Amacie

College student who can't find employment seeks protection from debt collectors!

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Hi,

I've had this website bookmarked for several months and have hesitated to post until now. I'm posting now because my situation has finally got that bad and I don't know where else to go.

I have student loans, a car loan, and six credit cards. The student loans and car loan are not a problem - my parent pays the student loan, I manage to get enough every month to pay my car loan. The balance of the credit cards is around $8,000, but I haven't used any of them since 2006. Just recently, one went to collections. I get phone calls as frequently as every ten minutes from collectors. I have not contacted any credit card company, I've never answered a call, to tell them about my situation, because I'm sure they hear similar tales all the time. I feel that the other cards will go to collections fairly soon as well. Today I received my first letter from collections (NCO Financial Systems), collecting on a $500 IKEA credit card debt, which says I can write them a letter within 30 days to verify the debt. I plan on sending them the sample letter 9 for debt verification purposes first, but after that I'm not sure what to do.

My Question: I feel that my situation is a little unique here, since most other people are at least employed. Considering I have no steady income source and won't until next year, what is my best approach for dealing with this credit card debt, and collectors? I'd like to make an action plan, but I'm a little confused as to what to do after "Step 1: Send debt verification letter to collection agency."

Thank you so, so, so, so very much for any responses. I will answer any questions if needed.

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Welcome to the forums, but your situation is hardly unique. I worked on rebuilding my credit for over a year so I could finally buy my first house. Less than one week after closing on that house, I was laid off. That was over five months ago and I am still unemployed--and now I have a $2k/mo. mortgage to pay.

You haven't really explained what you want to accomplish? You can certainly cite the FDCPA and order them to never contact you again. Of course, that's just likely going to cause them to sue. But they're going to sue you eventually anyhow. There really isn't any magical advice I can give you. You have a choice: a) find a way to pay your bills or B) brace for the inevitable destruction of your credit, along with judgments which will result in garnishments. Your CC's are unsecured debt, so Option B is something that you could do, but it's going to haunt you for at least seven years and be extremely stressful and embarrassing.

The most sane thing to do though is find a way to pay your bills. Call the CC companies and ask to speak to the hardship department. You might be able to work out a reduced payment schedule. But either way, they're still going to want to be paid. Sell your car and either buy a junker or take the bus. Cancel your cell phone. Take up the traditional college diet or ramen and peanut butter. Whatever it takes... Judging from how much you prefaced your posting, you're spending too much time justifying why you don't have a source of income instead of finding one. Like Tim Gunn says "Make it work!"

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I'm a full-time college junior, majoring in engineering, who'll be graduating in 2010. I was fired from my job last October, a job I had for five years, and had paid all of my bills on time.

That's quite a preface... Welcome, and may you find the answers you are seeking.

I'll start by saying I hope you don't think it's OK not to pay your bills simply because you're a starving college student whose employment was terminated. If so, I find that attitude reprehensible. If your previous job wasn't the right fit, find a new employer.

I frequently searched for employment and had two interviews, but they weren't willing to work with my school hours. When I started this semester, I stopped looking for a job because I do schoolwork for at least six hours a day on top of class time.

You say you frequently searched for a job, and in the same sentence you say that you had only two interviews. Which is it? Two interviews is something a semi-productive person could get scheduled within 2-3 days, not 5 months.

Six hours of classwork per night, really?! You're not exaggerating?... If that's really the case, then you're not playing to your strengths and are probably in the wrong major. If you were studying something you had a passion for or were good at, it wouldn't take 6 hours a night to complete your work (I'm just sayin..). I have a BS in EE and an MBA and I earned them both while working full-time concurrently. I might have spent 6-10 hours studying per week at the very most.

If I can be blunt, so far I'm very much unimpressed with your purported productivity level..

Today I received my first letter from collections (NCO Financial Systems).....I plan on sending them the sample letter 9 for debt verification purposes first, but after that I'm not sure what to do.

After that, suck it up and get a job and then you negotiate settlements/payment plans/hardship programs. Going five months without a job with debt hanging over your head is what caused your problem. You might still be able to avoid chargeoffs, CAs and lawsuits/judgments altogether; if you wait longer, you won't be able to. You can start by making goodwill payments of at least $100-$200 to each credit card.

Your other option as I see it is to send some DV letters and then do nothing, study hard, wait until graduation, pray the job market is better for entry level engineers in 2010-2011, and in the interim let your credit go to pieces. As your credit gets worse and as the charged off debt gets older it becomes worth less and less. You might then be able to settle it for less.. maybe, but by then your credit will be shot.

