Late on credit cards, waiting for inheritance...need to buy time

[Peristyle]

Long story short, I am three months behind on one of my credit cards which has a hefty balance. I can't seem to make any payment arrangements with Bank of America. Recently I learned I will be getting a significant inheritance. (Enough to MORE than pay off the balance on all my credit cards.)

The problem is I have to wait for the inheritance and there MAY be probate (we don't know yet). Probate could take months. I don't think it will be years, but who knows?

My question is, how do I buy time until I can get the money and pay everything off? I am thinking of asking a family member for a loan for this one credit card (I missed the past three months of payments). I don't want to borrow from her each month, maybe this one time, then wait and see how long probate takes and play it by ear. I may miss some upcoming payments, but if I can pay some of the time, would this delay Bank of America sending my debt to a collection agency? I hesitate to tell them about the inheritance just in case. (I don't know...I am as certain as I can be that I'll get it, but I don't have it YET.) 

Any advice you can give me, I'd really appreciate. Thanks!

[Harry Seaward]

What is it about "collections" that you are more concerned about that than the multiple months of late payments? 

BofA will charge the debt off at 6 months. At that point, it's anyone's guess what they will do, but they won't sue before that time. Maybe flounder until the 5th month and then make the minimum monthly to keep it from going to the 6th month. 

[Peristyle]

This is all new territory for me. I don't like the idea of collections hounding me and I don't want to be sued. Maybe that's an irrational fear; I don't know.

But based on what I'm seeing in my online account, BofA is considering the "minimum payment due" to be all three months combined. I obviously can't afford that, but a relative *might* be willing to front me that much money. The longer I wait, the higher that "minimum payment" will be, if I am understanding this right.

Thanks so much for the information you've given me. 

 

[Harry Seaward]

Is BofA not calling you 3x a day now?  I'd be surprised if they aren't already hounding you.  Legally, they could sue you if you're just one day late, but like I said, they won't until at least after they charge the debt off.

If you go back through your statements and find the first one you missed, and pay that, that will get you paid for that month, and get you back to only 2 months late (if you were to pay now).  Then look at the next one and see what interest and fees they added.  Add about 20% to that amount, and paying that should get you current for that month.  And so on.  If you wait another 2 months you can always call BoA and ask what it will take to get you within 150 days late, or 120 days late or whatever.

[WhoCares1000]

First off, if you do the payment thing as @Harry Seaward said, that will probably mess up their computers and will buy you time so that is a good suggestion. I would follow his advice on that.

The 2nd piece of advice is to not tell them about the inheritance. If BofA or especially a collector gets wind that you are coming into money soon, they will run to the court to get a judgement so that they can scarf that up as soon as it hits your bank account. As far as they know, you are a common person who fell on hard times.

As Harry said, so what if they go to collections. Most debts do not make it into court until they are 9 months - 1 year late. Unless you think this is going to be a long drawn out probate where family is going to fight each other tooth and nail, then the probate will not last too long. In fact, if there is a will and everyone is in agreement, then the probate will last long enough for the creditors of the estate to get their claims in and paid and to get most of the property into cash. That usually takes 3 - 9 months depending on the rules of the state the probate is in. Besides, I bet BofA is already hounding you which is no worse than a collector (and actually, collectors have to follow certain rules that BofA does not have to follow).

Finally, look in your BofA contract and see if there is an arbitration clause. If there is an arbitration clause, even if they sue, you might be able to fend them off for a while or permanently while waiting for the probate to clear. Now is the time to look when you are only a couple of months behind and still have the contract in your records (or can access it online). Not only that but you can probably make a better deal with a collector or JDB than you can with an OC. That would be though if you cannot keep up the charade of making minimum payments long enough for probate to end.

[Peristyle]

Thank you @Harry Seaward and thank you @WhoCares1000 so much! Your advice is helping put my mind at ease.

