Dreamer3381

Massive Credit Card Debt now partially disabled, help!

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First let me start by saying I haven't even gone 30 days late as of yet but I am massivly concerned on what might happen. First and foremost I had a chapter 7 bk that was done in April 2014. I have since built my credit up and have been slowly racking up my cards. I currently owe Capital One $60,000, Barclays 20,000,  Discover 4,000, and lending club 24,000. One month ago I had a massive seizure and was diagnosed with a brain tumor. I have lost my job and can barely work 10-15 hours a week from my doctors note. I have all medical records. Now I currently have 0 assets other than a 16,000 car I bought on loan and the value is lower then it's worth.  I am deathly afraid they are gonna bring a ****storm down upon me. Especially Capitol one. I live in Ramsey county, Minnesota. I have no idea if I should call the companies and explain my situation so it can be documented that I tried and didn't walk away blindly.  I am pretty sure they are going to say sorry you owe us. I am currently on medical assistance and food stamps because of this situation. I think I am exempt from garnishment. I know I am jumping the gun, could be years before anything happened, but I want to know somewhat what to do? Or what's gonna happen? Any words of advice would be good. I am assuming I am gonna need an attorney at minimum.

 

I have also heard that because the large amounts they can possible file something to block me filing bk in 8 years from now? Is that possible? Would they do that? 

 

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The cannot block you from filing 8 years from now but you cannot file until then (which means May of 2022). You are in for 6 years of hell in the meantime.

First thing I would do is stop all payments for the credit cards immediately and amass money. You are going to need to. Send them a certified letter saying you revoke any calls to your cell phone. Then either get rid of your landline or use call block and absolutely do not answer calls from any phone number unknown to you. They are going to call, scream, foam at the mouth, and every other thing for debts of this amount.

As for the car, decide if you can keep it or not. If you can deal with the payment, they consider keeping it at this point because the debt if higher than the asset and by the time you pay it down, the car will probably we worth less than the exemption. If you cannot afford the payment, go to the bank, offer a voluntary repo and inform the bank that they will probably end up eating any deficiency.

About 6 months from now, the credit card debts will be charged off and they probably sold to JDBs or you will be sued (especially by Capital One). The JDBs will act worse and probably break federal law so make sure to get a recorded. Also, learn about the FDCPA and TCPA because you will need to know those if they do break the law.

You will be sued eventually. For the amounts you mentioned, JDBs and banks would sue their own mother. It will probably be using the pocket docket which means the case is started when you are served, not when it is filed in the court. You can file an answer and try to fight it. If it is an OC such as Capital One, you will probably lose. If it is a JDB, you might be able to win. Other posts here will tell you how to do that. There is arbitration but then again, for these amount, they will probably follow you there too. At the lawsuit point, I would close all bank accounts that you can. If any are used for Social Security, inform the bank of such because Social Security is not collectable fund for judgements. You can also let the attorney on the other side know you are currently on food stamps. That might or might not stop them because you are collection proof in Minnesota if you are on any public aid (including food stamps) and for 6 months after.

If they do get a judgement and decide to go all the way, expect to be called into court every 6 months for a debtors exam. They will do this to try to trip you up to get you arrested. Make sure you go to court every time, even if it is to tell them the situation had not changed.

In May of 2022, if you can get enough money together, you will be able to file for BK7 and the creditors will not be able to stop it. Not even for the amounts you mentioned.

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<SOAPBOX>Please note, this is just a rant and is not aimed at the OP.

2 years out of a BK7 and you managed to amass $125,000 of debt ($108,000 of it being credit card)? I think whoever at the bank approved of this should be hung, drawn, quartered, then shot. I think the banks are about to get what they deserve here too. This is crazy and show where this country has gotten to when it comes to debt.</SOAPBOX>

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Thanks for the awesome reply, good things to know! 

Sounds like I am in for 6 years of Heck. Sadly! 

Do I contact any lenders and explain my situation though and or would it matter? My biggest concern is the lending club payment of $800 a month.

Say  I were to mange to make the minimum payments on my cards but missed the lending club payment. When they eventually report that to the credit reporting agencies and it shows I am in default, couldn't my card companies slash my limits down and require immediate payment of the above balances so I would be ****ed anyway? 

Or is it possible to just pay down what debt I can and let the big payment go? 

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2 hours ago, WhoCares1000 said:

It will probably be using the pocket docket which means the case is started when you are served, not when it is filed in the court. You can file an answer and try to fight it.

Looking at those balances the only one that would land in a pocket docket court is the Discover card.  The others are so high that they would land in state court for that amount of money.  

2 hours ago, WhoCares1000 said:

There is arbitration but then again, for these amount, they will probably follow you there too.

Discover would.  Barclays I have no experience with but Cap1 removed arbitration in 2010 and an account opened in the last 2 years would not be eligible for it.  Cap1 has the largest balance and is the most aggressive when it comes to collecting.  They have not been selling their debts in the past 2 years and aggressively pursuing them on their own.  Lending Club could go either way.

2 hours ago, WhoCares1000 said:

2 years out of a BK7 and you managed to amass $125,000 of debt ($108,000 of it being credit card)? I think whoever at the bank approved of this should be hung,

While I don't agree with the banks issuing credit limits that high the burden of actually using it rests on the consumer.  Credit card debt that high is using them for living a lifestyle not for their designed purpose.  It is the main reason I don't recommend that someone who has filed BK immediately start opening accounts again.  I believe it is best to live a cash lifestyle for a couple of years until one can better control their money and budget.

11 minutes ago, Dreamer3381 said:

Do I contact any lenders and explain my situation though and or would it matter?

You certainly can but I would not get my hopes up that it changes anything.  They hear thousands of stories like this every day.  They have to be immune to them to stay in business.

12 minutes ago, Dreamer3381 said:

Say  I were to mange to make the minimum payments on my cards but missed the lending club payment. When they eventually report that to the credit reporting agencies and it shows I am in default, couldn't my card companies slash my limits down and require immediate payment of the above balances so I would be ****ed anyway?

It is very possible.  No way to predict what they do.

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Things to do to make your life more bearable for a while:

Stop all payments IMMEDIATELY.

I might even go as far as changing your phone number.

When the accounts go to a collection agency.  Immediately send cease and desist letters. You may be able to catch a couple of them on FDCPA violations if they continue to contact you after a cease and desist. 

Put away a little bit of money each week for a while so you can pay a bankruptcy attorney when you become eligible to file again. 

Godspeed and good luck. 

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@Clydesmom Pocket docket is used for regular court, not small claims so they are all pocket docket. That is one of the issues is that there are many regular court claims clogging the system because of the JDB's insistence on using Pocket Docket rather than small claims court.

I discussed this issue with my state legislators and found out that the largest employer in Minnesota likes this system because they can keep their errors hidden from public view so that is why it applies to regular court and why it will never be done away with.

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@WhoCares1000 that is good to know.  I thought it was only related to small claims.

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