Either way, lighten up. Don't beat yourself up. The amount of $8,000 is a lot to a college student, but in the scheme of things, it's relatively small, and if you can negotiate some of that down in a settlement, you might be looking at only needing to gross $6k or so. That is easily doable for someone living at home with a summer job; you just need to work harder.

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You can certainly cite the FDCPA and order them to never contact you again. Of course, that's just likely going to cause them to sue. But they're going to sue you eventually anyhow. There really isn't any magical advice I can give you. You have a choice: a) find a way to pay your bills or B) brace for the inevitable destruction of your credit, along with judgments which will result in garnishments. Your CC's are unsecured debt, so Option B is something that you could do, but it's going to haunt you for at least seven years and be extremely stressful and embarrassing.

How long does it usually take them to sue? How late on your payments do you have to be?

The most sane thing to do though is find a way to pay your bills. Call the CC companies and ask to speak to the hardship department. You might be able to work out a reduced payment schedule. But either way, they're still going to want to be paid. Sell your car and either buy a junker or take the bus. Cancel your cell phone. Take up the traditional college diet or ramen and peanut butter. Whatever it takes... Judging from how much you prefaced your posting, you're spending too much time justifying why you don't have a source of income instead of finding one. Like Tim Gunn says "Make it work!"

Because I feel bad about it.. but it's too long, so I'll delete it. I didn't even know CC companies had hardship departments. Oh, can't take the bus because my parents live 1 1/2 hours from campus, and I already eat their food and take it to school with me for lunch. But I'll probably cancel the phone. Thanks!

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And this comment is why I wrote such a long preface! I feel like the Octo-Mom here guys, don't shoot me.

I'll start by saying I hope you don't think it's OK not to pay your bills simply because you're a starving college student whose employment was terminated. If so, I find that attitude reprehensible. If your previous job wasn't the right fit, find a new employer.

Of course I don't think it's okay, which is why I feel terrible about it, because I always used to think the same way about students who didn't have jobs and complained.. but now I'm right there with them. I loved my last job. I was fired for coming in late over the last month or so, my fault entirely. Won't do that again.

You say you frequently searched for a job, and in the same sentence you say that you had only two interviews. Which is it?

Both. I interviewed with temp agencies also, but nothing ever came of them.

Six hours of classwork per night, really?! You're not exaggerating?...

I love my major! I'm taking 21 credit hours this semester, sans the typical easy electives, so it's just a lot of work. I COULD change majors to something easy, but then I wouldn't be passionate about it and I'd have to start all over. The way I see it, I'm almost done so I might as well hang in there until I am.

After that, suck it up and get a job and then you negotiate settlements/payment plans/hardship programs. Going five months without a job with debt hanging over your head is what caused your problem. You might still be able to avoid chargeoffs, CAs and lawsuits/judgments altogether; if you wait longer, you won't be able to. You can start by making goodwill payments of at least $100-$200 to each credit card.

You sure they'll be willing to listen to someone who hasn't picked up the phone in five months? I'm just saying, I didn't know these hardship programs existed, and from all the horror stories I assumed that it was better to communicate with "them" via letter and do nothing over the phone.. not realizing "them" was collections agencies. So far one has went to collections. How should I divide the money up, should I pay that one off first, or the one with the largest balance (about $2K)?

Either way, lighten up. Don't beat yourself up. The amount of $8,000 is a lot to a college student, but in the scheme of things, it's relatively small, and if you can negotiate some of that down in a settlement, you might be looking at only needing to gross $6k or so. That is easily doable for someone living at home with a summer job; you just need to work harder.

Well geez now I'm scared to wait until summer. Maybe it'll be unfixable by then!

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WOW

not trying to jump ion the bandwagon to beat you down about this but......

#1 NOBODY HERE WILL FIX YOUR PROBLEM FOR YOU.

you need less thought/talk and more action. great minds and advice are what you will get in here. the rest my friend, will have to be done by YOU.

your first step is accepting that you have to face this. now or later you will have to. that being said, the more you do now will lessen the impact later.

one of two things will happen with you. its human nature. fight or flight.

which one is it going to be?

if you plan on doing nothing then you will receive nothing. however, if you plan on doing something i would suggest be a big man/woman and CALL YOUR CREDITORS.

good luck and if you choose to be a fighter let us know what the creditors say when you contact them. that will be the next step on the road to recovering from this situation.:)++

oh and one last thing. if you came here thinking that the old "dispute all your negatives and they will go away" theory works. you may be in for a rude awakening. times are tough for creditors as well and they are FIGHTING to recoup their cash.

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...

There is a great place to go when you're broke...TO WORK.

