Can't Pay Credit Card Bills? I can HELP!
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This blog is for people out there who cannot pay their credit card bills. If you have lost your job or possibly have suffered from an illness, whatever the reason and you cannot pay your credit card bills...well this hub is for you.
I'm sure you have already had many a sleepless night wondering what you are going to do, maybe you've had good credit your whole life, maybe you've already tried credit card consolidation and now that you missed a payment or two and your interest rate has sky-rocketed, your FICA score has plummeted and you know that you can't pay your credit card bills. Well, what I am going to tell you may go against the grain of many but here is my advice...are you ready, hmmm?
If you aren't working, if you are renting your home or apartment or sleeping on your brother-in-laws couch, if you are barely able to buy food for your kids, DON'T PAY YOUR CREDIT CARD BILLS. That's right, don't pay them. Don't file for bankruptcy and for goodness sake don't sign up with a consumer credit counseling company. All these people will do is take what little money you have left.
If you file bankruptcy, you will have to pay thousands of dollars to do it and then it will be on your credit report for ten years. Depending on where you live if you simply can't pay your credit card bills then STOP trying to pay them. Your credit will be clean after possibly six years (in some states as little as three). What ever you do, DON'T TALK TO THEM. If you talk to them, you will be giving the credit card companies or banks the advantage and you will also be setting the clock back to zero on the six years. You will have to deal with phone calls but that is easily remedied by getting a cellphone and screening your calls. If you are not working, the credit card companies cannot take your unemployment checks. If you are working they can sue you and garnish your wages, but unless you owe them a lot of money they probably aren't going to go through the trouble and expense of doing that...it is a risk. Furthermore, if you are summoned to court make the company provide verification of the debt and proof that they own the debt. If they cannot supply this (and almost all of them cannot) you win!
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Don't even think of calling a consumer credit counseling company!
All these people will tell you to do (after taking their fee which is substantial) is the same thing I am telling you to do right now (only I'm not charging you a fee). They will tell you to stop paying your bills, then after a certain amount of time the credit card companies will start negotiating with you. They will offer to settle with you for sometimes as much as half as much as you owe them but if you hold out you may be able to settle for 10 cents on the dollar. If you can settle with them, do so, if not you will have to run the risk of harassing phone calls (get a cell phone and only answer calls that are identified) and possibly a lawsuit. However, they aren't going to take you to court if you don't have any money. It's not worth their time and the last time I checked there were no debtors prisons.
Now, for all of you out there who think that this is awful, who think that I am encouraging irresponsibility all I have to say is these are the same BANKS that stole millions of dollars in bail out money using a ponzi scheme that they benefited from. They took a risk, lost, could not pay their bills and now we are paying their bills for them! These are the same banks that have lobbied (otherwise known as bribing congress) for decades to stack the deck against the consumer. These are the same banks that have brought this country to the worst depression since 1929. So, don't cry to me about irresponsibility,that is exactly what the banks want you to feel, they want you to keep on that hamster mill until they have sucked every ounce of blood from you. You'd better believe that the CEO's of these banks aren't sleeping on their brother-in-laws couch or staying up nights worrying about how to pay the electric bill. Not only that but the money that was lent to you was made out of thin air! That's right, the money that banks lend to you they CREATE out of thin air, it's not your neighbors money, it's not the "banks" money all it is are digits in a computer made up. It's called the fractional reserve system and it's the biggest scam you never heard of!
In the end, it's up to you. You can try and pay them but if you can't pay your credit card bills, don't! Just don't file for bankruptcy and don't sign on with a consumer credit counseling company, if you can't pay your bills just don't pay them until they knock them down to half, then wait until they knock them down to 10 cents on the dollar, then think about it :)
Good Luck
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Difficult times, require difficult choices. I hate credit, I always have. most people don't think about the interest they are paying in the first place, they never add that up and come to the understanding that what they are doing is BUYING money. money they will have to pay with their future earnings... the more they do this, the worse the future looks.
Great blog, Brie.
Thanks, I hope it helps some people out there because I KNOW that there are a lot of people who don't know what to do. I don't use them at all anymore, bunch of bloodsucking scumbags!
Brie, I am torn. Part of me says don't pay, part of me says hey, the banks are bad but a lot of people are no better.
I have a suggestion. If one doesn't pay, then all the physical merchandise purchased should be donated to some charity resale shop. That way the person who bought a wide screen TV or a boat, or whatever that he/she could not afford, does not get the use of it if he she does not pay for it.
Well, the thing is, a lot of people have paid many times over for what they have purchased because of the usurious interests rates, when you figure that out, along with the criminal lobbying methods (see the movie attached) and the bail out money...to tell you the truth I wouldn't worry about them AT ALL.
I was on the road you write of several years ago and it was a slippery road, cash advance from one to pay the other, so caught up in the high intrest rates to pay for my own habit.
When I finally cut them all up and began to pay what I could it took me close to 5 years but I paid them all. Today I carry one card and rarely use it except for travel and I keep all my receipts and it is paid immediately before I even get an invoice.
Credit is a privilege, abuse it and the privilege is taken away.
Great Hub and I do pray for all those who struggle...
Blessings
Credit is a trap, a pit, a prison, I say don't use it at all.
Glad you could get out from under, so many people can't due to the economy now.
This is an excellent Hub Brie. Thank you for writing it, I am going to share it with a lot of people who, sadly, need this advice. But will greatly appreciate it.
Hi Brie, I am currently $39,000 in debt and I can't stop using a card because I need it for emergencies like for food and medication that costs so much money and stupid medicare doesn't cover it. I have two daughters and I'm a divorced mom who rents. I also have a full time secretarial job. I just can't make ends meet with paying these cards. I never used them for expensive t.v.s or clothes or anything like that. Ever since the interest rates went up on them I'm scraping by. I would love not to pay them at all.
Feel free to send this blog to whomever Moonchild, I know that there are a lot of people out there who don't know these things. Also, the books and the dvd's on the site are very good, I have read and watched them and they have some great information too. Thanks for commenting
Chinadoll: Eventually you will probably not be able to use those credit cards anyway, since you are just keeping your head above water. Every situation is unique, there is a lot of information on the internet which is where I found a lot of it. But, also I would recommend seeing your accountant..I did and he helped me quite a bit. Maybe with the health reform bill you will get the help you need and you won't have to use the credit cards any more.
I stopped paying. And they dropped the $23,000.00 and said, pay $10,000.00 and we will put your balance to zero. Saved $13,000.00 after 2 months of not sending a payment.
Congratulation, now if just everyone knew this instead of spending sleepless nights wondering what they are going to do.
Thanks for writing and sharing Mitch e-kid
Great article! There are a lot of people caught in the credit card trip, and your advice is solid. Thank you.
Thanks DonnaWallace.
I have 32,000.00 in credit card debt. I have 25,000.00 in cash. If I stop paying my credit cards will they come after me?
Thanks
I don't think so, it's an unsecured loan, but I would take it out of the bank. It's not the cash so much as assets that they could take. But, if I were you I would check with your accountant.
You are honest and to the point.Good hub.
what happen if they sue you
It seldom happens but if it does usually you don't have to pay the whole amount. Unless you are rich and trying to just get away with not paying the courts are sympathetic. If you know of any attorneys you can ask them...some will answer questions on the phone. That's what I did, I called around and found a nice attorney who just answered some of my questions.
After a while, the credit card companies sell off the charged off accounts to a middleman agency which then sells those accounts in bulk to attorneys, who then proceed to sue on those accounts. The real thing you need to look at is the prescription date, which varies from state to state. In Louisiana, where I work in such a law firm, the prescription period is 3 years on credit cards. That means we have three years from the date of last payment in which we can file suit. Once the three years are up, you are untouchable. If you are sued, and a judgment is taken, you are then screwed for many years. Even if your credit report looks okay, the judgments sit on the mortgage books and can interfere with future loans, home purchases or sales, probates, etc. What you are suggesting only works if the accounts do not end up in the hands of lawyers.
Milly: First of all, thanks for writing. Question: Will a law firm sue when the person has no assets?
Yes, we do sue people who have no known assets. If a person inherits property, a judgment will have to be paid out before that person can get the property. So, we get the judgments and then just sit on them. In Louisiana, a judgment is good for 10 years, then we revive it for another ten years. Different states have different time periods for how long a judgment is good. Judgments do not always appear on credit reports, but will show up if a title search is done.
