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not paying credit cards and still not going bankrupt?


Bamaga
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Any advice greatly appreciated.I have 4 credit cards that that i have been $900 minimum payments on for years.I just barely get them paid the day they are due.I have been a few days late every now and them but for first time ever aftera few slow months I missed all four and will owe $1800+ as new cycle hits.I cant pay that and the spiral is going.I am very responsible and I realize its my debt but there is no way for me to pay off and i have been barely paying them for a decade and all i am paying for is to get another bill in the mail 30 days later.

     Here is the intrersting problem for  me is that I cant afford to go bankrupt.I have ebay business and i also have a "paypal loan" and "bill me later account."If I go bankrupt i have 2 include those 2 debts and if I do Ebay and paypal will cut me off.This cuts out what i do for a living and have been doing my whole life.So I am pretty much a slave to Ebay and Paypal.If I go bankrupt I lose them and cant operate.

   Once again i am not choosing to stop paying these cards by running away.I just cant  afford them so missing a few months have started the process.Power,phone,food,water etc always come first.My question is are there any success stories whatsoever from anybody who was not able to make credit card payments and stopped but did not bankrupt?

    I understand they can sue me.But actually i have nothing.A 20 year old truck and a house not even 1/3 paid for.I have no assets to take and i work for myself,no wages to garnish and no big sum of money in a bank to get,I have no sponge to squeeze.If a judge orders me to pay back is it usually the amount I owe now.More,or a negotiated amount?I guess at that point the worst i would have to do is make payments like had been doing anyway?

    If anybody has advice or experience I would greatly appreciate the input.I am a very serious and responsible person and have never had any single trouble with the law or paying back debt until now.Thanks

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There are plenty of stories of people who defaulted on credit accounts (some in very large amounts) who were never sued and never filed for BK but almost all of them originate from the great recession of 2008 or earlier.  Since the economy has rebounded and consumers have started using credit again creditors have become very aggressive in pursuing accounts via lawsuit.

What you should know is that some creditors are extremely aggressive in filing suits and don't wait long to do so once you default.  In Georgia a judgment is good for 20 years.  While you don't have wages they can garnish they can levy that PayPal bank account and place a lien on your home preventing sale or refinance until you pay the judgment.   If they get a judgment then it will likely be for the full defaulted amount (unless you can prove they got the amount wrong) and attorney fees plus court costs.  Then there is post judgment interest at a rate of 10-12% each year on that entire amount as well.  The creditor does NOT have to accept payments on the judgment.  They can move to levy assets and take all of what is in your bank account(s) since they are not exempt funds.

It is also possible that both Ebay and Paypal do a soft pull account review and determine because you have judgments to shut you down anyway so not filing BK could potentially land you in the exact same place.

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Look into the arbitration strategy:

 

http://www.creditinfocenter.com/community/forum/199-arbitration/

 

I am also an eBay seller, and having poor credit has not affected either  my eBay or Paypal accounts.   I was also in a bad situation and was able to avoid bankruptcy.   True, I defaulted in the Great Recession.  But I was only sued 3 times, I beat 2 of them, and have a very reasonable payment plan on the third one.

It sounds like you may be collection-proof, also called judgment-proof.  Be sure to look into your state's exemptions from a judgment.  You might have to file a homestead declaration to protect your house.  A creditor can't  take everything you own.

 

Look into ways to make yourself less of a target.  Check your credit reports.   You are self-employed, but be sure your credit reports do not show any employment. self or otherwise.  I know the creditors look for employment, meaning wages to garnish.

 

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More thoughts:

 

You need to learn the consumer protection laws that apply to credit reporting and debt collection, especially the FDCPA.  This law does not apply to original creditors, but does apply to collection agencies, JDBs, and collection attorneys.  A surprising number of these will violate the law.  If you have a strong case, you can get a consumer attorney to take your case at no cost to you.  The statutory damages available under the FDCPA is $1000.  The violator pays your attorney fees.   I have made more money suing debt collectors than I have paid to creditors, since default.

