Who knows about credit card companies?

[redqueen]

I have two credit card balances which I had been paying on for over six years, without using either card. (I started off with three cards, one is paid off.)

Just before I separated from my ex, I missed a payment. They (of course) jacked the rate up to the point that I could no longer afford the minimum payment. And of course, being the stellar examples of predators they are, they won't accept partial payments. I'm not sure how that's supposed to ensure they get paid, but whatever.

The point is, now I'm being asked to pay the entire balance.

How does this make any sense?

Just had a collector call my office and call me a liar. I'm mad enough to spit nails.

Anyone have any ideas? I'm past the end of my rope.

[Starbucks Anarchist]

1. I don't think they can do that.

If you miss two payments in a row, which you haven't, then it's reported to a credit agency, and even then, I don't know if they can demand the whole balance.

[redqueen]

2. It's been way more than two.

I have tried to get on with debt management agencies... they want more than I can afford as a monthly minimum.

I think I'm just fucked.

[Starbucks Anarchist]

3. Sorry, I thought you said you missed one payment.

You could declare bankruptcy, but that's really a final option, if anything.

I'm not sure what else you could do, though -- may want to ask someone more knowledgeable about it.

[redqueen]

5. I missed, one, they jacked the rate up, added a fine every month...

If I couldn't afford the first minimum after the rate hike... how the hell do they think I'm supposed to afford it later, is what I wonder.

*sigh*

All the knowledgeable people I've asked (several) say I have to borrow it from a friend or family member.

Brilliant.

[LynneSin]

4. You need to find a non-profit credit repair organization

There are a slew of these groups out there - make sure they are non-profit. A non-profit will not take any payments to help repair your credit. They will help negotiate with the folks where you owe money and help you get these things paid off.

[redqueen]

7. I did go through the application process with one...

they want $300/month.

I'll check a few more out... thanks.

[MrCoffee]

6. if you're already in collections

make them an offer. the credit card company has probably written the debt off, which was purchased by the collection agency. offer them 40 cents on the dollar, payable in installments.

[redqueen]

9. The collections guy said the whole sum.

He would only knock 1000 off the 8000 balance.

Then when I said I can't do it he said get someone to put me on their credit card, and charge it to theirs. I said the only people I know with credit pay it off every month, so they'd probably say no. I said I'd ask if it'd make him happy, and he called me a liar.

[Phillycat]

8. How much is the balance?

If it's below, say, 5K, get a third credit card that's offering free balance transfer and low beginning interest rate. Transfer both your balances to it and hit it HARD for the months where the interest rate is low/free. That should get your minimum down to what you can afford. Pay the whole thing off and NEVER GET ANOTHER CREDIT CARD AGAIN, they are evil.

[redqueen]

11. It's not.

And I NEVER, EVER will.

Stupid ex. Stupid stupid STUPIDER me for listening to the ex!

:banghead:

[Phillycat]

13. Your credit might be fucked at this point, but go to your bank

You might be able to get, say, a home improvement loan that has a lower interest rate, and pay off the balances with it.

Your ex and my ex oughta get together and go bowling. He didn't spend my money, he was just a fucking dick in every other way.

[SacredCow]

21. My, but I know your pain all too well.....

I'm just finishing off paying for my half of the ex's spending proclivities. For someone who should have known better, she made some crazy-stupid financial decisions. Of course, it was all blamed on me for "Not making enough money to support her in the fashion she was accustomed to (her and her mothers' words- not mine). It's taken me 3 years of fairly lean living but the end result will be well worth it.

I've never tried one of the credit repair agencies, but it sounds like you're exactly what they are around for. Interest rates gone out of control to the point you can't afford the minimum payments.

I NEVER heard of them demanding payment in full, though. Normally, they want to stretch it out and keep collecting the interest. The worst one I had (MBNA) had been closed for months (my ex transferred as much as she could from HER accounts, then stopped paying on MBNA since that card was in MY name). By the time I found out about it, we had separated and I contacted the bank and informed the rep of the situation.

They would not work with me on ANYTHING. AND- I would receive their statements less than a week before they were due, making it hard to budget when you're living from paycheck to paycheck. Ultimately, I convinced my mom to loan me the money to pay the balance in full, which I did. Within a week, they were sending me card offers :wtf: I called them and worked my way up the phone chain to someone with some clout and asked simply, "Would you please come down here and pinch my nipples?" Stunned silence followed...

"What are you talking about...."

"Well, " says I "That's what I like when I'm getting fucked, and as near as I can tell- that's your bank's intention..."

End of conversation, and I haven't received another offer since.

[redqueen]

25. I managed to pay off my MBNA card, thank goodness.

Yay for little bits of progress. :)

[SacredCow]

28. Every little bit helps, I assure you....

Hang in there, redqueen... It's not an easy thing to go through, but it IS surmountable!
:grouphug:

[lost-in-nj]

10. Not sure if this is still true

but when I was having money trouble and missed payments,
Someone told me if I told the creditors not to call me at work because it could jeopardize my job they weren't supposed to call you at work.....

