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cc rate increase, late payment


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Hi Everybody.

First, apologies for possibly posting this question in the wrong place.

I have a growing debt problem that I have been struggling to keep up with,, and I have managed to keep everything current for the past 5-6 months. Before that, I've never been more than a few days late on anything.

The shortcut to my question is this: I had a pyt due on a CC on Nov 13, but I screwed up and remembered to pay it on the 15th. The interest rate was already at a 'penalty rate' (my term) bc of some screwups earlier this year. I was trying to just make the payments at this rate for awhile and then ask to have it reduced. Well now I have ruined that.

When I went online to pay, there was a little message there that said my acct "may be subject to rate increase to 30% and a late payment charge of $39."

So I called the CC (it was 6 am on Sunday morning, Eastern). And the woman on the other end said that there was no way to tell if the rate will increase until it actually does. And that will happen when the next statement is printed, this Friday (Nov 20th). And there was no way it could be prevented, if it is going to increase, which there is no way of knowing.

What is that baloney? How can *nobody* know this?

Anyway, so I know that once the stmt prints, even if I can get them to lower the rate (if it goes up), I will still be responsible for the amount due on that stmt.

I fear this is where my problem is about to become monumental. I will not be able to make a payment at 30%. The current rate is 25% and that is already difficult.

So. Please, if anyone here can, will you tell me where to post this question (if this is the wrong place), or what you would do in this situation, or offer any insight about what is going on here.



ps: I am scared.

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There are a couple of things you can do. The very first thing is to sit down and write a realistic spending plan (a/k/a budget) for your household expenses. Make sure you list all the important things first: food, shelter, utilities, savings for emergency fund, insurance, car payment, car maintenance, fuel etc. For the moment leave off your cc payments. Make a separate budget for your cc payments. Are you in the red? Probably. Are you still charging on your cards? Hopefully not.

Depending upon how severe your situation is right now, you can:

1) Enter into a hardship program with the creditor (original creditor/not collections agency). This involves speaking directly to the hardship dept and working out some payment you can afford AND closing your account. Many of the hardship depts will work out a plan with very low interest, like zero percent or two percent. They will want to draw directly from your bank acct. DON'T LET THEM. Set up a separate account that you fund under your control that is not affliated with any of the creditors. Maybe even use a wal-mart pre-paid card for them to draw their payment. This way you keep total control if your situation gets any worse and you have to move to a more drastic step.

2) If you can not work out a hardship program that is good for you, AND you owe a large amount of debt that you can not repay (large is subjective), you may want to consider bankruptcy.

It is not possible to guide you without knowing all of your details including income, debt, assets and current liablilties. You may not need to file bankruptcy, but look at your figures without any preconceived ideas and come up with a plan. You can even post your figures here and we can help you formulate a plan if you prefer.

This is the scary part. The creditors can not put you in jail or do do anything drastic. You are the one that is looking out for you, don't let them drive you to making payments that hurt you in the long run. You need to set up the best budget for you, including savings, before you even speak to the hardship dept.

Edited by Denita
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