I haven't been hounded by BofA yet, though they did send me something via UPS today (that I haven't had a chance to see yet). I am also getting more emails from them.

I will try to scrape together at least another payment. The holiday season usually brings in more money for me anyway. I have discussed the possibility of a loan with my family member. We both agree that I should borrow as little as possible and try to ride this out. However, I definitely want to send a payment before I am 6 months late. Hopefully at least two payments.

We don't expect too many complications with the inheritance. The family all gets along and there is a will. We may even be able to avoid probate (we're still waiting to find out). Probate would be in California. There may be a few small complications but I doubt they would be too time-consuming.

Yeah, my family has cautioned me not to tell BofA about the inheritance and I wasn't intending to, but you have now explained why. Wow, yeah, I won't be telling them anything!

Another thing I read about (and worried me) was the possibility of wage garnishments or something like that. I definitely don't want that to happen. (Especially when it's just a waiting game and they WILL get their money!) What is the possibility of that happening and how long would it take for them to do that (if they can)?

Thank so much to you both for your encouraging and helpful advice.

[Harry Seaward]

They have to sue you first, then get a judgment and only then can they get a wage garnishment order. You're over a year away from that being possible if you put up even the least amount of resistance.

[WhoCares1000]

You are not anywhere near wage garnishment at this point. In order for BofA to garnish your wages on a credit card, they fight must take you to court and win. That takes time too (usually 1 - 2 months for a default case, more is the case is contested). I would not worry too much about that right now.

From what I read, probate in California can take about 6 months to 2 years depending on the complexity of the estate. A good will reduces the time period but if there was a business or things like that, those take longer to unwind.

The probate process is like this:

1. Someone petitions the court to start the case. In this case, that will usually be the executor or their legal representative
2. The court informs all heirs and interested parties of the probate case
3. The court will prove the will (make sure it is valid) and appoint the executor
4. The executor takes an inventory of the estate
5. A notice is put in the newspaper to inform creditors of the estate, who to make a claim with against the estate, and how long they have to do so
6. The executor pays all claims against the estate that are valid. With court permission, property could be sold to pay the claim
7. A final accounting is provided the court and the heirs with time to contest
8. The estate is distributed to the heirs and the executor is released.

All of this takes time, even in simple cases, so don't be surprised.

[LaneBlane]

On 9/11/2018 at 4:40 PM, Peristyle said:

Long story short, I am three months behind on one of my credit cards which has a hefty balance. I can't seem to make any payment arrangements with Bank of America. Recently I learned I will be getting a significant inheritance. (Enough to MORE than pay off the balance on all my credit cards.)

The problem is I have to wait for the inheritance and there MAY be probate (we don't know yet). Probate could take months. I don't think it will be years, but who knows?

My advise would be to try to work out an arrangement with BofA to get caught up on your payments without relying upon a possible inheritance that could take a while to come through.You have to consider the possibility that you'll inherit less than you're expecting, or even nothing at all.  Always hope for the best and expect the least.

Whatever you do, make certain you're able to follow-through on any payment arrangements you make with BofA. Don't promise to pay something by a certain date if there's a chance you won't be able to.  You also have to keep the lines of communications open.  Don't avoid their calls and ignore notices.  When I went through some financial issues years and years ago, I found it really helped to stay in touch so they knew I was acting in good faith.

In my personal experience, I've found that borrowing money it not always the best solution. It's a safety net - and the presence of a safety net can make you take risks you really shouldn't take.  What's that saying...  the definition of insanity is doing the exact same thing over and over again and expecting a different outcome?  If you need a loan to catch up on bills, there's a good chance you'll find yourself in the exact same position if you don't change something.  Real change doesn't come from events that aren't for certain (promotion, inheritance, increased sales).  You need to rein in your spending and be more financially responsible.

If you're like me, and your salary/revenue increases over the holiday season, you should make a pact with yourself to take a certain percentage off the top and to get you caught up and stash at least $500 in savings for the unexpected.