I would think with all the defaults that are happening that a creditor would choose the ones that seem like they have money rather than the ones that don't have anything in the hopes that someday down the road they will inherit some.
An attorney's office is the end of the line for a credit card account. These accounts are purchased in bulk for very small amounts. A judgment means lots of interest and fees on top of the original principal amount owed. If a person had money and was interested in paying off an account, they would have paid it off long before it ever reached us. Attorneys are in this for the long haul, not a quick payoff. The longer a judgment sits, the more interest it accrues.
Well, they can't get blood out of a turnip.
Hi Brie. I certainly share your anger and frustration over what the banks have been doing. I also wholeheartedly agree that credit is a death trap and should be avoided at all cost. Like you, I WANT to "stick it" to the banks, but in my mind there is the basic issue of honesty. I can't bring myself to not repay what I have borrowed, no matter how much of a scum the lender might be. I don't want to be as bad as the banks....I want to pay them off and NEVER deal with them again. I'm almost there. Anyway, I just wanted to say thanks for the hub, I share your frustration, but maybe not your solution. I enjoyed reading it anyway!
I guess at some point, after they have charged 30 percent interest, I think you could say you've "paid" them back.
Anyone planning on waiting until credit card companies are willing to settle for "pennies on the dollar" should keep in mind that there are serious tax consequences for doing so. If you have $10,000 in debt and settle with the debtor for $1,000, you will have to pay state and federal income taxes on $9,000 of income. The IRS WILL know the amount you settled for vs what you owed because the credit card companies must report these amounts via a form 1099-Misc if the amount totals over $600. You could wind-up owing the IRS a lot more in taxes and interest than you ever would have owed on the credit cards. Unlike the credit card companies, the IRS WILL come after you. They don't need to sue you in court. They don't care how much or little money you have and can garnish far more than 50% of your income until your tax debt is paid off.
Mostly agreed (and completely about how you mention the 30% interest equaling sufficient payback, so long as this can actually be accomplished and people don't just jump into this without due caution)... but I don't think ten years of bad credit is all that bad. That price for bankruptcy just in effect presses home the point all of us should have been familiar with before accepting a loan agreement: credit is not good unless under very sure circumstances and also for very empowering benefits at the same time.
It's all hard, Brie, but there needs to be some responsibility, and there's nothing stopping someone from just living honestly and frugally for a time... it's suffering, but it's also something to learn from, I guess. Even with children and such, there are government programs. I think bankruptcy sticks it to the banks enough.
Throughout bankruptcy bad-credit years, there are other options arising. I wonder if you've heard of the Time Bank concept? As usual, community and family provide answers which most of us have cut ourselves off from. It's also a good time to invest in one's self in the sense of learning from life, education (even if just from clocking hours at the public library), and generally growing up (something which never really stops happening as we live our lives, no matter how stubbornly some of us attempt to resist it). Of course, for people to make the most of that, they'd really benefit from counseling.
ahh the credit card days... it took me 4 years (2000-2004) to pay off 30K+ in debt.. admittedly, i was an idiot... i like having stuff when i wanted it.. then one day i woke up and i was what? 8 credit cards and 35K in debt?
i cut them up and payed my bill online.. but i mean like 3-4x the amount due...
now i just have an atm card and honestly it feels really good to not be part of that system of credit
Milly is full of it! Attorneys WILL NOT sue a person with no assets. The atty. WILL investigate a person and see if they do have any sizeable/seizeable assets. Her judgement claim is equally FALSE. A judgement only comes after a trial which you lose. Even if you were sued (usually by the card issuer) they toss almost all intrest/late fees except for the orig. balance, courts know the card co's slap all those BS fees on and they NEVER stick! She is full of crap! The diabetic guy is equally full of crap, the IRS may tax you on the forgiven debt but will be a far, far smaller amount than the orig. amount!(this in NOT true of BK, IRS does NOT tax forgiven amounts in a BK)...BK is also a good thing in many other ways. You can keep an exempted amount of any home you live in. You can keep up to $1800 in a car's equity, which seems like little, but most cars are assessed at a low value which is offset by any loan amt remaining-you can keep paying on the car if you want. If you file a "homestead claim" in your county, you can be exempted for up to $150,000 in home equity- meaning they cannot sue you for it! BK will cost about $1500 but protects you in many ways. You CAN rebuild credit in a short time after the discharge (90 days after filing). But not paying/no contact works just as described. The Card Co's will beg you to pay it for 50% of orig balance...in this state, the 6 years does not reset after "contact" it is only reset if you pay ANY amount of the account debt! i am NOT an attorney- seek your own legal advise!
One more thing...don't listen to tools that think there is some "stigma" attached to BK or simply NOT PAYING! There is none, even Trump, GM, PG&E, your BANK have claimed BK. It is there for a reason, to give people a FRESH START! If you are afraid of some "stigma" don't tell anyone, nobody will know. Oh, and Brie, you're a hottie!
Woo Hoo! I like you juno! :) Thanks for setting the record straight, I had a feeling that was right but I didn't want to steer someone in the wrong direction in case I wasn't, such a touchy subject.
When should I contact the credit card company,or should I? I've stopped paying for three months now. Should I contact them now and see if they will negotiate the balance? or should I wait for them to contact me. I assume that if I am ignoring phone calls they will contact me via mail.
I have no assets, unemployed and owe 18000.00
Depends on when you want to negotiate. You have the power not them. I think I have the book "Debt Cures" on here, that's a very good reference book to read. I know people who never contact them, what are they going to do if you have no assets?
Again Miss Brie is correct. The card issuer will contact YOU via mail and will offer to settle for $XXX, usually 50% of the balance. BUT I would not do it. For anyone with these type questions go see a BK attorney, they generally will not charge for the consultation. I am not an expert but know much of the subject. 1st thing, if you make below the median income (here it is $52000) you CAN claim BK. It is easy, you can keep most things you have within limits (which vary state to state). Many people do not need BK as they are JUDGEMENT PROOF, as in if you are disabled, have few assets, etc. The creditors WILL NOT SUE a broke person, it serves no purpose! You CAN do a BK and retain your home, car etc (with limits on the equity you have). In almost 100% of BK's they are NOT CONTESTED and it is a simple hearing (in an office) and 60 days later it is discharged. If you do not want to do BK, just DO NOT PAY and challenge the credit reporting agencies info every 30 days. The creditor reporting has only 30 days to respond, if they miss that, the debt is gone/off your report by law. With many people doing this they are overwhelmed and often cannot respond to the inquiry in time! Just DO NOT PAY or you reset the (I think it is 7 years) clock on their ability to collect/report. For Indebt, $18000 is not enough to claim BK, I mean you can, but not worth it. If you do want to do a BK, sell any cars with over $1800 equity and pocket the cash. You cant sell to your brother! Liquidate anything of value except house, check equity limits and be sure to fall within them. A BK attorney will tell you all of this for free at the consult.
Thanks June, I love fans like you! :)
I agree with you Brie,I was downsized over a year ago.The bank raised my rate after the credit crisis.I tried to talk to them, but to no avail.So in protest I have not paid my bill with them. As more info has come to light and my unemployment continued,I am feeling like I have done the right thing.With the bailout, banks a reaping high profits despite my not paying. So I think they will be alright.I encourage everyone to follow suit and get your own piece of the gov. bailout.I have been paying off other bills and am preparing for my $10.00/hr job in this economy.Also cutting my overhead living expenses,per your suggestions.Now I can live on a lower wage.Not planning any new big purchases for at least 5 years.And then will only by second hand as my protest against corporate america`s greedy policies.Goodluck to everyone, I hope my post may help someone survive.
Thanks for writing Mark. I think the only people who would not agree with this post are those who really don't understand the evil manipulation of the system. We are not in Kansas anymore and we have to adjust to a tyrannical system...the quicker you do that, the better off you will be. The people who believe we are living in a normal system will be the ones who end up paying the criminals the most in the form of higher taxes, depleted IRA's, dollars etc. Good luck to you Mark and please read some of my other posts that give advice on how to live in these days.
Hi Brie,
Been reading this thread and just had a few questions. I am retired (68) on social security. That is my only form of income. I realize that I am in a credit card crisis, with 3 cards and $19.000 in debt.
To help I have moved in with my daughter/gkids and we share some of the expense. Through medical issues (disabled for 7 years prior to retirement 65 - heart) and get this 17 angioplasties. Can't work. And can't pay cc debt.
