can collections go after pre paid debit cards

[Magog]

Hello. New guy here... I have about 12500.00 in debt that is becoming very unmanageable for me.

I am one car braking down, or emergency type event that will force me to default on my debt.

What I know is this: Once I default all rules are off. My interest rate will jack up sky high, and it will add even more missuray to try to pay this off. so I plan on biting the bullet and ride out the bad debt for 7 years and then when debt is off the books rebuild my credit.

I would be forced to pay my rent with money orders, and all other purchase via pre paid debit cards. Can the collectors go after the funds on a pre paid card? Or will I have to do everything money order form here on out?

And is that 7 year rule true. The debt is no longer legally collectible after 7 years correct?

[nobk4me]

The 7 years is for reporting on your credit reports.

Whether a debt is legally collectible depends on your state law. First, there is the Statute of Limitations (SOL), which varies by state. It can be as little as 3 years for some states, to 15 years for others. That's the time in which a creditor can sue you for the debt.

Second, there is a statute of repose, which, as far as I know, exists in only two states, WI and MS. When that passes, the debt is extinguished and becomes uncollectable.

Note, that in other states, once the SOL passes, the creditor can still harass you with letters and phone calls for the debt. But that's easy to put a stop to.

You need to learn about the FDCPA, which gives you power over collection agencies.

Can a creditor go after a pre-paid card? Only if they know about it. And, only after they sue you and get a judgment. If you fight them in court, and they lose, they can't touch you.

I would caution you not to use a pre-paid card that is associated with any creditor to whom you owe a debt. There is a concept known as right of offset, where they can take the money without a judgment.

Don't bank where you borrow.

[Magog]

thanks for the info.

Don't bank where you borrow... Ouch. I have a car loan with my credit union, who also has my visa debt.

It is set up every month they take the payment for the car out of my savings account, which is feed my my wife's checking account.

The Credit union does not own the debt, but they service the debt I think. Not 100% on that.

I worry about the car payment plan I have in place with my Credit union.

Ohhhh. Also 2500 of the over all 12500 is owed to the IRS and I have a payment plan set up with them for 200 a month, which I pay now with credit card.

I wanted to use a pre pay debt for that transaction in the poop hits the fan for me.

[nobk4me]

You should check the terms and agreement on the car loan. There might be language that, if you default on any other account with the credit union, they can take the car.

[racecar]

http://www.courts.wa.gov/court_rules/?fa=court_rules.rulesPDF&groupName=clj&setName=CRLJ&pdf=1

Washington State Courts - Court Rules

What ever you are going to default on "My crystal ball is still broken"someone will come by way of your local court to collect on whatever debt you have,so to get ahead in the game i would study your collection laws and Washington Rules of Civil Procedure.

WA State Licensing: Laws and rules - Collection agencies

Washington Fair Debt Collection Laws - Washington Fair Debt Collection Statutes

In debt? Know your rights when dealing with collectors

RCW 19.16.250: Prohibited practices.

Edited August 31, 2012 by racecar

[Amerikaner83]

The car loan to the credit union...did you get this from the CU directly, or at the dealership? Most WA dealerships are part of CUDL (credit union direct lending), which is basically the same as going directly to the CU to get the auto loan before setting foot in the dealership.

And if you pay a CU your auto loan, then they own the debt and WILL repo the vehicle if you are past due.

Like was mentioned earlier, the right of offset (which I can almost guarentee you signed with the car purchase) gives them full permissions to raid your savings account with them to pay your vehicle loan.

You mentioned you were just a little bit away from defaulting and the house of cards coming down...which means you're not there YET.

Let's take a long hard look at your financial situation.

What's your monthly income, and what are your obligations? How much is currently outstanding on that car loan of yours? What's the interest rate? What kind of car?

[Magog]

The car loan to the credit union...did you get this from the CU directly, or at the dealership? Most WA dealerships are part of CUDL (credit union direct lending), which is basically the same as going directly to the CU to get the auto loan before setting foot in the dealership.