 

Even better than money from suing collectors is that, once you do, you will end up on a list called Web Recon.  The list you want to be on.  Many debt collectors subscribe to this, and what it means is they won't touch you with a 10-foot pole.  While the SOL clock keeps ticking.   (Note: some collectors may still contact you even if you are on Web Recon, but they are most likely the sleazy types which will violate, so more opportunities to sue them.)

 

After the SOL (statute of limitations)  expires, they can't legally sue you.  (But if they do, that is a FDCPA violation, and you will have to answer their suit with the SOL affirmative defense.)  Note that, depending on state law, any partial payment or promise to pay, or acknowledgement of the debt, may restart the SOL.  Thus, once you default, if you really don't see any way of making an account current, it is best not to pay them anything more.   And be careful what you say to them, either orally or in writing.

 

You need to keep good records.  Keep all correspondence from creditors and debt collectors.  Record all phone calls, if you are talking to them.  Note that you don't have to talk to them, and I would recommend that "newbies" to this not do so.  They are professionals who do this every day, while you are not.  But that is up to you.  They may be more likely to violate on a phone call, but you need to be careful not to give in to their pressure and agree to anything or send them any money.

Learn about debt validation and disputing a debt.  I send a dispute/DV letter, by certified mail, to every debt collector that contacts me.  Again, a surprising number of them will continue to try to collect without validating the debt, which is a FDCPA violation.

I would also recommend www.debtorboards.com.  Lots of good information there.  Note, if you need help on your journey, you can post here, or on DB, and people will help you.

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On 7/6/2016 at 5:40 PM, nobk4me said:

Look into the arbitration strategy:

 

http://www.creditinfocenter.com/community/forum/199-arbitration/

 

I am also an eBay seller, and having poor credit has not affected either  my eBay or Paypal accounts.   I was also in a bad situation and was able to avoid bankruptcy.   True, I defaulted in the Great Recession.  But I was only sued 3 times, I beat 2 of them, and have a very reasonable payment plan on the third one.

It sounds like you may be collection-proof, also called judgment-proof.  Be sure to look into your state's exemptions from a judgment.  You might have to file a homestead declaration to protect your house.  A creditor can't  take everything you own.

 

Look into ways to make yourself less of a target.  Check your credit reports.   You are self-employed, but be sure your credit reports do not show any employment. self or otherwise.  I know the creditors look for employment, meaning wages to garnish.

 

Hello,

Thanks Clydesmo and nobkme for responses  Its great to know somebody else is willing to help a strangerNobK4me.Your situation sounds similar to mine.My whole income/operation goes thru Ebay and Paypal.Its a shame that I am a slave to those companies but its a fact.I have been able for 5 years to work from my home and had just barely enough to get by plus 1k minimum payments each month to keep the bills coming but several slow months and now I am to far behind to catch up.I am glad to know it has not affected your accounts.Thats my biggest fear as i have no other way to make a living for my family.I dont want bad credit but that is is going to be inevitable.I can live with that as long as I can make a living.

     I tried to research instances where creditors can get into paypal accounts but have not had any luck.As I said I really have nothing to take.No car or home.If they ever did clean my bank account they would get anywhere from $1 to $500.I have no hidden nest egg or account.I have nothing..

  I agree with newbies not being a good idea to talk on the phone as I would be overwhelmed.I really dont know if I should write letters explaining my situation and indicate I want to pay but  I cant and that I will If I can or if I should be silent.I am ignorant on the matter but I did not know if it meant any more in court if I had written letters explaining my hardships and my desire to pay as opposed to just "deciding to not pay and walk away"?

   Also NOBK4ME how did you beat your 2 suits?You cant really dispute what you owe...did you just prove that you were unable to pay the debts therefore you won the case and the judge said you dont have to pay back.And the one that you are making reasonable payments...are you paying back original amount or less?

I am about to be 2 payments behind on 4 cards (two are from same company).If I write the letters to my credit cards  should I mention the word "bankruptcy"does that scare them knowing they may get nothing and help me or do they not take me seriously until I am further behind.

   Again the input you gave me and anything else you share is so greatly appreciated.Having a hard time sleeping and eating so I am very happy to get helpful information.