3 attorneys have told me just to not pay. That bk would be foolish at my age, seeing that I have no assets. Foolishly I took a load on a small life policy to send to the cc company and now can't pay the yearly interest. Current cash value will pay it for 5 hears.
Just looking for your opinion. I will default on all three cards July. What can I tell them other than I can't pay and it is a treadmill. Credit score is 850, but I am not going to buy anything needing a loan.
Thanks for you comments.
That's all you should tell them, that is if you want to tell them anything. Get the book "Debt Cures", (it's offered below the comments) if you can't afford to buy it (which I would recommend because you will refer back to it) then get it from the library if they don't have it ask them to order it. It's a great resource. Make sure they don't have any telephone numbers, don't GIVE THEM ANY FURTHER INFORMATION! They will call and harass you. They will want you to file for bankruptcy but as far as I can see there is no benefit to you to do that. It must benefit them in some way (which is reason enough not to do it). But, also it costs money to file bankruptcy and it's on your credit record longer than a stop in payment. Whatever you do, don't talk to them after the one time and DON'T give them any more money, every time you give them any money the clock resets. If you have a land-line, disconnect it. Get a cell phone and only answer the calls that you know, if you don't know who it is don't answer. If you mistakenly answer it and it's a collector hang up. Ignore all letters that say that they want to mitigate the debt, just throw them away. If for some reason they do decide to sue you (which I highly doubt) then go to court and explain your circumstances, the courts are usually sympathetic and nothing will happen. Depending on where you live, after a certain number of years the debt will drop off (the book will tell you how many or you can ask your lawyer..it depends on the state). They won't sue you because you have nothing. Your credit score will plummet but who cares. Save any money you can for emergencies. I just wish others would do this before they give the CC companies all the money they have and then have nothing to live on. The CC companies are pure evil as far as I'm concerned. The banks get all the bail out money and we are left with nothing. Good luck to you, you will feel better after this is all done. And don't feel bad, there are many of us out there.
I know that you write for a living and everyone is a critic….but Brie, hard to believe that you are only speaking to the populous that is out of work when you justify everything by "are the same BANKS that stole millions of dollars in bail out money using a ponzi scheme" Great logic Brie! You should be ashamed of yourself, as you appear better educated and you know the difference. Happy to dive into this subject, but that’s another discussion.
No one forces people to use their credit cards. Most can’t live within their means, this is what is at the heart of most of the credit card debt. I agree with helping the jobless, but you realize that the majority of the people that will utilize this strategy will not be jobless.
It’ll be just more people trying not to be accountable and scamming the system, costing us ALL more in the end. Thanks Brie. Nice service to the betterment of society. Be more responsible, if not for your own ideologies, for the others that have to keep cleaning up the messes that these irresponsibility’s create. The Americans that live within their means, care our jobless friends, and will have to now work harder to make the difference up.
You know Rob if things were on an even playing field I would agree with you but I've got news for you THEY AREN'T! The Credit Card companies have all the cards, they have all the high powered lobbyists, they have government in their pockets, they charge usurious rates and lull people into debt. Yeah, it's easy to say oh "people are living above their means" when the entire economy has been systematically imploded by these very banks...No, I cannot agree with you now...to many banks have stolen too much money at taxpayers expense. I say if you can't pay them DON'T pay them and give yourself a bail-out, why not Congress is doing it for the rich!
You probably work for one of these traitorous banks!
Oh and btw, I don't write for a living; if I did I'd be homeless!
Well at least you posted my response, which I consider honorable, and fair. This at minimum shows respect for opposing positions, which is very cool of you.
No I don’t work for the banks. But, I don’t agree that they are any worse than any of the other established institutions and our government is much worse considering that they are suppose to be “civil servants” Everyone that uses a credit card has a choice. A choice Bri, they choose to spend, just like the government. There was predatory lending and borrowing, and everyone knew it. The credit extended was as bad as the credit borrowed. Yet the choice was made by cardholders to spend. But if the logic that you laid out applies, then it dictates that we should all stop paying our taxes? I do work, and I work very hard. I pay taxes and I pay my debts, and I live within my boundaries. I’ve been terribly poor, and now I’m comfortable. Yes is easy to say people are living above their means, because they are, were, and continue to do so. Bri. Do you really think that these losses won’t be absorbed by hard working people?
Obama claiming to punish the banks, is a total sham. Banks will make their numbers, and they’ll charge the hard working, honorable people for it. Most of the people that use your advice, will be screwing the rest of us, not the credit card companies.
I can understand why people would think the Rob works for a bank. People on here are talking about not having the money to pay or having to make some very difficult choices. People are not like, "hey, let's screw the credit card companies so we have some extra money for drugs and hookers".
NO Rob, there are a great number of people out there that have no choice! THEY HAVE NO JOB, NO CHANCE FOR A JOB AND NO WHERE TO TURN. They have been ripped off by government and by the banks (in the form of illegal bail outs and taxes and interest and fees). Count yourself lucky that you have no idea what I am talking about but there are people out there, Americans, who have worked there whole lives that are becoming destitute. Read my blog: The Unemployed.
The vast majority of people that will use this advice, will, did and do have a choice. The current unemployment rate is 9.5%. Less than 10% of the population. Of the 10% that you are speaking about, those that have no job or are in dire straits, deserve the break. I never disputed this view. But 90% of the people aren't unemployed, and will be the majority of the people passing us the bill. I also disagree with "no chance for a job" everyone has choices and chances. I hope their chances increase. But as far as choice is concerned, PEOPLE CHOOSE TO CHARGE! instead of pay. Brie now that the card companies are public, Master card and Visa, this information is available. Take a look at who is using this advice, it's overwhelmingly not the unemployed. Those of you that are unemployed, use it, those that aren't show some damn accountability. Lack of accountability is what got us in this mess and will continue it.
It wasn't lack of accountability that got us into this mess it was outright tyranny by our government and the people who really run this country. BTW, the unemployment rate is a lot higher than 9.5%, what do you do take get your information form CNN or Chris Matthews? I think you are very ill informed.
Bureau of Labor Statistics
http://www.bls.gov/eag/eag.us.htm
If you know of a better resource, please advise.
It was lack accountability Bri, if it wasn't then most of those "tyrants" would be behind bars.
And boy we can sure trust the government can't we!!!
Oh well, Rob, you seem to know it all and yet you know nothing. There are none so blind as those who will not see. No use talking to you.
Bri....I expected more from you. I gave you a good resource (as requested) and arguments to back them up. I do not know it all, but I am well educated and informed. I just wanted to provide another angle for you and others to consider from what I've learned. I've read some of your other pieces, you are a great writer, with passion and great insight to share, keep it up.
Unfortunately you've bought into the system of slavery. The government we have now is a criminal government, they don't play fair and so I don't think we have any obligation to play fair with them either. They are systematically bankrupting and destroying this country and it's citizens, we are not being run by the people for the people any longer. You write as if everything was hunky dory and it's not. You give me back up from the same government that is raping and stealing from us, what kind of back up is that? You need to take the red pill before it's too late, maybe someday you will wake up. I find it incredulous that anyone could still buy into the lies that this government stands on.
Brie...this article was about "Advice for those who Can't Pay their Credit Card Bills" Not the government.
But if you are seeking an opinion on the government, well I agree that the government is a HUGE problem, as are entitlements, budgets, deficits, and waste. But we made them this way, it's up to us to change it. We start by making our voices heard and everyone accountable. Slavery is taxing the wealthy, because they are wealthy, which is destructive and a sin (envy). 85% Millionaires are first generation, meaning that they bought into the idea of working hard and capitalism. There is nothing wrong with capitalism. Extremism is bad in any form. Taxing those that did well, based on hard work is wrong. A straight % for everyone, is not only fair but needed in order to stop class warfare. As it will help defeat the base of the governmental taxing initiatives. What certain people think is a utopia. Everyone needs to pay their share, and looking at the numbers, the middle class and wealthy are supporting everything. We need to get back to the basics of hard work, accountability and common sense. No I haven't swallowed anything. Please do not assume that the discussion that we were having, pertained to how I felt about the government. You can clearly see that it does not.
What you don't seem to understand however, is that the BANKS are the government now.
I tell you what Rob, google and watch the movie the Money Masters, then you get back to me, ok?
Pete Wu, I would be glad to approve of your comments if you take out the profanity.
Why dont you recomend calling NCCCA (?) the National Consumer Credit Counseling Agency for Clients to call to get approved agencies, like Greenpath (I used to work there)who are totally honest and responsible. I am no longer affiliated with them but do believe in them. They used to have a maximum of $50 a month handling charge. I have heard the horror stories about the kind you reference in your articles but GP is not one of those.
