need adjusting given the economic stress you are under.It occurred to me that you might be able to get a short reprieve to clear things up by refinancing your first mortgage as a 3/27 interest only loan where you only pay the interest for the first 3 years then it switches back to a regular amortorized loan. The amount you would pay toward principal can then be retasked to getting the debts paid off. There is a risk in this though that you must consider. If the value on the house drops below the remaining principal during the first 3 years, you would have to make up the difference to the bank on demand. If your home market is stable, then the risk is minimal. At closing the finance company will use some of the equity to pay off the judgments right then and there as you can't have any lien possibilities against the home. Link to comment Share on other sites More sharing options...
blacksurfer Posted June 24, 2005 Report Share Posted June 24, 2005 That's why it's good to talk to more than one BK lawyer. Chp. 13 might be perfect for you. You might have to pay $100 per month for five years.Re: Why don't they just respond to my offers of payment??! What type of settlement letter did you send? Did you threaten to file BK before the new laws take effect? Link to comment Share on other sites More sharing options...
California is Overrated Posted June 24, 2005 Author Report Share Posted June 24, 2005 I'll talk to a mortgage broker again. So far I've only been qualified for horrendous rates and weird programs because of my credit scores. I did end up talking to another very nice attorney yesterday - he says I could do Chapter 13 but because I have alot of equity, I would be required to pay all creditors IN FULL over 60 months, which makes for a very large monthly payment unless I do the smaller payments for now, with a promise to sell (or refinance? I guess not likely if I had a BK on my record!) within the 60 months to pay the rest of it off. I find it amusing that it costs so much to get started with BK (he went over the fees allowable by California law) - I guess its never dawned on them that people needing to declare BK are often broke?I would like to try one more settlement letter CMRRR with the one OC attorney before the CMC date comes up so I'll have further record that I'm trying to make good with them. My last letters weren't even suggesting pay for delete, how easy can I be? Can you point me to a particularly good settlement letter?Oh, and today I started at my third job - another way to try and dig myself out of this mess. What fun! Link to comment Share on other sites More sharing options...
blacksurfer Posted June 25, 2005 Report Share Posted June 25, 2005 How much equity are we talking about? Link to comment Share on other sites More sharing options...
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