Behind in credit card payments--what to do?

[cocotel]

Hi,

I was sent over to this site from a member of the MyFico forums. Here is my situation. Husband and I are several months behind in our credit card payments...between one month and three months, depending on the card.

Our cards are--

Providian/Wamu (we each have one, mine is over $18,000 and his is over $10,000)

Chase (One for Circuit City for $2000 and one for Chase Disney for $2500)

Wells Fargo (For around $2600)

Capital One (For around $4000)

We fell behind several months back and called creditors to ask for reduced payments to help us catch up. We were also behind in our mortgage which obviously needs to come first. Providian said their hardship program was only for three months, no longer. As of now, Providian wants over $3000 minimun payment with high interest, over limit and late fees. Got a letter a few days ago from them saying they were now authorized to accept a 60% settlement.

Wells Fargo told me when I called them that they don't really have a hardship program.

Capital One took partial payments but wouldn't really budge otherwise.

Chase didn't offer any solutions.

I went to the United Way's consumer credit counseling appointment last month. To enter their program we would have to pay them a little over $1000 a month. I DO NOT have that now and cannot afford it. The more I read about CCCS the more I think we should stay away from that.

I would like to deal with this myself but do not know what to do. If I could get my creditors to take a grealty reduced monthly payment with reduced interest and no late or over the limit fees for about one year, we would be able to catch up. Can anyone tell me if this is possible? I don't want to do BK at all. I have no 401K to borrow from and certainly can't borrow from friends or relatives. They are worse off than me. I am not trying to get out of paying the creditors. We spent the money and we know we owe it. But, we will never be able to catch up with the outrageous interest and other fees. I have read and read and read the info here but I am still confused. Please, if anyone can give me some sound advice I would greatly appreciate it. Thank you.

[willingtocope]

Welcome...we'll try to help, but, I'm guessing you're looking at about $40,000 in CC debt. There just isn't an easy way out of that.

First, I'd suggestt you go talk with a couple of BK lawyers...most will give you a free consultation. Learn what your options are. You don't have to sign on, but you do need to see what type (BK 7 or BK 13) you'd qualify for.

If you have any income over the poverty level for your area, it would be a BK 13, which means everyone would get paid back pretty much, but you'd have the BK court to make them play nice.

Your other option at this point is to stop paying CCs completely. Pay your mortgage, car, food, insurance...and put the rest in a bank. The CC will start hassling you big time...and then they'll turn it over to collectors who will hassle even more. You can use the DV process against the CAs, but eventually, you'll have to settle with the OCs. Most will want large lump sum payoffs. Some may sue. Like I said, it ain't easy.

[hiblues]

What is the reason for the late pays?

Did someone lose a job?

If not

Having an account go to collection is absolutely the worst thing that can happen to a regular account and should be avoided at all costs.

If you are currently seriously past due on an account, meaning you have already received many notices in the mail, believe me the OC is a far better entity to deal with than the CA. Call the OC right now and do your best to have the account NOT go to collections. When you call, immediately ask to talk to a supervisor (don’t even bother talking to a low level customer service rep) and plead your case and make payment arrangements. If you don’t get the desired result ask to speak to his/her manager, keep going up the management ladder until you get what you want.

Many times when an account goes to collection you end up with 2 negative TL’s on your CR’s, one from the OC and one from the CA. If you don’t pay the CA, than you may be sued and a judgment ordered against you. Now that one single account could possibly have 3 negative TL’s. Again, don’t let it go this far, if at all possible.

Edit: Send a letter to the CEO if necessary!

CAs are known to say anything to get you to pay, so believe me when I tell you, DON’T ALLOW ANY MORE ACCOUNTS OR DEBTS GO TO COLLECTIONS.

Maybe you need to consider getting a roommate and

obviously you need to get a budget. What expenses are

not necessary? Cable? Espresso? An extra car? I don't know.

JM2C's

[someonesomewhere]

Hi cocotel,

Read thru the stickys in the BK forum.

http://www.debt-consolidation-credit-repair-service.com/forums/forumdisplay.php?f=183

This one indicates the means test in the BK reform act might well be a paper tiger. Bottomline, you might still qualify for a BK7 which wipes out all the debt.

http://www.debt-consolidation-credit-repair-service.com/forums/showthread.php?t=263411

How much equity do you have in your home? I know on MyFico you said you had tried and failed to get a refin to pay off your debts. If you have enough equity, another option might be to pay your mortgage, utilities, food and other essentials, let the CCs go late, and in a year or two they might be more amenable to settling. But with $40K in debts, you would probably need a good $25K or more in equity to swing it in a year or two.

VA has a much shorter SOL than most. 3 years for oral and open accounts. 6 years for written and promissory notes. CCs are almost always open accounts. I will warn you that Cap 1 has a reputation for suing within 6 months of SOL.

http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml

Short of some big windfall, little is going to change in the next week or so. Take a little time, read, meet with a BK attorney or two. Find out your options. Before meeting with a BK attorney, be sure to read this.

http://www.debt-consolidation-credit-repair-service.com/forums/showthread.php?t=257520

Virginia is a OPS for the recording of phone calls. If you go the route of just stop paying CCs, you can record your phone calls without telling the CAs you are recording. That increases the likelihood they will violate the law by making threats. Every time they violate the law, that's a $1,000 fine you can use as leverage to negotiate with CAs and OCs.

Whole different crowd over here, huh?