I have had nothing but bad experiences with credit counseling companies which is why I don't recommend them.
Dear Brie- After reading this, I have some questions. My husband had a credit card that was in his name only. He defaulted on it after we got married. He lost his job and my income was enough to keep our cars and home. He called the credit company (also his bank) that said they would forgive the debt and it would look as if he filed bankruptcy for the small amount.
Now, almost three years later, he recieved a summons from a company claiming they have rights to the debt, as well as his "immediate need to pay". He called and spoke to the company. They told him they could (and would) come after my home. (he is not on the title/mortgage/anything). I know that he needs to respond to the summons, which he is doing on monday. He is asking for proof of the debt, also. Is there anything else he can do, or myself to stop them from taking my home, even if the debt is not mine?
Other advice is welcome also. I am worried he will be arrested as we live in Minnesota, which has had a recent string of judgment arrests. People failt o appear to pay judgements and judges issue warrants for the arrest. Their bail is the amount due to the creditor.
Do you have anything in writing to prove that the original company said that they would forgive the debt? If so bring that to court. However, even if you don't the chances that the collection agency has proof of ownership of the debt is very small. Let me know how it goes. Also, don't believe the collection agency...they will lie and say anything to get you to pay.
How much is the debt? If I were you I would talk to a bankruptcy lawyer...just be aware that it is in their best interest (ie money) to have you declare bankruptcy...so either find a relative or someone very honest and I would get more than one opinion.
We never got anything from Wells Fargo even saying there was a late payment. As far as it being on his credit, it is declared as a bankruptcy.
The debt they are asking for is 2500+ dollars. I wont declare bankruptcy. I have decent credit other than medical bills, which are being paid. His limit was around one thousand and he never maxed out the card.
The Link included is the story of the guy in MN who was arrested for filing to appear for a judgment. Similar to debtors prison.
http://www.truecrimereport.com/2010/07/debtor_robe
Other than that, how do I word the letter asking for proof? just as a letter of demand or do I include it with the response to the summons?
Credit card debt is unsecured debt. I don't think that they can put a lien on your home. Please call an attorney to make sure that this is the case in your state. If this is the case then it is illegal for the collection agency to say this to you.
Check out this link: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cr
I think you are being lied to by the collection agency.
As far as the letter goes...what I would do is to call someone at the bank because a letter can take forever. Explain what happened and see if you can get someone at the bank to look into it. However, you probably don't even need to go that far because it sounds like the collection agency doesn't have a leg to stand on.
Erica, I did check out the link you posted and the guy was arrested for failing to show up in court NOT for the judgment.. an important point.
An awesome blog Brie, whose advice i am sure has eased many people's minds. I always find it odd how it is quite acceptable for banks to legally thieve such a huge amount of money off people and yet folks leap onto their moral high horse when a handful of people, lacking the means, refuse to pay back their credit cards. So many people live in fear, and it is only by having the courage to not pay that you learn that there is not much that the banks and credit collectors can really do. To those respondents who blame the people who take out a credit card in the first place, do you not also blame the incessant, ubiquitous advertising - not just for credit cards but for consumer goods - that makes obtaining hideously overcharged credit cards so acceptably easy and that creates desire for commodities we really don't need?
Thanks for the encouraging comments Adam Smith...as this blog gets a lot of flack from people who don't have a clue.
Out of a job, limited incomes, etc....I just stopped paying and never answered the phone as well. Send letter and tell them everything has to be sent via mail. Then I waited...2 1/2 yrs until a process server showed up at my door. Then I called and offered 30 cents on the dollar and they didn't even blink. $16K in debt reduced to $4800 paying over a year. Sweet. Credit rating will get restored in 3-5 yrs just when the economy rebounds.
Good for you John.
I had been living on credit and then lost my job. I stopped paying bills and do not answer my phone. So far, it has been two years, some of my debts have been written off, the others are still calling.
Good luck to you!
What ever you do, DON'T TALK TO THEM. If you talk to them, you will be giving the credit card companies or banks the advantage and you will also besetting the clock back to zero on the six years.
Brie, you're making a good case for people to SEE a LAWYER and for Gods sake, don't go giving advice you have no clue about. There's no such thing as "Resetting the clock" Secondly, a BK for most people would cost about $1,000-$2,500 not this THOUSANDS you're claiming. Your advice would make a collection lawyer laugh too. Sure the collection agencies cannot file a lean onthe debt UNTIL AFTER THE JUDGEMENT and then it's "Katie bar the door" as they can legally get the law to force sale of ANYTHING.
Next time you write somehting like this, consult a lawyer..Sheesh
Well, people can take your advice or mine. If they talk to them they are at a disadvantage and may be giving them information that is being recorded and can be used later. Maybe it only costs $1,000 to $2,500 (which btw is technically "thousands") in your area but in Manhattan it's much more. The collection agencies can file a lean on the debt but if their are no assets they are not likely to do this.
BTW: I did contact a lawyer and an accountant and I stand by my advice...you on the other hand probably work for a collection agency.
Wow.this is really get me a very useful info though, I almost to think to have a credit card for online shopping, but I agree that the disadvantages are much more that the advantages. I think to get a debit card is more safer.
Yes, anything that you are not paying interest is better! Interest = slavery.
question.... i was just laid off, and being 60 and 20 years at the job i had, i will find it doubtful that i find another...
so this is the question,, i have no credit card debt, i do have 35k in a second mortgage... my thought is this what if i just use my high max credit cards take 10k from each and payoff the 2nd mortgage... what would be the CC recourse.
thanks
If you do that, it would be credit card fraud..and THEY would know and probably prosecute.
The massive lawsuit against Wells Fargo / Wachovia, Indymac / OneWest bank, Citibank, Bank of America, JP Morgan Chase, GMAC..............can actually put a stop, not only to your foreclosure, but also to your house payments............
The truth is they will sue you even if you owe a little but..... if you make less than $453 a week then they can kiss your ass (not sure about the exact amount cause it's 2011 now and it may have changed). I know this cause my dad filed a bankruptcy in 2003 and now he wanted to file another one. He lost his job, blah blah. Then he found a parttime job, $1000 a month gross, barely to pay rent and food. He got sued over $3,000 !!!! So he went to court and before the whole case hearing thing a worker from some organization ask him if he could afford a lawyer blah blah, he said no, so she told him that they have voulenteers that know law and give advice. They told him that if he makes $453 a week (I am not exactly sure about the amount but that was about that much, I might be off a little) then the c-card company can kiss his ass. They could ask court to auction off my dads car but only if it's worth more then $4,000. Well, he's got a 17 year old escort worth.... hmm, not much more then the new battery that he put in it so he took the advice. And indeed, the credit card company wasn't able to get any money. Not that it's a great thing to do, but when you have to choose, food on your table or paying off credit cards (most off it was to buy food, etc, my dad doesn't even have a TV) then you gotta do what you gotta do.
Truth is anyone can sue anyone...doesn't mean they will and it doesn't mean that they will win (as in your Dad's case). Thanks for the comments.
Terrible advice... really much better to file for bankruptcy if you can't pay. Ignoring the bill collectors and hoping they will go away will end up with a bunch of judgments against you from a court (yes, even if the amounts are low) and that is MUCH MUCH worse than a bankruptcy on your credit report.
I disagree and know of many people who have done this successfully. You must be a bankruptcy attorney!
Thanks for the advice. I am in the exact position that your are talking about. I am retired, have only socia secutity and an indepentent contractor job, and mountains for debt. I have not paid a cent in two years, or answered any calls. I appreciate this hub.
Thanks Susie Duzy...you should take a look at some of my other articles, you might benefit from them. Good luck to you!
Great hub!!!. You are absolutely right. I checked with a bankruptcy lawyer for a free consultation, and he said the same thing. I only wish I would have known this before giving 8k to a consumer credit consolidation service, which i eventually defaulted on.
Thank you
Those Consumer Credit Consolidation Companies are nothing but scams. Thanks for writing zduckman...please post this on your facebook and get the word out!
