now what? advice/direction needed
Date: Mon, 05/28/2007 - 06:05
Long story, short: I have accumulated $40k+ in credit card debt on multiple cards, and the crows have finally come home to roost.
Up until about 6 months ago, I had been barely managing (though my credit rating was still good), but then I missed a payment, then another, and things snowballed.
I have been out-of-work during this period, and am still unemployed, unfortunately, which is the crux of the problem. I live in NY.
Most of this debt has been accrued during the past three-and-a-half years (ironically, before that, I made a point of avoiding credit cards, going all the way back to college).
During the past 6 months I have made a couple sporadic payments to various cards, but things have recently come to a head. Basically, 5 of the balances have now (this past month or so) gone to CAs (including one to the dreaded CACH). One (Redline) is now considered to be defaulted (for some reason, whereas none of the others have), and is supposed to be paid in full, according to the collector. With another, I have just received a legal notice from an "attorney" claiming to have been retained by CACH.
I will be probably be sending the requisite letter of debt verification to him as there is some issue with the creditor/debt info on his letter, but I'm not sure what to do next. Should I be sending DV letters to everyone?
I have not made contact with anybody as yet, as I'm not really sure what to say. They want money. I have little/nothing to give them.
I will be trying to scrounge up something, maybe a couple hundred dollars this week to try to give some of them something; maybe try to negotiate a limited payment plan with those willing, even if just to stave them off for the time being until I can find some gainful employment, but I'm at a loss otherwise. What else can I do?
I will be getting a credit report today or tomorrow, probably thru annualcreditreport.com as I can't afford to wait. Should I get a report from all three agencies, or is one preferable over the others?
Considering the size of the debt and my present employment status, is it even worth pursing credit counseling or consolidation? What can they really do for me? I'd like to avoid the whole bankruptcy thing, if possible.
And frankly, the $40k wouldn't really be so bad considering my living expenses are fairly cheap (low rent, utilities taken care of, no kids, etc) and I could devote a large portion of my income (if I had any) to paying off the debt.
Ultimately, I just need some time and employment, but they aren't going to grant me either, are they? Maybe I should ask them for a job. Sigh...
Also, is the defaulted debt hopeless? Is there any point in contacting Redline regarding that? They say they want full payment, and from what I've been reading, they aren't going to budge. And it was one of the largest balances.
Any help/advice would be appreciated.
40k
It may be difficult to get debt consolidation because there is no income to set up a plan with. You may consider, but only as a last resort, filing chapter 7. I say last resort as it will stay on your report for ten years. Athough it is not as bad as you think because you can rebuild your credit through secured loans. I is going to take a long time to pay your 40k back even through a plan. Unless you expect a really big salary a really big salary which is something that you did not mention.Write to all these creditors and explain your situation to them. You maty be able to negotiate lowering your amounts, interest, payments etc. They do not want you to file chapter 7. I found in the past that certain ones will work with you and others won't. American Express was a won't in my case. Good luck to you. You have come to the right place for help. Join the Forums and you will be contacted by a debt professional who will give you a free no obligation assesment of your situation.
I've been in your shoes, except with 2 small kids....Chapter 7 i
I've been in your shoes, except with 2 small kids....Chapter 7 is not really as bad as it seems; yeah, it stays on your files for 10 years, but in the meantime, you get clean and healthy and get some help to refrain from overspending and avoid getting back to where you are now. Chapter 7 is not the end of your life. I filed 10 years ago due to a bad marriage and divorce. I had no real property and nothing the debtors could take. I learned how to manage my small income and not take on any credit I didn't need. Yeah, I paid extra interest on that car loan - but it helped rebuild my credit and my self-esteem. Don't promise your creditors anything right now - just get certified letters to them about your situation and if and when you decide a bankruptcy - let them know that too. Good luck to you.
Thanks for the suggestions. Should I send letters to my original
Thanks for the suggestions. Should I send letters to my original creditors (the cc companies) and the CAs? Up until a month ago I was still receiving statements from most of them, though they've since shutdown my online access.
Also, is it generally better to correspond with the CAs via letter, rather than over the phone? The calls continue to pile up on the machine, and I fear for legal action if I don't contact them soon.
Send letters to the original creditor requesting to give you the
Send letters to the original creditor requesting to give you the latest account status. If they have your file in their, you may propose a payment plan and get them work on your terms. If you can manage to do this, you don't have to deal with the CA they hired for collections. They will pull your file from the CA and keep posting the payments you send at their mailing address.
In case, the creditor is not willing to work with you, you have to deal with the collection company. Get the debt validated in writing to make sure that you are dealing with the right company who has your info. You don't want to end up paying to someone who never had your info. The details of your debt should be with the CA and they should show in writing. Once you have the info, put a payment proposal. They will bug you to pay in full but you can make them accept what you can afford now.
Ok. Good info. Should I include a firm, yet polite cease and des
Ok. Good info. Should I include a firm, yet polite cease and desist statement in my initial VOD letter to the CAs? One, perhaps two, (namely CACH) have gone so far as to contact my parents in a rather rude manner.
Also, with the exception of CACH, the other CAs have already sent me a statement requesting payment with the appropriate Creditor and Account # info detailed, so my assumption is those are legit (unless they somehow got my account #s from somewhere). Does that constitute a VOD? Should I still send them a VOD letter anyway?
Ultimately, should I completely avoid engaging the CAs over the phone and stick to letters? I have a limited ability to record conversations (only about 15 min. over an IP phone).
Thanks again.