:hug: I don't have any ideas except to agree with what Lynn said.....

good luck....been there


lost

[redqueen]

12. Thanks sweetie...

I may need to just keep trying non-profit agencies like that till I find one that'll work with me.

$300 a month? Are they serious? :wtf:

[Mojambo]

14. I feel for you. I really do.

I went through all of this a few years back. Luckily it was before these immoral predators closed off the bankruptcy net and I managed to get it all cleared away. Of course my credit is totally destroyed, but I don't really care. I have no interest in ever owning a home or buying a car.

Every time I start getting the urge to get another card to buy a fancy new electronic gadget or whatever I read a post like yours and realize I never EVER want to be under the thumb of these corporations again. If it means I never get an iPhone or big flat screen monitor so be it.

Best of luck. Hope you can find a non-profit to help you out of this mess.

[redqueen]

15. Thankya...

the really sad thing is I made that decision over six years ago. I cashed out my friggin 401k to get started getting out from under these things (ex used them for EVERYTHING... then bitched at me for paying minimums. wtf?!)... but hey, I did try!

[LynneSin]

18. never ever pay the minimum - if that's all you can afford...

then pay $5 over the minimum.

Aside from the issues you have now, if someone always pays the minimum it can hit your credit rating. But just paying a couple of dollars over the minimum will prevent that hit

[LynneSin]

17. Today you may think you never want to get a new car or buy a house but...

...one day that may change.

I've been thru credit hell through my own bad spending. I managed to get everything paid off and started to rebuild my credit thru one sub-prime credit card with a $200 balance. Mind you I made sure bills got paid off on time and grumbled when I had to pay all those fees required to go with that card. But at least I had a start with rebuilding my credit. Ten years later I was able to buy my own house and it was with a standard, first-time buyer loan, not a sub-prime.

I use to think I never wanted a new car or to own a home, but it dawned on me that I said those things to cover up the fact that my credit was bad. But if with the right amount of discipline and willpower credit can be rebuilt and you can't imagine the boost of self-esteem when I got the mortgage and realized I was not only broke as hell now but also credit-worthy.

Even though I don't have Providian anymore (Washington Mutual now) the one thing I liked about their sub-prime card was the fact that my online billing information included a monly FICO score. You wouldn't believe how much excitement it gave me to see my FICO go from the 400s (really bad) to the number it is today. It would only go up a few points each month but seeing that number go up was like getting on the scales and seeing you lost a few pounds that week. It was the encouragement I needed to continue the willpower.


BTW 620 is the FICO score needed in order to qualify for a non-subprime home mortgage

[Mojambo]

20. It's not just that I don't want those things.

It's that I haven't constructed a life for myself where those things are even a possibility. Even if I had perfect credit I wouldn't be able to afford a home or a new car anyway. I've just "chosen" to live a different way.

A lot of this is related to avoidant issues I have due to a personality disorder.

That's a nice plan you have to rebuild credit should I ever want to though. Thanks for sharing.

Incidentally, what's the best way to find out your current credit score anyway? I'm kinda curious what the number is.

[LynneSin]

30. Your state should allow you to pull your credit for free once a year

Unfortunately FICO scores are not available and you'll have to go to one of the 3 credit unions (experian, equifax or transunion) and order those.

I didn't say that right now you need to own those things - I use to say the same things you posted. But it's good to start preparing. Ten years ago I waited tables and struggled to make ends meeting living in a little tiny apartment in Bucks County. It was also 10 years ago that I took a job with a contracting company that ultimately led me to the job I have today.

Things change - it's always good to start preparing now for what might happen in the future.

[ceile]

16. You need to send them a certified letter

telling them not to call you at work. I've had to do that twice. A verbal request usually won't cut it. I had one company say they were going to continue to call me at work unless I gave them my home number (this was after I asked them 3x not to call me at work). So, I went on to my state's Attorney General's website, pulled up some fair credit practices info about harassment and told them (in a letter) that I'd sue per my state's applicable laws. Never heard from them again.
Also, you can tell them that you refuse to deal with them. You can choose to only deal with your cc company directly.
But remember all requests must be in writing!

[TreasonousBastard]

19. This isn't advice, cause it doesn't always work, but...

I found that if you just ignore them they eventually go away.

I had a credit card with $500 in actual charges that they wanted $3,000 to pay off. For several years they hounded and haunted me with all sorts of deals to pay it off, but I was pretty broke on top of being pissed at them. Eventually, the calls and letters stopped, and they never bothered to sue and garnish my pay.

[redqueen]

24. That's what i'm afraid of... being sued.

*sigh*

[gmoney]

22. If you have the second card still...

...consider calling them to explain the situation up front, and see if they'll raise your limit and do a balance transfer for you from the predator card. The second bank might be OK doing that if you've been timely with them. Ask if they have any promotional rates for balance transfers, otherwise the rate may be nearly as bad as what the predator is charging.