Great deal of troubles here ..my spouse, we have been separated 2 + years ..but now i live on the same property although as unmarried in the state of MD, by MD law with a marital settlement agreement ..MD law states after this amount of time married it is a 50/50 state ..he cant nor can PNC take away my 50% equity ..it is mine we cant sell at this time for property values have fallen ..would leave us with no place to go especially me and very little to go on we are both amicable in our seperation...i lived in the south 2 years but could not survive so we split the home and both live here as per our agreement seperate and apart ...PNC has threatened to foreclose ,...will not work with him or both of us ...wanting all the fees and back mortgage payments ( they told him to apply for Hamp he had to stop making payments ) i know now this is not the case ..as i have involved myself to protect my right as owner of the property but never filed docket last year ..the loan is Freddie Mac owned and PNC is the servicer ..when i asked them to produce the note it is with former servicer National city Mtg..it looks to be altered and is a COPY ..not the original ...they harrass and tack on debt which all started when spouse went inot HAMP he was denied and Hamp confirmed unlawfully by their rules just last week ...On the 13th of March all banks were ordered to cease and desist on forclosure and all other activities against homeowners ..they refused to accept payment from spouse for over 1 year and kept him in loss mitigation...racking enormous debt...he is at a loss ...another pickle in the pot ...He is on the loan we are both on the deed ..they kept asking me to sign off the deed which i refused at my attorneys advice ..I have been living off a small amount of alimony ..Why didnt they ever file a docket to forclose...the intent to forclose letter was sent last aug 2010..the only attorneys that want to get involved want to represent my spouse not me ..cause he is the borrower ...i was supposed to be the borrower as well and in original mortgage papers the home was to be titled tenants by entirety NOT Joint Tenancy as we now see on the deed...kind of funny to me ... a bankruptcy attorney is ready to jump on this ..i worked 32 years in this marriage and for my home as well and I AM ON THE DEED so what can they really do ???
real estate attorneys dont know what to do or want to represent him !!!! NACA was one i contacted ...any advice would be helpful in this matter ......as well as the discover card that just filed docket on me to sue for 2,900 i dont owe all this ..last year when seperated i was making my required payment plus 10% ..then they told me i HAD to double payments their new rule i could not pay and negotiating with them is like trying to negotaite with PNC..this card was closed by me last year after they did this ...it was also used by my spouse( authorized user ..it had not been used at all in well over a year ..then i closed it ...someoen came here to try and serve me today but i was not home ..HELP ..all due to loosing our business in 2008 ..my spouse is able to make the original mortgae payments as he aquired a good job ..but PNC refuse to negotiate ...NO more MODS they have drug this out to extremes ...so why wouls they not have forclosed by now ..new laws only came into affect on April 13th 2011 telling them to cease an desist ...HAMP violated them for pulling him out of the program on a missing doc ..that program is well over a year old now ...with he being borrower us being deeded joint tenancy ..and the note looks altered ...CAN THEY forclose ??
What can i do about Discover ..sorry i know allot of information ..thank you for any help you can offer
VS
First of all, don't worry about the credit card people...there is nothing they can do..so what if they sue you, so what if they even get a judgment, you don't have the money. Just go to court and explain...in all liklihood they won't even take you to court, if they do the judge will be on your side.
Regarding the home, they have to have the original note..so just hang tight. I would get as much information as possible because I have heard of cases that if the wife was not on the mortgage that the banks could not foreclose. Read this: http://www.hadd.com/node/2409
I am not an attorney but if I were you I would just hang on and go through the process...look up the information I have on stopping foreclosures and talk to reputable attorneys (most will give you free information). Don't panic.
Brie, you excel!
I learned this many years ago, NEVER speak to the banksters and never feel bad about not paying them if you cannot:
Proverbs 3 27:28
Withhold not good from them to whom it is due, when it is in the power of thine hand to do it.
Say not unto thy neighbour, Go, and come again, and to morrow I will give; when thou hast it by thee.
So IF you can pay them, do so, you took the debt, it's yours, HOWEVER scripture is a double edged sword, so IF YOU CANNOT pay them, you have no obligation to do so UNTIL you can.
If we keep trust in God, He will provide ALL our needs, but maybe not banksters wants!
You are doing VALUABLE work here.... keep going!
John (aguasilver)
Thanks John, I'm not so sure we should pay them even if we can though...since most debt is (at least to me) fraudulent these days. Best not to go into debt at all. But I don't see how paying these thieves helps. So many are in debt...not because of what they have done but because the Illuminati have stolen their jobs or caused them to go into debt. Moreover, they have taxed us illegally (without representation) for decades now. They have perpetuated illegal wars and encumbered us with national debt and inflation. So why give them more money? I'm just asking.
This is so on pointe for me. I have no assets, lost my job, lost all of my savings, and 401K, I have nothing. I have not been paying my credit cards for the last two years. I have gotten settlement offers, never, ever answer the phone. I have been making some money as an independent contractor. Can the garnish any of that?
Not if they don't know you have it! Read my related articles about debt.
I agree with everything you said here. Great information, thanks for sharing. Voted up and awesome!
Thanks Applecsmith.
Yes, we are living in a tough time. Our expenses, including food, go up tremendously. My advice is buy only those items that you needed rather than those that you wanted. Limit your credit card usage. Use it as if it's cash in your wallet. If we choose not to pay our credit card debt, what do you think will happen to credit card rates? They will only increase, which none of us wants to see. I did enjoy reading your hub despite the fact that I disagree on not paying your credit card debt.
We are living in an economic war and I have to say the criminals are winning..if the poor and the struggling middle class can keep some of there money rather than pay out the usurious interest that the banksters are charging after getting a 700 billion dollar bail out..more power to them!
Amen sista! Thank you for all that you do and for all that you are doing. So many people in horrible conditions right now. Only people to thank for this astronomical chain of events is our sorry lyin, cheatin, cold dead beaten, two timing double dealin, mean ass government! Behind you 100% and two thumbs up on your blog. Amazing job!
Thanks Sunshine, you made my day!
Hi Brie, I live in california, and I am being sued by cap one for non payment. My husband and I live on retirement, ss and military, and we owe more on our home than it is worth. I know there is not much they can do there but can they come into our home and take our personal items?
No, they can't Mick01...they might be able to go into your bank account though..so I would clean that out and keep it low.
If you want to save some money without a trace buy silver coins and hide them.
Hi Brie, Can they take our bank account even though it only contains our ss and military ret? Thank You for your help Brie.
No, but I would still keep just what you need in there...better safe than sorry.
Thank you Brie, I feel a better :)
You never know when they might change the laws.
This is a great Hub - thanks for taking the time to share this information! I feel like a lot of people in bad debt situations are not aware of their options and are maybe unsure of who to talk to...hopefully this will help a lot of people!
I hope so, that's why I wrote it. Please feel free to repost it on facebook, thanks for writing LittlePayday!
Hello Brie, I am scared. I was Googling 'what happens to people who can't pay their credit card debt' and I found you and still am not sure that your way is the best way, so that is what lead me to write.
At this time we are approx. $30,000.00 in credit card debit to a handful of credit cards. My husband is in the construction industry and due to retire in 3 years and I am battling an autoimmune disease and draw Disability monthly. This all started when my husband's work started to drastically slow down a few years ago. We were doing okay until we could no longer afford Health Insurance and well, due to poor past spending habits on my part and being scared to live without Health Insurance due to my illness, I would charge our Health Insurance premious monthly and needless to say, that was not a smart move on my part. We are now without Health Insurance and have been for some time, I can barely afford my medication. My husband is off of work more than on and he draws Unemployment when he is off. We are current on our home mortgage and we have equity to pay our credit card balances but unfortunately since we are delinquent in payments our credit scores have dropped and no bank anywhere will give us a home equity loan or refinance us.
We contacted an Attorney to file Bankruptcy but we have too much equity in our home to do so, so we can't. Honestly Brie, we don't know what to do. Everywhere we turn we run into a brick wall. I tried in the beginning to talk to our Creditors and explain our situation and many of them have been nice and worked with us as far as lower monthly payments, lower interest rates and excusing fees but two of them have not and will not work with us and they're the ones that call us constantly and now today I've received a letter from an Attorney in Mass. stating that we need to "pay up" the full amount due. Does this mean a lawsuit is on its way shortly? Will my husband's unemployment be garnished? Will they place a lien on our home? What will they do and what CAN they do?
I'm sorry Brie for the long "letter" here. I am at the end of my rope. We have considered borrowing from family but how are we going to pay them when we can't even pay our creditors and I don't want to be indebted to family either. None of our family members are wealthy by any stretch of the imagination.
Please help and thank you for listening.
God bless.
And we live in Missouri if you know how laws work from state to state regarding issues such as this.
