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Starting Debt Settlement - My Story


todd
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Hello Everyone,

I spoke with Kristy this am after learning about her from another source. Wanted to say thanks for your time Kristy, I appreciate it.

I thought I would post on the board to keep a record of where I am at with my situation and also gain help from others and hopefully help others in the same situation as myself.

Long story short, I have one house going into foreclosure (tried short selling, bank wouldnt accept), I have another house I will be trying to short sell and will let it foreclose if they dont accept (the bank was WAMU btw, worst experience in customer service I have ever dealt with). I have some credit card debt as well.

Prior to all of this I had excellent credit, always paid on time since I was 18 or so and had a credit score of almost 800. With the housing problem going on I got in way over my head and thus it all started with that. Anyway on to the credit card debt.

I have debt with WAMU (this is current as of right now still making payments on it but will probably stop soon), CITI 12k of debt, late on payments and Discover 4k of debt , late on payments. I also have a line of credit with BOA for 47k approx that I am one month late on and another card with BOA for 5k that I am late one month on as well.

So it goes as follows:

Citi - 12k Very late on payments

Discover 4k Very late on payments

WAMU 3k approx - current on payments but ready to stop paying

BOA - 47k approx - one month late on payments

BOA - 5k - one month late on payments

Quick rundown as to what has happened thus far. As mentioned I had awesome credit, took a chance bought some homes, market crashed and I am throwing good money after bad, time to start over and rebuild my credit/financial life.

Discover card barely called me I just stopped answering the phone and they sent me something in the mail offering 50% and they would be happy. I didnt respond.

Citi called me quite a bit and I know it has gone to collections or some other agency because they are getting very rude and making accusations and said they were filing a judgement against me. I said I wanted all correspondence in writing from here on out and they really didnt budge much (havent sent them a letter yet). They also mentioned that I would be receiving something in the mail ( a judgement and as I write this I just went and checked the mail and I did receive a mail from them, they are a collection agency).. Meanwhile yesterday I received something from Citi saying they wanted to lower my debt to 4500 approx and call it good. So i knew this CA was bluffing.

BOA I only receive some calls here and there, its too early in the game for much to happen.

Now - my situation. IF i had extra money I think I would have settled with discover and citi, just taken the lesser payment and done it BUT I dont have extra money right now being in the situation I am in.

So I just received a letter from:

Client Services INC

3451 Harry Truman Blvd

St Charles, MO 63301-4047

It says my account was placed with them for payment in full etc and they are a professional debt collection agency.

My question to anyone knowledgeable is what do I do now? It says on the bottom of this that I have 30 days to dispute the validity of the debt etc. So I am guessing at this point I send in a debt validation letter. Is this the correct first thing to do?

I wanted to post here to learn from others who are knowledgeable and also keep a journal of what I did and am doing as this "story" unfolds. I never wanted to be in "this" situation but honestly I am not really that afraid. I know that they can be beat and I am glad to have found Kristy and so many others on this forum. I realize that "s**t" happens sometimes and my financial decision of buying a few houses for investment properties didnt work out, I know I am not the only one this happened to in the US.

I thank anyone in advance for the guidance and I hope others can read this as I update it and learn from it.

Thanks once again,

Todd

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Todd, I can empathize w/ you. Buying a house that i couldn't afford bought me to horrible situation right now. I can see one of my co-workers going thru this too although denying anything is wrong. He is adding CC debt at a 10k a yr clip just to keep current with his upside down mortgage. I am at the point of trying to stop the financial hemorrhaging, I just wish I would have gotten to this point last year instead of adding on an extra 30k in CC debt and draining my 401k to make mortgage payments.

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Nathan,

I HEAR you. I bought some investment properties and the market fell out of bed hard here and I owe much more then they are worth. On one of them I even put down 60k and its still under water by 30k, se la vie my friend. I think (for me at least) there is a point where I had to say "OK, enough throwing good money after bad," because how much of a hole can one keep digging? The answer is actually, quite a deep hole, lol. So yes, I agree with you at somepoint you have to throw in the towel or figure out a way to stop the bleeding. For me this is what is happening now, time to deal with this, and start OVER again, I am thinking of how great it feels when this is all over with. I hope some knowledgeable people chime in on this thread and so we can all learn from it. I plan on chronicaling what I am doing and have done from start to finish. I just printed out my debt validation letter and am getting ready to send it once I hear that this indeed is the right thing to do. Nathan, I know we arent the only ones in this boat, so I am thankful I can learn from it and move on!

