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What should I DO?


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Hello all,

can someone please help me.

Currently, I owned almost $17,000 in Unsecured credit cards.... all of my credit cards are current now.....but by next month, I cannot afford even the minimum payments ..

Wellsfargo $4,426

Chase $2,2317

Chase $1,221

American Express $3,483

Washington Mutual $1,984

Bestbuy $1,497

Country Wide $2,279

Orchard $300

I am going to let it go deliquent, since I cannot afford any more payments. I am thinking about settlement... but in order for me to settle, I need a large sum of money, which I don't have. Currently, I have house and someone told me in this forum that in texas, there is housestead exemtption. So I don't have to worry about them putting any liens on my property.

What do you guys think I should do?? Should I let it go to collections and try to settle with them,,, or should I try to settle before charge-off????

I estimated that by the year end, I will saved about $5,000 ($500 a month saving). Do you think this is enough to settle the $17,000.. Please help me, I don't know what to do,,,,,, I lost alot of sleep over this...... I have a mortgage payment, child supports, and alot of other bills ... . . I am working almost 80 hours a week, but it is still not enough......(For Youngsters out there reading this, PLEASE GO TO SCHOOL AND DON'T END UP LIKE ME) Hopefully, when I get all of this taken care of, I will try to get my associate in networking......

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Three years ago I got myself in some serious trouble too. First of all, don't keep kicking yourself... its the plan to keep us all in debt. But besides that, I'll tell you I did. I did refinance... and they seriously ripped me off... but it got me over a hump.

In addition to that, I let almost a $14,000 credit card bill get charged off... all from one company. Once it went to collections, I made up my own debt validation letter, which I will give a copy of to anyone interested. I'm sure the one listed on this website is enough, but I made mine from a number of sources so I wouldn't leave out anything important... I was that scared.

After I sent the letter to the first debt collection company, there was no response. About 8 months later, I think, I got a letter from a different debt collection company lawyer... sent the letter somewhat revised, and never heard from them again. A while later, I got a letter from yet another, in-state lawyer, as that was something mentioned in my letters (in order to sue you they must be licensed in your state). Still, not knowing if it would work, I sent off my debt validation letter. That was about a year and a half ago, and I haven't heard anymore in all this time.

No one WANTS to be in this position, but its deliberately engineered to get us there. Do what you have to do to protect yourself, then get rid of all credit cards so they can't do it to you again.

Also get on Google and download the 3 videos from Richard Cornforth before they disappear, and watch them. Lots of interesting and helpful info. They're called "Secrets of the Legal Industry". This was all new information, well presented, and he appears to be right. He actually teaches you HOW to do things.

In addition, the e-books you can download here are excellent sources of information and well-written. :)

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No one WANTS to be in this position, but its deliberately engineered to get us there.

JeanW - Please don't take this as an attack, but I respectfully disagree with this statement, if I understood it correctly in the first place. The availabilty of credit isn't engineered to get us in over our heads, it just happens alot. I mean, A LOT. Many of us, as consumers, don't use prudent buying, saving or investing skills, and we get caught up borrowering what is offered to us -- or that we actively seek out -- instead of just waiting till we can afford something with cash.

I've been in the same position myself as you and kingkaiko2002, twice. I'm also one of those people who thinks we need to start teaching more about personal finance at the high school or junior high (do they still call it that?) level to help stem the tide.

And kingkaiko2002 - you may want to contact each creditor individuallly to see what kind of revised payment or settlement plan they can work out with you. You may be able to salvage the relationships with at leat a few of them.

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IMHO, you've kinda got 3 choice here...

1. Can you get a second mortgage? I don't recommend trading unsecured debt (the CC's) for secured debt...but...if you get enough to pay them in full and then cut up the cards and don't do it again, it might be a good idea.

2. If not, contact the OC's and ask about their "hardship" programs. I'm pretty sure that all the cards you mentioned do have them, but, you'll have to work your way up the food chain to get past the phone jockeys to find someone who can tell you about them. Again, don't do this unless you're certain you will change you spending habits and expect your income to improve in a year or so. These programs only run for 6-12 months, and unless you're prepared, can hurt when they're over.

3. The last resort, in my mind, is to try to "settle" these accounts. You can do it on your own...and there are "debt fixers" who claim to be able to help you. (In case you don't know, a "debt fixer" is a collection agency that works our side of the street. They'll charge you a fee. They are also every bit as dishonest as the CA's...so you need to be very careful.) Either through a debt fixer or settling by yourself will wreck your credit ratings and will cost you money in income tax, but it can be done.

4. Actually, there are 4 solutions. Declare BK. With the new laws, if you're working, it would probably be a BK 13, which means you'll have to repay a portion of the debt. Your credit will be ruined, but you won't have extra income tax to worry about. If you think this might be a good idea, see a lawyer...most will give you a consultation for freee.

AND...just for the record,

...availabilty of credit isn't engineered to get us in over our heads...

true...but...the CC issuing companies are set up to keep us paying. The prime example of this is CRAP 1. They'll issue you multiple low-limit cards, expecting that you will go over the limit, and thereby get socked with fees and interest. All the others don't want customers who pay them off, they want customers who pay them interest. While we can avoid their traps, they sure make it easy for us to fall into them...

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thank you everyone... I have one more concern...

I have about 3 credits that are about to max.....

now if I let it go deliquents for about one year.. how high can it go too??

let say on one credit card I have a balance of $1890 and my limit is $2000...

if I let it go deliquent for about one year... then how high can it go??

and also,,, what percentage should I settle once it get to collections???


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now if I let it go deliquents for about one year.. how high can it go too??

All the way to having judgements on your credit reports and/or wage garnishment or leins on your house

what percentage should I settle once it get to collections???

This is by no means automatic. Being "in collections" does not mean a CC company is willing to settle for anything. They may sue...the may sell the debt to a JDB, who may sue. They may just sit on it, and let it grow in value at, say 30% per year.

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