Again, thank you for your time.
Hello Wit's End: I'm so glad you wrote. They CANNOT garnish unemployment and they cannot take your home. They can sue you but so what if they do...if they do sue you go to court and say exactly what you just said. They most likely will not sue you and that letter you received may be just a threat. If I were you I would just throw it away! Quit paying these people. Don't borrow money to pay them just quit paying them..they are a bunch of thieves. There is really nothing they can do. I wrote another article here on hubpages about filing bankruptcy..here it is:
http://brie-hoffman.hubpages.com/hub/Read-this-BEF
Read it..then write to me using the contact button up on the upper right hand corner and if you need more guidance I will help you as much as I can.
Really, they are just trying to scare you, don't let them. DON'T USE YOUR EQUITY TO PAY THEM! DON'T BORROW MONEY TO PAY THEM! DON'T SIGN UP WITH A DEBT CONSOLIDATION COMPANY!
Please read some of my other articles and watch all the videos and read all the links...the information will help you.
Don't worry you are not alone...don't freak out, everything will be alright. Oh and don't answer your phone unless you know who is calling. If you do happen to answer and it is a debt collector hang up on them.
Thanks for the advice Brie, I bet this hub do give lots of help for those in need. I am blessed that I don't use it at all...I would definitely share with others your advice.
Great, thanks...I need all the help I can get!
Hello again Brie, I've been thinking about all of this and about what you wrote in response to my post and I did block the credit card company's phone calls on our phone until I know for sure what we need to do. We are in debt to Capital One for almost $13,000 and to our bank's Visa Card for almost $7,000; there are several others but we have been managing to make the payments to them as they have been actually trying to work with us and have been kind about doing so. The other two - not so much. How much does a person have to owe on a credit card for them to take the necessary steps to actually sue?
I guess my question is, how did you come to this conclusion to just "stop" paying? Have you been there and actually done this method yourself? Do you know what the procedure is for when a credit card company sues someone? Have you been sued by a credit card company yourself?
Also, what do you think of when a credit card company contacts you and wants to settle your balance for much less? Do they contact us or do we contact them? The reason I'm asking this is because we are thinking of selling my car (it's 11 years old, not worth much) and some other items and were hoping that maybe there would be enough to settle this whole thing. Your thoughts?
As I said before, I'm scared. I wonder what is going to happen next if we keep ignoring their calls. I honestly don't know what we are going to do from this point, I guess it just feels a little comforting to actually talk about it here. Odd I know.
Thank you so much for all of your information and your input. If we continue to follow your advice I will keep you posted on how everything is going.
Again, thank you.
Contact me using the contact button on the upper right side of this article.
Brie,
First of all, my complements on an excellent article and excellent understanding of what is going on in the world today. I am currently strategising on my credit card debt approach and would like some third-party input:
I am in a better position than most on here to repay my debt. I am $15,000 in CC debt and with my current budget I pay about $800/mo and will have it paid off in two years. This is about as fast as I can do it, and thus it leaves me without a lot of backup savings (which would really suck if I lost my job). I would like to know what your approach would be to this situation:
1) Continue to pay down as fast as possible thus paying the least in interest back to the bankster criminals.
2) Pay less (maybe only $500/mo) and save the remainder as emergency funds AND/OR for getting preparded for SHTF. This way if SHTF in a year I will at least be more prepared and can just stop paying the rest of my CC debt. However if it doesn't, it will take longer to get out of debt and cost more.
3) Another approach...
Brie, please consider this in response to my previous post:
As on add-on to my previous comment, I've run the numbers and the costs of my using Option 2 (paying $300 less and saving) are an additional $2,250 paid to the banks in usuary (if I were to eventually pay it off) as well as extending my lenght of CC indebtedness from 2 years to 3.6 years (if the matrix remains operational for that long).
Well, definitely #2 but if you read some of my other articles you will see that I think you should just default on it all together (if it is unsecured debt) and save that money because it wont be long now before the SHTF! And..buy silver and storable food with the savings!
I would certainly like to default altogether, however I am hesitant since I think they would not have a problem showing that I have the ability to pay it (then again, I doubt they could show the proof I needed to pay it).
I have been buying gold,silver, and storable foods (albeit slowly) for over a year now so I am with you there! I think I will try option 2 for now and see how well I do making sure the extra cash goes to the necessities (food,silver etc.)
Thanks for your input!
Your welcome, good luck to you!
Brie, I have had good credit for yrs. the last 3 yrs my job has cut my hrs in half.Which forced me to max out my credit cards, about 16k. I have been paying them, then I have to use them because they took all my money to pay them. This has been going on for 2 yrs now. I am getting knowwhere. Im thinking of stop paying them. I have old truck and rent,thats it. If I get sued. can they take away a inheritance I might be getting in the future? thanks
Yes they can...so make sure that the inheritance is given to you in cash or you may be able to have it put in a trust fund so that they can't get it. Check with an attorney.
So stop paying my cards is ok. but if I cant get inheritance, why do you say stop paying credit cards? I am very confused. does the attorney take it out of my inheritance? if sued. I dont want to keep paying credit bills , they are rippimg me off. and there is know way I can afford it. I need to pay late taxes this month
Try to see if you can get your inheritance in gold, silver or cash..ask the attorney. Explain your situation. If you can't then they may very well go after your inheritance.
Brie, what do you do if you own a home and still have these same issues? My debt to income ratio is so high that can't get a home loan modification and the mortgage is too high for a loan. Our household income to a big hit the past two years too. It sounds like if you own a home with any equity, this could be a bad situation to try and follow your advice. I have not stopped paying the credit cards, but are still using them to pay utility bills, medical bills and other necessities. Is there any way to make this work for me? I am going to put the house up for sale, but who knows how long it will take to sell it. Thanks.
Rick: I have written to you directly, check your email.
Thanks so much Brie for all the help you ideas you have given me. It really helped to ease my mind and give me a plan, that I would never have thought of. You are a real gem.
I'm so glad Rick, good luck and God Bless.
Thank you so much for this! I appreciate hearing some new insight.
As of August last year I became really depressed due to a marriage breakoff (she didnt want to get married) and took stress leave but eventually left my job and was unemployed for 6 months before returning to the same job. Since that time I couldn't pay my credit cards and lost my cell phone.(I was able to get it back when I got my job back) I wonder now, what should I do? I tried to setting up one of those evil credit plans but was unable to pay that either. Since then they keep calling like 4-6 times a day non stop. I have gotten a second notice for full payment. I owe roughly 10,000 between a bank loan and credit card. I am Canadian and need some serious advice as to what to do next. I'm very young and do not want to consider bankruptcy, but is garnishment any better?
Ryan, I really can't help you as I have no idea what the laws are in Canada. If I were you I would call bankruptcy attorneys there (call several so that you know you are getting correct information) and try to determine what your best course of action is. In the U.S., we have the statute of limitation..so after a certain amount of years you are off the hook. It's usually better than filing for bankruptcy. But, I don't know the laws in Canada so you will have to find out yourself...sorry.
No worries :) Thank you.
When I started college in 2004, I applied for a "student friendly" CC. Basically, that meant the same rules apply and you just have a lower limit. I used it for a very brief time and maybe had $500 charged. I paid off about half of it and then stopped when I was just totally broke and unemployed. Eventually, they sold my debt to a collection agency who called constantly, left threatening voicemails telling me "This won't go away." They even called my parents house, resulting in my mother going into a panic and paying it off, claiming that my credit would be forever ruined. The threats they made could fill a novel, but looking back on it now, I realize the majority of them were just fear tactics. All over $200! That's disgusting.
I also have a cousin, who teaches at an inner city school in North Carolina, makes very little money and had built up some debt. She had avoided creditors calls for the 6 years. She fully intended on paying them off originally, but when the threats started, she simply told them "I have nothing." She paid the companies that were willing to work with her and wrote off those that were not.It worked and her credit may have been damaged for a few years but it didn't have much impact on her life and her credit is fine today. As far as MORALS go, threatening a school teacher or a college student who have NOTHING,for repayment of small loans given by millionaire bankers? I should feel guilty? Please. They are lucky ANYONE pays them back now and they should be willing to take what they can get, when they can get it.
She claimed Discover Card was the worst to deal with.
Thanks for sharing your story Tyler.