And if you pay a CU your auto loan, then they own the debt and WILL repo the vehicle if you are past due.

Like was mentioned earlier, the right of offset (which I can almost guarentee you signed with the car purchase) gives them full permissions to raid your savings account with them to pay your vehicle loan.

You mentioned you were just a little bit away from defaulting and the house of cards coming down...which means you're not there YET.

Let's take a long hard look at your financial situation.

What's your monthly income, and what are your obligations? How much is currently outstanding on that car loan of yours? What's the interest rate? What kind of car?

I would not default on the car I would make that payment because I need a car. My income year was 26k, this year maybe 29k. This winter I will lose 25% of income do to seasonality. my my take home will be about 2k a month, my rent is 1090, food and gas is 500, and 200, and and 210 left over is not enough to pay the minimum balance of 315 a month on the credit card. Plus the lease is up this December and it is due to go up for sure.

Simple fact is I do not earn enough to live in the USA, I an the rest of all of us in this mess. Wages are far too low.

psst. Have wages gone up in the last 6 years, while the cost of living has gone up 10-15% each and every year.

Do not think for a minute we have not cut back, we dont go out, never to movies or eat out, we dont go on trips or vacations My best clothes I own are my work clothes and we have lived this way since 2001.

the only reason we have the car payment my wife wracked our car in 2007, and it is her bill she covers the cars, utilities, her gas and helps me as much as she can. She makes more then I, but she is 20k in debt herself.

We have cut back all we can, and push comes to shove the creditors are going to get hurt period.

There is no more cutting back.

[Seadragon]

Court. that may help to narrow down some that may possibly let go. also there will be some time before they go the court route. Look into when you stopped paying some and see how long that is. If you stopped paying some those will be revived as far as Statute of limitations, if you make any paymant at all. If they are defaulted then they are defaulted.

so make that list and see if the creditors sue or they sell it. time favors the prepared.

[BTO429]

If you are that bad off go see a bankruptcy attorney, just in case you have to go this route.

Call your creditors and explain your situation and see if they restructure or refinance some of you credit and make the payments lower. I would say Hey lender look it like this you gotta help or I will see you in court over bankruptcy, but if you can help me stay afloat I would rather do that.

[nobk4me]

I understand you are not going to default on the car loan.

But, the concern is, if you default on other loans or credit cards you have with the same credit union, could the credit union repo the car to cover them, even if you are current on the car?

I have seen that language in a Fifth/Third bank credit card agreement.

[Amerikaner83]

I understand you are not going to default on the car loan.

But, the concern is, if you default on other loans or credit cards you have with the same credit union, could the credit union repo the car to cover them, even if you are current on the car?

I have seen that language in a Fifth/Third bank credit card agreement.

THIS.

Also, how much is the car payment? You said you drop 500 on gas each month...is there a way to make that and the car payment go away? How much is the car worth, and how much is left on the loan?

You know, for under 3 grand you can get a very good sedan with low miles for the year it is and all that...trust me. Research cars in your CASH price range...and then research some more. Narrow them down to 3, and join forums for each of those models, and then research more (again). All the research will help when it comes time. I paid 2700 cash for my new car I bought in January...1999 Nissan Maxima with 141K on the odometer.

Do you NEED a car payment?

Getting a different car will not only kill the car payment, but the insurance will likely do down as well as not having that account with the CU over your head in the unlikely event you have to default.

The tone of your posts is a fatalistic one, you need to change your attitude around. If you think you can do something or if you think you can't...you're right. We're all here to help each other, from our collective experience.

You said seasonal work...I assume that means retail?

[nobk4me]

Here is a thread that discusses this issue:

http://www.creditinfocenter.com/forums/bankruptcy-q/316237-cross-collateralization-credit-union-agreements.html

Is it possible for you to keep paying the credit union credit card, while defaulting on the others?

Or could you do a balance transfer to another card, to take the CU card balance to zero?