You DO risk the second card company jacking your APR too... check your Cardholder Agreement. They might be one of those evil banks that can jack your rate just because someone ELSE jacked your rate. But if that's the case, since you're already screwn by the first guys, not sure how much worse that would make the situation.

Also, they do have to accept partial payments, so I hope you've been sending them something. Might be favorable for you if you have to turn to bankruptcy or they try to take you to court to collect.

P.S. If you find a way to pay off the first card, you might consider resisting the temptation to close the account. If there's no balance, and no annual fee, having the available credit MAY actually look good on your credit report. Or I've heard talk to that effect. Using all of $8000 looks worse than using half of $16000, for example. There's an old saying, "It takes a pretty successful man to be a million dollars in debt."

That, and it takes a pretty good pitcher to lose 20 games in a major league season.

Good luck!

[redqueen]

26. I'm an idiot. I closed them years ago...

I think I may have found a way to at least pay off the smaller balance, at least.

I didn't know that they HAD to accept partial payments, so no, I wasn't sending it... it said right there! Minimum $x00!

God I feel stupider every minute.

:banghead:

[gmoney]

29. Don't feel stupid.

Paying off the smaller balance might be good, then take what you had been paying on that and apply that to the larger balance account.

BTW, the John Commuta (?) "Debt into Wealth" method that they constantly advertise on Air America about getting debt free is pretty simple, and should be free.

Step 1) Stop charging anything to credit cards. If you can't pay cash, you can't have it.
Step 2) Look at your monthly expenses to make a realistic budget, and cut to the bone so you can free up some extra money -- say you can manage $50 a month in cuts.
Step 3) Make a list of the debt you're servicing and trying to pay off (credit cards, car loan, mortgage, store cards, student loans, not groceries, utilities, insurance, etc.)
Step 4) Order the list by amount owed (not APR or payment), lowest to highest, and the minimum monthly. For example:

A) Store Card - $320 - $20/month
B) Credit Card - $900 - $60/month
C) Car Loan - $5000 - $200/month
D) Mortgage - $75,000 - $800/month

Step 5) Each month, pay the minimum on B, C, and D, and throw ALL you can at A. Let's say you can manage to pay $70 on A (the $20 minimum, plus the $50 you found from scrimping). In about 5 months, A will be paid off.
Step 6) Once A is paid off, shift your found $50, the $20 you were paying on A, and add it to what you're paying on B, which would total $130, and start paying that towards B. In about 7 months, you'll have B paid off.
Step 7) Now, take the $130 you were paying on B, add the $200 you're paying on C, and start paying $330/month on C. In about 12 months, C should be paid off.
Step 8) Take the $330 you were paying on C and apply that to the principle amount of your mortgage, D, on top of the $800 you were paying. This should dramatically reduce the time it takes to pay off your mortgage.

If you get a raise or find more money, use it to further pay down the debt you're currently working on, rather than raising your standard of living. Obviously, you'll need to make exceptions for unexpected expenses, but that's basically how his "debt into wealth" plan works, in theory. This totally may not work for you, but in case you were curious, that's how it works, basically.

Sounds like a lot of discipline, and it sounds like it'll take a long time, but I've heard that if you only pay the minimum on credit card bills, it'll take close to 30 years to pay off the balances, so you need to start eating away at the principle.

Good luck, and keep us posted.

[LynneSin]

31. Great list but I want to add one thing - if feasible, pay a few dollars over minimum

It seems corny, but paying just the minimum will affect your FICO score. As long as you pay a few dollars over minimum (I usually did the 'round-up' payment but anywhere from $2-$5 will do), then you will not get this hit.

[PeaceNikki]

23. I'll post here in case someone else can find value in my advice:

First... the demanding payment in full (or a settlement) is a tactic to earn a big commission. Each rep has quotas of dollars to collect every month. They try to get as many big "pops" as they can to help them along and earn a bigger commission. They have no legal authority until they take you to court and get a judgement. The collector is flexing his/her muscules to find the people who have the means to get 'em while they're hot. In addition, this will help him/her seem as though they are doing you a HUGE favor if they get to the point of accepting payments or offering a settlement. He/she will make an exception for YOU and you will be very thankful for his/her compassion.

Secondly, they can "refuse" to accept smaller payments via a verbal agreement, but if you SEND the payments, they can not and will not refuse payment once it's in hand.

If you CAN get the lump sum to settle, I recommend doing that to get them out of your life. Lowball them - they can usually go as low as about 60% of the total. Try 50% and insist they will have it in 10 days... get a written statement that they will SETTLE IN FULL for that amount. Otherwise, write a letter outling YOUR payment arrangements and include a cease and desist. Make those payments religiously and they will leave you alone. That's guaranteed $$ that they get every month towards their quotas. They cannot and will not turn over to legal if you are paying on it.

The law states that they CAN call you at work and home... until you tell them in writing to stop. So, do that. But set the terms and give them to this company and then stick to them and they will leave you alone.

[redqueen]

27. Thank you again.

This has been an eye-opening thread for sure.

I really appreciate all the help.