Hi Brie,
First of all I want to thank you for all your advice so far. It has really helped me in proceeding with my issue. I do have something else to run by you, and you may think I am crazy, but...with business equity line of credit now hanging over my head, as you already know, I was thinking that if they do get a judgement against me and then put a lien on my home, that would be a real problem. What do you think about the idea of seeing if I could get an increase on home current home equity line of credit and then paying off my credit card debt, I know how you feel about that, but please hear me out, and thus reduce my overall monthly payments right now by about $215.00 per month and then increasing my mortgage payoff by another $10,000 to $15,000? Then I take the money to partially live on and invest the remainder in gold or silver as you suggested before.
This would increase my mortgage amount and reduce what would be left over if I sold my house and possible leave Wells Fargo with so little to get, that they my back off on the lien.
Do you think this is crazy idea? Please let me know what you think. Rick
If you do that and you run into trouble and can't pay ..they will foreclose on you.
Hi Brie,
Well, I started the process of not paying the credit cards. I really had no choice, but as I see the payments increasing when each card comes, it's a little scarey. It's been two months on some of them and one on the others. How long before I start getting the phone calls? I imagine this is already having an effect on my credit rating, but I knew that going in. I guess it is only the start, but I had to make this choice. Judging by all the others that have commented, it will get better.
Hi Ricktm1949: I'm surprised you haven't received the phone calls yet. Just don't look at the bills when they come in, throw them away and don't answer any calls that aren't screened so that you know who they are. It's been almost 4 years now for me and I no longer get any phone calls or letters.
Hi my mother-in-law owes $9,000 worth of credit card debt and she only works 15 to 20 hours a week and simply not pay them..The only thing she owns is a car that is paid for...What can they do to her if anything?
Any help would be appreciated..Thank You
They will harass her and since she is working they might try and sue her but if they do they will only be able to get a judgment against her so that her credit will be ruined. That's all they can do and they might not even do that. Can she retire and collect SS? If so, they can't touch that. She would then be judgment proof.
Brie,
I love your insight. I am getting ready to retire medically from my job and will be earning a small monthly retirement from that job. I went through a divorce and accumulated about $19,000 in credit card debt. I have been struggling because I can no longer afford to pay this debt. I have stopped paying for one card but the other I am still paying. My question is, I have these cards with Banks that I also have checking and savings accounts with, can they get into my savings or checking accounts to pay for the credit card debt?
I've heard of them doing just that...so if I were you I would close those accounts and open new ones. I would also keep as little money as possible in the banks.
Discover card is suing me. My friend who is broke and has no job was just sued by 2 different CC companies this past month. I have a court date at the end of March. My friend made a mistake by signing the form that said she knew she owed the money. I don't know what to do. I have some assets but am not making enough money to pay for groceries much less all my CC debt. We have a slow payment option through the court here, that's the deal my friend took. No negotiation on the amount tho. 10% interest too. If she misses a payment they can start taking her things. They already sucked money out of her account when she signed that paper. Discover lawyers have offered me a 7,000 settlement from an 11,000 account. I can't pay it. Help.
Read and try this: http://brie-hoffman.hubpages.com/hub/Validate-the-
Hi Brie, saw your answer topic and thought I should comment on this just in case anyone in the UK is thinking of doing this because the laws are different over here.
If you are from the UK I would not recommend letting your credit card debts go unpaid unless you really cannot afford to pay them. If you don't pay then there is not just the possibility of CCJ and defaults, if you owe the creditor enough and they believe it is worthwhile then you can be forced into bankruptcy. This is expensive for them so will likely only happen if you owe them a particularly large sum of money but it is a possibility.
Also, despite the fact that bad credit will fall off your file after six years, it is a that time approaches that many companies will start trying to get their money back again, even if they haven't called you for several years. Not all banks will sell their bad credit on, certainly the one I work for doesn't, and they continue to work on cases that are many years old. When it's coming up to the limit they will look at other ways of getting their money back and extending the time they have. If you own a property you can have a legal charge brought against it for any unsecured lending you default on, whether or not you had the property at the time you got the credit. That would mean that when the property is sold any equity in it after your secured debts are paid off will go to the unsecured creditors you defaulted with. Even if your lending was secured against another asset, say a vehicle, if there is a short-fall once the asset has been repossessed and you still owe them money, they can put a charge on your property for the remainder. There is no time limit on the charge, which will stay against your property until it is sold, either by you or your executors.
What I am basically saying is that here in the UK, this can go on for a lot longer than you realise, if you owe a sum large enough for them to exhaust every avenue for getting the money back. Though if you do only owe a few thousand I think you could probably get away with this, plus if you decided you don't want to borrow any more money (which is a very good idea because debt is a weight that nobody needs) then you definitely could. If you did want to borrow again then it would mean a long period where you couldn't buy a house or get a new car.
Also, I would like to say I work for a French bank who only operates only prime, asset-secured lending. We are not irresponsible lenders, have never had a liquidity crisis and physically cannot lend money we don't have because we take no deposits- we are purely a finance house and have to borrow money in order to lend it. In theory every bank should be like this, but we live in a capitalist society and that gives the banks far more power than any non-government institution ought to have. Is it at all surprising that the people running banks are irresponsible when a large number of the people borrowing money are irresponsible as well? We're bailing out the banks because they lent money to people who bought the latest Ipad, or a flash holiday, or a night out on their credit cards because they didn't have the cash when they wanted it.
I personally think if you got yourself into debt buying stuff that you didn't need and couldn't afford, why should I continue to bail out the bank because you won't pay them? It's bad enough having to bail them out for their own irresponsibility as lenders without having to continue to pay because a lot of people want their debt reduced or written off.
I am a huge lefty but I wish people would take responsibility for their own actions. The world does not owe you because there is an economic crisis right now, the banks do not owe you because you borrowed money from them that you couldn't afford to repay. You asked them for it in the first place!
Obviously I acknowledge there are a lot of people who's circumstances changed, they lost their jobs, became disabled or had something else happen that means they can no longer work. These people should of course be given debt relief and I believe strongly in higher taxes to fund social welfare. I also don't think anyone should have to sleep on couches and work several jobs to pay off their debt even if they were silly enough to rack it up in the first place, because I think everybody has a right to a certain standard of living. What I do not believe in is people with decent jobs, who could make cut backs or even come to arrangement on individual payment plans with their own creditors without having to go through the costly agencies (I agree these are rip offs and I wouldn't recommend using them when you can speak to your creditors yourself), simply deciding they don't want to and don't have to pay.
Woah! This is a long comment!
Thanks Haley. Although you say your bank is reputable I think that most are not. Most are nothing more than slave owners, lending invisible money to people at outrageous interest rates and then if a payment is missed adding fees and even higher interest. I don't know anyone who has defaulted on their debts if they had a job and could afford to pay them. As far as I'm concerned the banking industry is responsible for the entire global monetary crisis and should not have been bailed out at all. Therefore, I think that is actually an act of patriotism not to pay in order to defund and starve the beast. It's unfortunate the laws in the U.K. are so stringent but I am not surprised as that is one of the main arteries of the banking cartel. If I lived there I would move. Thanks again for your insight.
To be honest Brie, I do agree that a lot of the big banks all over the world have acted disreputably. I think my bank is unusual because it's relatively small and hasn't been involved in any of the high-risk lending because it could not afford to do it, plus we're bound by French laws (which I must admit I don't know the ins and outs of) as well as UK financial law so it's probably harder for us. I actually work in risk and we have always had a very conservative approach to lending, which is totally unlike the ethos in the city.
I think the UK has a debt culture as well, which is why the laws here can be so stringent. Unemployment is high, which is obviously a contributing factor but almost everyone I know who is working is drowning in debt but they all have the latest gadgets and gizmos. The recession doesn't actually seem to have curtailed consumerism over here to the level you would expect.
Most of the people who are seeking debt relief and defaulting in the UK have just spent so much on credit that their disposable income will no longer cover the payments and I'm not just talking about people I know. I was a retail underwriter for five years and every day looked at the credit reports of people who had mountains of credit card debt, many of them £50k+, but still just had to get themselves a new car and would write in and complain that they couldn't do without it when we would decline them for being over committed, like a new car was a basic human right. We actually have a referral rule for people that have high levels of indebtedness so we can weed them out and not lend any more to them.
Obviously I don't know the ins and out of the US and other countries but in the UK personal financial irresponsibility is a very real problem.
I'm like you, I'd like to see the power removed from the banks. I'd like to see a shift to the left, a hybrid socialist-capitalist system so that there was more control of the economy. I don't think bringing the banks to their knees is the way to do it though. Just look at what is happening in Greece!