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In the future I think I can get the money to settle when the time is right and the debts are low enough.. BK seems like the WORST thing a person could do in this situation. I am open to all comments and suggestions but honestly bingo that seems like the last route.

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Why do you think it's the worse thing to do?

You have about $70K in cc debt plus, the deficiency balance from the mortgages. You think you can get the money sometime in the future. Honestly, you have no plan. You're just hoping.

I'd just say don't waste time on a pie in the sky sort of outlook. I filed bk 3 years ago on $71K worth of cc debt and immediately rebuilt my financial life. My income is 40% higher today than 3 years ago without the hassle of dealing with collection agencies and fending off lawsuits.

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  • 1 month later...

Ok, I posted toward the end of september in regards to a CA getting ahold of me and sending me their lil letters saying I owe them etc.

What I did was send a letter of validation to them and I never heard back from them.

Today in the mail I received a letter from a law firm located in my state that basically says I owe the credit card company money, I have 30 days to dispute the debt and if disputed they will send me a copy showing I owe the debt etc.

So this is my question. Have the stakes been ramped up here a bit since its a law firm now or? I am guessing that my letter of validation stopped the first CA since they couldnt legally do anything and maybe they hired this attorney law firm or (any one else might know better then myself.)

Another question is do I send this law firm a letter of validation like I sent the CA? - since they are not the original bank who I have the debt through are they like a CA and cannot collect on the debt?

Any help/comments from people in the know would be greatly appreciated. I am trying to keep a log of what is happening in this experience so I can help and educate others as well.

I have had some other small debt sent to CA's and I sent letters to validate as well, so my story hasnt changed too much as of yet only the fact that I received the mail from the law office today.

All input is greatly appreciated!

Todd

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Just an update (doesnt look like anyone is reading this or has any helpful advice so I may stop posting all together..)

I spoke with Bud Hibbs on the phone. Honestly the guy was not helpful at all, basically told me that my credit will be screwed up for a LONG time and that I am screwed. They will sue me and win and there isnt much I can do about it, and that what I owe right now will probably double or worse.

I expected more from the guy, at least to be helpful but he is one of the people you call that is pretty rude, acted like he knew everything (he may, I have no idea) and offered no advice besides "your screwed.."

This will probably be my last post since no one seems to be reading this. I am speaking with some lawyers today and also have an option of someone that has been very helpful up to this point, I may use his services and continue dealing with these ppl on my own - with his material.

I thought it would be helpful to someone out there in this same situation in regards to my posting but I guess I thought wrong.

I wish everyone the best,

Todd

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Todd, So are u getting any settlement offers from these CC companies or did u have to bring the matter up. I am now going on 2 months late w/ all my credit cards and so far the letters haven't been threatening. Just a "did you forget to make a payment" type letter.

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Hi Nathan

You will get that for a few months and then a bunch of calls. Yes I did get some offers to settle for less but didnt have the money at the time to settle. It went to a collection agency and I sent the collection agency a letter of validation and I never heard from them again. Then I just got a letter from a law office from the state I live in (reason being Citi is hiring them to get their money) That is what happens if I understand correctly, they send it to an internal type collection agency and if they cant collect it goes to another. The debt hasnt been charged off yet by Citi and I dont know if it will be. Basically what may happen is this law office will sue me because I think they CAN validate the debt. IF it was a third party CA then I would have a good shot but since its not charged off yet, probably going to get sued.

Time to claim BK possibly or if I get some money soon I can negotiate with them. Talking to a BK lawyer on Thursday.

Thanks for posting your the only out there that seems to be watching this unfold. I am probably done posting here as no one seems to be chiming in with any help/suggestions/experiences.

Later

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Hey Todd don't get bummed out just yet!! I can't really give you any advice on your situation, because I am new to all of this. But I think if you try posting something in the credit repair forum or maybe ask some questions in the Lawyers forum on this sight that might help you get more answers.

I am thinking that the lawyers that contacted you might just be another collection agaency, but I'm not sure. There are many collection agencies that send out letters saying that it is a law firm. I have rec. some and never did anything about it and didn't get sued. BUT that was onlt my experience. I cannot say if it will be the same for you. I would though check in the other forums for more advice before moving on.

Good luck to you. I wished I could have been able to help answer a little more. Oh yeah, SUNSET helped a lot. You can send her a private message she is really sweet and really helpful. She always gets back to you right away.

I wish you the best. Remember everything happens for a reason, you may not see reason in it right now...but you will eventually.

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Hi MountainDew

I wanted to say THANKS so much for the post, really means alot. I will PM her and ask. I have tried to be as open and honest about this situation and I hoped that others would chime and help and also learn from it. I will keep this thread open and hopefully some others jump in. I may also try your advice for posting on another forum.