I'm not just trying to be flippant here...you have a fairly minor problem and and even a burger-flipper job for three or four months would solve it...if need be, you can get two or three or four part-time jobs and get this taken care of very quickly.

Ignoring this will not make it go away and if you don't take real action now it will get exponentially worse...you could see $8K turn into $16 faster than you can turn around.

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if you plan on doing nothing then you will receive nothing. however, if you plan on doing something i would suggest be a big man/woman and CALL YOUR CREDITORS.

.

Well I picked one OC at random and called them. I asked if I could speak to their "hardship department". The CSR said they could take care of it? This was before I told them any personal info. Then I explained my situation, that I'm in school and everything, and if they'd be willing to work out a payment plan. She said "probably not, a lot of people are having problems right now and we get this same call all day" and then I asked if she wanted my personal info to look up my file. She put me on hold forever, came back and basically repeated what she had said before. So that sucks.

As far as thinking that disputing all your negatives will work, I don't think anything about that theory, which is why I'm asking for advice. But according to this website, it's the first thing that you should do. Right? I do think it's weird that the idea seems to be: dispute the debt, even if it's valid, because you might be able to nail them on a technicality, but whatever.

I'll go back to looking for a job, but it's hard to find one that works with your hours, I have one class (only offered this semester and only at this time) at 8:30A and one at 4:30, plus the commute. But yeah, I'm glad to hear that no one here has ever been in debt before because y'all are so responsible.. geez 8] Looking for a job and being unsuccessful is really discouraging so after a few months I focused more on school and kind of accepted that I probably wasn't going to get something that would go with my weirdo hours, it's not because I hate working or anything, I just get caught up with school stuff, but I will keep looking.

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"I'm going to college full time and have another year or two to go, so I can pay you then. Or... you can sue me and garnish my pay when I start working then. I have a firm job offer in Russia...."

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"I'm going to college full time and have another year or two to go, so I can pay you then. Or... you can sue me and garnish my pay when I start working then. I have a firm job offer in Russia...."

I'm working this summer! I just wanted to know if two months from now would be too late also.

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I'm working this summer! I just wanted to know if two months from now would be too late also.

I'm a bit confused about what you are looking for here?

Your best approach is to start making at least minimum payments on your cards and keeping them with the original creditors - just letting them go for two months or however long it takes for you to start earning an income at your planned job may be too late because once these go into collections; these things are going to turn into monsters.

I encourage you to find a job...any job...or two or three jobs...whatever it takes to bring in enough income to get these paid off...deliver pizza...flip a burger...be a Wal Mart greater...run a cash register at a grocery...whatever.

That's what I would do...that's what I've done.

I know that's not pleasant but it's a lot more pleasant than the alternative.

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WHatever you do dont drop out of school it gets harder to go back as you get older. Dropped my 2nd year thinking, I'd work a few years and travel, only going back now to University of Phoenix and its a lot harder to learn. If you cant get a job now then get one over the summer.

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I encourage you to find a job...any job...or two or three jobs...whatever it takes to bring in enough income to get these paid off...deliver pizza...flip a burger...be a Wal Mart greater...run a cash register at a grocery...whatever.

\QUOTE]

Not that I'd defending the OP but its not that simple. My situation is nowhere near as bad as the OP but I'm currently out of work. I have 2 BA and would be more than happy at this point to take a retail/fast food job but they take one look at your application and won't waste their time on you b/c your're overqualifed.

And I can't leave off my educational info b/c I worked on campus jobs and if I did that I'd have a 5 1/2 year gap of unemployment....

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I encourage you to find a job...any job...or two or three jobs...whatever it takes to bring in enough income to get these paid off...deliver pizza...flip a burger...be a Wal Mart greater...run a cash register at a grocery...whatever.

\QUOTE]

Not that I'd defending the OP but its not that simple. My situation is nowhere near as bad as the OP but I'm currently out of work. I have 2 BA and would be more than happy at this point to take a retail/fast food job but they take one look at your application and won't waste their time on you b/c your're overqualifed.

And I can't leave off my educational info b/c I worked on campus jobs and if I did that I'd have a 5 1/2 year gap of unemployment....

Keep in mind that the OP is a college student...not exactly the same situation as you are in.

That aside, while I don't discount what you say, perhaps you need to consider living somewhere else? Only you can decide what makes sense for you but there ARE jobs in this economy but it may be that moving is necessary if none of those jobs are in your area...I've moved for work before and it's not fun but sometimes it's necessary.

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Keep in mind that the OP is a college student...not exactly the same situation as you are in.