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On 7/8/2016 at 2:43 PM, Bamaga said:

Hello,

Thanks Clydesmo and nobkme for responses  Its great to know somebody else is willing to help a strangerNobK4me.Your situation sounds similar to mine.My whole income/operation goes thru Ebay and Paypal.Its a shame that I am a slave to those companies but its a fact.I have been able for 5 years to work from my home and had just barely enough to get by plus 1k minimum payments each month to keep the bills coming but several slow months and now I am to far behind to catch up.I am glad to know it has not affected your accounts.Thats my biggest fear as i have no other way to make a living for my family.I dont want bad credit but that is is going to be inevitable.I can live with that as long as I can make a living.

     I tried to research instances where creditors can get into paypal accounts but have not had any luck.As I said I really have nothing to take.No car or home.If they ever did clean my bank account they would get anywhere from $1 to $500.I have no hidden nest egg or account.I have nothing..

Keep it at the $1.00 level . . . seriously.   If you are at risk of creditors taking your money, DO NOT keep a lot of money in a bank account.  Cash in a home safe is a good option.  And don't let creditors know about your Paypal account or other bank accounts.  In fact, it would be a good idea to open a new checking account, at a bank where you have no debts.  Some credit card accounts have the right of offset, meaning they can raid your checking or savings accounts if you default on a loan at their bank.

Quote

  I agree with newbies not being a good idea to talk on the phone as I would be overwhelmed.I really dont know if I should write letters explaining my situation and indicate I want to pay but  I cant and that I will If I can or if I should be silent.I am ignorant on the matter but I did not know if it meant any more in court if I had written letters explaining my hardships and my desire to pay as opposed to just "deciding to not pay and walk away"?

 

I personally don't think there is any advantage to writing to them and explaining your situation.   You can always tell your side in court, if it comes to that.  And note what I said above, about being careful about admitting to the debt and restarting the SOL.

 

   Also NOBK4ME how did you beat your 2 suits?You cant really dispute what you owe...did you just prove that you were unable to pay the debts therefore you won the case and the judge said you dont have to pay back.And the one that you are making reasonable payments...are you paying back original amount or less?

For JDBs, absolutely you can dispute the amount.

First, the wins.  I call them wins, even though they were not actual court decisions in my favor.  1.) was an OC, for a small amount, under $2K.   I ran their legal bill on them, hitting them hard with discovery.  (It helps that in Ohio they can't collect attorney fees from consumers.  Your state law may vary.)  They voluntarily dismissed the case.  2.) was a JDB.  I used the arbitration strategy, and they more or less walked away.

 

The loss, with reasonable payments:  for the original amount, plus court costs and statutory interest.

This was in 2009.  The loss was before the arbitration strategy became a viable option. Now I would  use arb ALWAYS.

 

Quote

I am about to be 2 payments behind on 4 cards (two are from same company).If I write the letters to my credit cards  should I mention the word "bankruptcy"does that scare them knowing they may get nothing and help me or do they not take me seriously until I am further behind.

They hear that (the BK threat) all the time.

Quote

   Again the input you gave me and anything else you share is so greatly appreciated.Having a hard time sleeping and eating so I am very happy to get helpful information.

I was once in your position.  If you learn your rights, it does get better.  Yes, you will have bad credit for 7 years. And this will take a lot of research and work. But you can avoid BK and other forms of financial ruin.  Note that luck may be a factor, too.  Your mileage may vary.

 

Note also: you need to revise your thinking.  This can be difficult for a decent, honest person.  It may seem shady and sleazy.  But, once you default, these creditors are  your enemies.  This is war.  Don't do anything to help the enemy.  Don't talk or write to them and explain your situation, thinking they may help you.  First, they don't care about you and your financial survival.  Second, loose lips sink ships.   If you talk to them on the phone, they will try to find out if you work, where you get your income, where you bank, what you own, etc.  NONE of that is any of their business, unless and until the get a judgment against you and call you in for a debtor's exam.

 Also, note that bankruptcy is always an option for you, if things get too bad.  I simply wouldn't view it as a first-resort option, but last-resort.

 

 

 

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