I think life would be much easier for the man on the street if any changes are managed gradually and smoothly. Our whole system of living is too invested in the cycle as it is. We are reliant on business to manufacture food and provide us with the money to buy it. If the banks go then the businesses go, our money goes, our food source goes and then what? I wouldn't call bringing down the banks patriotism- I'd call it revolution.
Well I disagree with you on several points. I don't think greater central control is the answer..I think that is what we have now with the banks..what do they say power corrupts and absolute power corrupts absolutely! Greece is not a good example of what I am talking about, they are a good example of Banksterism to the nth degree. The average man in Greece never received any benefit, any money and yet they are being squeezed for every dime they have. Iceland is a good example of what I want. They told the banksters to go take a hike that they weren't going to play ball and they did.
I agree that we are absolutely too dependent on corporations and banks for everything in our daily lives. I think the answer is true freedom, small government and no taxation. That is what grows an economy. But, I'm not so naive as to think that will ever happen. No, in fact, I believe things will get much much worse..but that is another story.
I've been reading on your HUBs for a few months now and I have been reading every comment and response and my knowledge has grown alot since reading this HUB. I lost my job last year but I regained another job since then. My job now currently lets me keep my head above water but if the limitation on the debt runs out, will my credit be OK after 5-6 years if I'm not able to pay the debt off? I was reading on some of your response on how the debt can disappear as long as we don't admit to owing any of the debt and letting the limitation time run out until it clears from report but will my credit be ok after? My lifestyle has changed dramatically but my family has been supportive and let me stay with them and my sister has co-signed my car so that nothing will happen to my vehicle(as I need a car to get to work) and my job lets me not drown in my bills. If you have answers, I will listen! Long story short to sum it up, Will my life be back to normal if I decide not to pay because I can't due to the fact that I'm living paycheck to paycheck and everything I have goes to rent, carnote, food, and accessories like shampoo, toilet paper, etc. But i'm just worried about my life and question myself "Is it always going to be like this for the rest of my life?" What can I do to better it?
What state do you live in Timothy?
oklahoma city, oklahoma
Read this Timothy: http://brie-hoffman.hubpages.com/hub/Read-this-BEF
Your state is "unclear" regarding how long it takes for debt to clear off your record; call a bankruptcy attorney in your state and ask them.
well I used to live in miami florida but when I lost my job, I was forced to move here with family and I've lived here for about a year now and I've never received a letter from any creditors about being sued(yet). Could I possibly be missing anything? I'm just concerned reading some of others response to this hub and they're being sued after a few months of not paying but I have no real assets or anything under my name. I just have a job to keep my head above water for now.
If they can't find you..they can't sue you, think about it. Read some of my other hubs about how to disappear.
My 92 year old mother in law was living out-of-state with her daughter who died last October. MIL has dementia, is blind and get's approximately $1200 a month from Social Security on which she can live. (her care runs approx $1500 a month, meaning we have to cover the gap.) We are in the process of getting her accepted for Medicade, which will help. She has e credit card debt totalling approximately $14,000 (some of which was initiated by the deceased daughter) we are trying to be responsible for her without being responsible for her debt. Since she is not able to see, we have had her mail forwarded to us, so are just now finding out what a mess she's in. If we write letters to her creditors stating her destitution, will WE then be stepping into a situation where we could be liable for her debt? She has no assets...no car, no home, no nothing, so should we just let the mail pile up and ignore it?
If I were you I would call each creditor and tell them just what you told me and tell them she obviously cannot pay. If they ask you ANY information about yourself tell them its none of their business. After that never talk to them again, never give them a dime..there is nothing whatsoever they can do to her except harass her. If you haven't done so already read this article that I wrote about bankruptcy and the elderly:
Thank you so much....I can't tell you how upsetting this has been for us. She has no idea how bad off she is and even when we explain her circumstances, she doesn't remember. We simply cannot be responsible for her debt and have felt bad about that. Not any more. I will be sharing the article with my husband so he can stop worrying about this. We'll contact the creditors ONCE and let them know the situation, then we'll live our life and try and take care of MIL the best we can.
Thank you....I feel much better about the whole situation.
I'm glad to be of help. Really, if you look at it with the proper perspective this is a minor thing. Don't let it worry you at all, you are not in any way responsible for her debt and she is off the hook completely, so be happy :)
hello brie. I have over 15k in credit card debt & also have a time share debt of 8.5k in which I need to let go as well. Can I do the same with the time share & stop paying or does this wk differently? Also I have a mortgage/home is this something they can take from me? Thanks for all brie! I've been in the whole for over 6 yrs now & was even considering bankruptcy until I read your info. Please advice
The Time Share debt and your mortgage are NOT unsecured debts so they do not work the same way. Since you have assets I would consult with a bankruptcy attorney. But, make sure to get a few opinions to make sure they are accurate.
You mentioned that they can't take your unemployment check,but they can put a lien on your checking account.
In Colorado the only way to recieve unemployment payment
is either direct deposit or debit card.
Even if they put a lien on your account they can't touch your unemployment money.
My mom is 91, she has two credit card bills totaling 14,000. She has less than 5,000 in savings/checking. She does not have any stocks, bonds, or ira. She owns a home in her name. I am trying to pay off these bills, but I can't pay for hers and my own. When she dies I know that I am not responsible for the bills, but can they take what she owes when we sell her house?
Yes, the best thing to do is to put the house in your name if you can, remove the money from her savings account NOW and either keep it as cash or buy silver and gold coins and keep them hidden in your house. Depending on when she dies and how long it has been since she turned the house over to you, they may not be able to go after the proceeds from the house. Different states have different time lengths before it's off the books sort of speak.
Thank you, Brie. Unforunately,she won't change the ownership of the house, which is in New York. So, than I can expect to be responsible for her bills after the sale of her house? The collection people are already tracking me down calling my phone number(I live with her as her caretaker, but have my own number)Should I talk to them about the situation?
Fyi- Not sure if this is important to tell but she set up a irrevocable trust. My sister and I are co trustees.
Hi Janet: Yes, they will go after the estate after she dies. In the meantime, it's up to you whether you wish to talk to them or not. The worst that can happen is that her credit rating will be affected and if they want they could take her to court. All that would happen then is that she would have a judgment against her. At her age, who cares! And that is the worst, that might not even happen. If I were you I would still take the savings out so that they can't go after that and then I would just ignore them. You might tell her creditors (once) that she is 91, has no money and that you have no money and that's it. You could also (after the debt has gone into collections) ask them to verify that they are the owners of the debt. I have an article about that as well. If they take you to court and can't verify that they are the owners of the debt, you win and they get nothing. http://brie-hoffman.hubpages.com/hub/Validate-the-
Read it, it will help you.
I can't help you with trusts, I don't know anything about them.
In 2007 I lost my job and 6 months later my husband decided to leave too. I went from a 6 figure combined income to 0 followed by unemployment. To give you a bit of history I always paid my CC bills in full and 5 days before deadline. Then I heard I was considered a deadbeat for doing so and left a small monthly balance. After the loss of income it became a necessity, However, I paid my cc bills (over minimum) until I could no longer sustain. I had credit insurance but because I chose to pay the bill and not report my unemployment within 6 months it was rendered null and void. I wasn't looking for them to go back an pay past bills I just needed help going forward. I was unemployed over 18 months and getting scared. I live in FL and my last contact with any cc company was 2009 at the latest. I have been gainfully underemployed for 2 years now with an annual income of a little over 11k in 2011. Capital One has been making anonymous embarrassing call to me and my 89 year old mom.Now they are trying to serve me and so far we have eluded them. I drive a 7 year old car witch still has the original brakes on it and I own a bike which is my only truly reliable transportation. It's tough enough to find work and require 15k in dental work. If it's hard to find work now it will be harder for a 55 yr old toothless woman to gain employment. I looked up public records and found Capital One is suing me small claims court. After 5 years of financial hell and physical pain I'm about to lose my mind. Any advice?
Yes..read this: http://brie-hoffman.hubpages.com/hub/Validate-the-
Make them prove that they even own the debt, if they can you will have a judgement against you but so what..it just means you will have bad credit..just ignore it, everyone has bad credit now. Don't pay them, save your money and use that money that you saved instead of credit cards. Eventually it will go away.
Vladimir Uhri Level 5 Commenter 2 years ago
Excellent piece of work, Brie. I am using credit card only for practical reason. Otherwise I would cut it to microscopic pieces.