That aside, while I don't discount what you say, perhaps you need to consider living somewhere else? Only you can decide what makes sense for you but there ARE jobs in this economy but it may be that moving is necessary if none of those jobs are in your area...I've moved for work before and it's not fun but sometimes it's necessary.

I know. RI has the highest unemployment in the country right now...But its a catch 22, if I could afford to move I would. I've interviewed with places outside of the state and they offered no help with moving.

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I know. RI has the highest unemployment in the country right now...But its a catch 22, if I could afford to move I would. I've interviewed with places outside of the state and they offered no help with moving.

I'm not trying to be mean here but the fact that options are unpleasant doesn't mean that there aren't any.

I wish you well.

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Well I picked one OC at random and called them. I asked if I could speak to their "hardship department". The CSR said they could take care of it? This was before I told them any personal info. Then I explained my situation, that I'm in school and everything, and if they'd be willing to work out a payment plan. She said "probably not, a lot of people are having problems right now and we get this same call all day" and then I asked if she wanted my personal info to look up my file. She put me on hold forever, came back and basically repeated what she had said before. So that sucks.

It's discouraging, but don't take no from someone who can't say yes. This CSR you spoke with didn't have the ability to give you what you want and need.

All credit card companies work in a similar way.

1. CSR general customer service

2. Delinquent accounts sent to internal "collections"

3. After collections isunable or you are unwilling to negotiate a hardship program or some other program that will eventually lead to payment in full, then you are sent to "recovery"

It is the recovery department that makes the decision whether or not they will settle your account, whether they will sue or whether they will assign a CA. A lot of that decision depends on you and what you have done and/or said.

The point is: don't let a frontline CSR with no ability to help you be the one who tells you "no". The company very well may say, "no", but let that answer come at least from someone who might or could say, "yes".

Write a letter if you have to via CMRRR and send it to the address used for correpondence with your credit card company or send it to the office of the chairman and let them filter it to the right department for you.

Or, call and demand to speak with collections or recovery or with a supervisor who can then transfer you to collections or recovery. Just don't take no from anyone who clearly can't say yes.

Also, find a way to keep the accounts with the OC, whatever it takes. IF they get charged off and go to collections, your credit will be shot and you'll have to deal with CA, possibly multiple CA, in addition to the OC for CRA disputes and this opens the door to dealing with JDB and possibly fending off lawsuits.

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Go to work for a bankruptcy firm. They need lots of help. Business is really, really good for them. Clean the bathroom, send out mailers to people behind on their mortgage. They have tons of scut work.

Then after a month or so, ask if they will 'represent' you. That means you can tell the debt collectors that you have a bankruptcy atty and you qualify for Chapter 7 because you have only a part time job and no assets.

Watch them fall all over themselves trying to work with you.

Do you have an atty friend? Work for ANY atty and ask if they will allow you to tell your creditors that they are advising you regarding a Chapter Seven Bankruptcy.

They get really reasonable when they realize they may get zip for their claims.:)++

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The OP is long gone since this is a very old thread. But to respond to the last post above, filing BK over $8k is not a very good solution. Working for a BK attorney is...but IMO filing BK will hurt the OP more than sucking it up and getting a job to pay off this debt. Since it has been over a year, maybe the OP can come back and tell us the result of her work since Feb 2009.

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I can't even begin to imagine how discouraged the OP must have felt at a lot of that advice. I guess I'm in a totally different mindset than most. When I read it all, I heard "you have a 100 lb weight in your hand and you're treading on water, add another 100 lbs to that with 4 part time jobs and keep trying to swim"

Sometimes you have to let go and take the hit for your own sanity and well being. I realize we're trying to help people repair their credit, but as the old saying goes, "you can't squeeze water out of a rock."

There are times when it's just not worth the mental energy of fixing something already broken. Mitigate the damage, and reinforce a decent credit score showing some bad tradelines with new ones in good standing when you have the ability. Then work to get the bad ones off.

Judgments weren't guaranteed, for all we know JDBs could start getting involved and they're much easier to handle than OCs. I'm not even going to start rehashing the morality of debt argument...

Edit: Oh, and Redline casts "Revive" on this thread :ancient::catholic:

Edited by LUEser
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I stand with LUEser on this situation.

The OC's know by getting a judgment against you, they still wont receive a dime because you have no money. Instead the debt will be sold for pennies on the dollar and you'll be contacted by several JDB's. From here you can negotiate a lower debt settlement.

Good luck to you.

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Years ago I knew of someone in your position. They called each OC and asked for payments to be deferred until after schooling was over. Maybe you could ask for a deferral for 6 months until you can work in a summer job.

engineering is an extremely hard major-----one you can't just study for an hour or two everyday

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