Thanks

Todd

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Hey, Mountaindews! Thanks for the pat on the back. I've tried to help you as much as possible as others have done for me.

Todd, the only reason why I haven't replied to your posts is I have no experience with debt settlement, yet. I am slowly trying to help my sis with her reports, and I am learning as much as I can about debt settlement right now. So, I just read and learn. Ask the others in the forums, they will tell you that I ask alot of questions; and I don't reply where I don't have any experience, except to 'bump' so someone else will see the post.

I hope all goes well with you. I will be looking for more of your posts.

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Since you are dealing mainly with OCs at this point, try to deal DIRECTLY with THEM...never believe anything a CA or JDB tells you.

Try not to be discouraged by several individuals on this and other boards that tell you that you are SOL...you DO have options, seeing your lawyers are a good start.

Don't settle with JDBs tho, they are bloodsuckers.....

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Hi MountainDew

I wanted to say THANKS so much for the post, really means alot. I will PM her and ask. I have tried to be as open and honest about this situation and I hoped that others would chime and help and also learn from it. I will keep this thread open and hopefully some others jump in. I may also try your advice for posting on another forum.

Thanks

Todd

Todd,

I am reading your posts from the beginning and I will be in the same situations like you soon. I am already one month late on my 70K CC debt and getting calls from Citi. As I understood from reading all the posts, I came to the following conclusions, and correct me if I am wrong:

1. In order to settle the debt for less, you will need cash, at least 30-40% of the total debt owed, and they want to get in one payment. This is a good way, since you can avoid CA, JDB, so called attorneys and a chance of being sued.

2. Well, if you don't have the money then what? Is there a way to pay through several installments? I only found it is fine with Citi but in this case they will not reduce your debt, at best they will offer you 0%, good for 60 months. It would be nice if they reduce the debt by 50% and offer the installment payment.

3. Ignore CA and JDB and always try to settle with OC, if they don't sell your account. Well, I didn't find exactly when OC's sell the account, but usually within the first year they charge off the account and sell it to CA.

4. Filing chapter 13 is better than going through all that hassles and passing times, since within 3 years, credit history can be built.

But, I am little confused in point 4, I am in Texas and I read that there is no garnishment, primary resident can be kept and the law is consumer friendly.

Thanks all,

Sam.

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Sorry for the late posts, I havent been checking this thread as I wasnt getting any response, looks like things are picking up, I really appreciate everyones posts (and I hope others will learn from all of this as well.)

First off (sorry for this newbie ?) what is a JDB or CA (collection attorney?).

I received a letter from attorneys here in Oregon and I have 30 days to send them a letter of validation. I have been waiting so I and will send it right before its 30 days so I can sort of keeping pushing things back. Citi is the only one here pushing hard (or whatever u want to call it..) The rest arent really doing much probably because the debt was lower. I will send them the letter and make them validate the debt (which I am guessing they will be able to do..)

If they do I will then probably go back to citi and see if I can work something out. If I have money at that time I will work out a deal, if not I will work out a payment plan if possible. I will keep posting as to what transpires with these guys.

As for bank of america I spoke with them the other day and told them I am looking to file bankruptcy and there isnt much I can do right now in regards to payment. I told them to call me in a month or so to see if things have changed.

I spoke with a bankruptcy lawyer and that is my last option. I dont want to get sued or judgements against me so if I have to file I will file. I dont see having to do that just yet, I know some good things are going to happen in the near future here so Im keeping my head high and expecting the best.

I wish EVERYONE a super happy and thankful Thanksgiving Holiday!

Todd

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Sam,

Thanks for your post.

I think you are right, its different for each CC company. In order for you to deal with any of these guys you do have to have money (so u can bargain..)

I have also heard that sometimes they will barely budge, which means you basically have to file bankruptcy or come up with all or most of it. WHY they do this I have no idea, but as I recently got done trying to do a short sale with WAMU and I realized that "logic" doesnt really play a part in this game. Wamu was going to lose approx 30k to a shortsale and they didnt accept it and now its being foreclosed, makes NO sense to me but I dont really know the inner workings of a bank, writing off debt, getting bailed out etc.. so it beats me..??

When it comes to the CA's I think they can be beaten a bit easier then a law firm.. Dont know on this yet either but will find out here in a bit. I will try to go back to Citi and work with them if these guys are going to sue me etc. And as mentioned before, worst case scenario I let them get ready to sue/garnish whatever they want and I will file bk and be done with it all. Start over and rebuild.

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