IDEA...need opinion.

iVillage Member
Registered: 07-10-2001
IDEA...need opinion.
11
Tue, 06-21-2005 - 2:02pm

So, I've been pondering this idea...I need opinion.

a) Stop paying all the CC's (total of 11).

b) Take the $$ from all those payments and start targeting them individually.

c) When I get one paid off and target the next, I call and tell them if they roll off all the missed and late fees and some of the interest, I'll start paying, otherwise, they get passed over...forever.

Comments?

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Avatar for mymartes
iVillage Member
Registered: 03-26-2003
Tue, 06-21-2005 - 2:07pm

I personally think it's a bad idea. I would continue paying the minimum on all except one. Choose a target card. Pay as much as you can on that one. When it's paid off, take what you paid and add it to the minimum of your target card.

In addition, is there a way you could consolidate some or all the credit cards into one. It make paying them easier.

Just a thought.

Good luck.

MYM

iVillage Member
Registered: 03-27-2003
Tue, 06-21-2005 - 2:20pm

Between your AMEX post and this one, it sounds like you're having a rough time, and are pretty frustrated right now. Sometimes it can feel like they're all out to get you and no one's willing to give you the benefit of the doubt. Believe me, I've BTDT and it's not a fun feeling to have. I so hear you.

Unfortunately, it's often that way for all of us as we begin to repay our debts, and in frustration it's easy to do things that may hurt us in the long run.

As for the Amex situation--it sounds like they don't want you owing them a lot of money. They're worried because they aren't used to seeing you pay well on your cards. The best thing you can do is to prove to them that you *are* responsible and you *are* capable, and that you *are* going to pay everything back. Then when you have, you can close that account, and go do business with companies that will treat you better, and never give another penny to the companies that are treating you poorly. Unfortunately, calling to complain at this point probably won't score you any points.

Now, for the idea at hand. It sounds good in theory, but I foresee some pretty major issues you might face. For a start, as soon as you stop paying on the CC's they will start the mean, nasty, horrible collection calls that may drive you to distraction and send your blood pressure through the roof. Then they will start doing ugly things to your credit report. They will rack up the fees, possibly as much as doubling the amount you owe. And even if you can work out a settlement with them later, you will owe taxes for any amount that they "forgive," including all those fees and interest they charged while you weren't paying.

As for the idea that you threaten to stop paying forever, that too has its dangers. For one thing, it's likely to make them mad enough to really give you a hard time. It's possible they could sue you for the total amount plus court fees, and receive a judgment and even garnish your wages. That would be an ugly situation for you to be in.

I think there are other dangers I'm missing, too. All in all, it seems a dangerous and probably counter-productive path to take.

It's easy to get really angry at this stage of the debt process. The cc companies practice some pretty unethical methods to get people in debt and keep them there. But if you really want to get back at them, the best thing you can do is keep plugging until you have enough wealth built to really put them in their place. Then, if you like, you can call them all up, tell them that you're starting an investment plan whereby you and your investment company intend to make plenty of money, and that they are *not* going to be that lucky company. Goodbye. :)

If it makes you feel better. :)

Mean time, keep coming here to vent, and keep plugging.

Blessings,

Heather

iVillage Member
Registered: 02-06-2005
Tue, 06-21-2005 - 2:45pm
I totally agree!
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iVillage Member
Registered: 07-10-2001
Tue, 06-21-2005 - 5:01pm

Thanks for the advice.

Unfortunately, there is nothing to attack with, not for another 2 1/4 years, when my spousal support from my divorce ends. That will free a big chunk of money ($2800 a month), but until then, there is little I can do. With $70,000 in CC debt from the divorce, and my Ex paying nearly no CS ("I can't work!") There isn't room to service all the debt now. I quit paying Capital One and MBNA 3 months ago.

I've got some savings, but I'm not going to put it on the CC's, especially if the CC's are going to turn around and turn off the credit line...that makes handling disasters impossible.

I'll have to read up on this tax stuff...I hadn't heard of that one. Exactly how does that information get reported to the IRS?

Avatar for mahopac
iVillage Member
Registered: 07-24-1997
Tue, 06-21-2005 - 5:23pm

I have to agree with everyone who said "Don't do it!" You have a legal obligation, not to mention a moral one, to pay the debt.

If the rates are too high (to the point where you're only paying interest and not paying down the principal), you can try negotiating with your creditors or working with CCCS to get a lower rate. But not paying is not an option, unless you declare bankruptcy, in which case you will have a very difficult time getting credit for the next 10 years.

Kelly

iVillage Member
Registered: 07-10-2001
Tue, 06-21-2005 - 6:10pm
Oh if could have gone bankrupt, I would have, but with my income the court wouldn't allow anything but Chap 13, which would cost more per month than the bills themselves.
iVillage Member
Registered: 09-20-2004
Tue, 06-21-2005 - 8:36pm
I'm just wondering how you know chap 13 would cost more per month than the bills you have? i don't think a judge would allow that, seriously. The whole point of it is to get some breathing room. I'm pretty sure that if you are in a ch 13 situation, the interest stops accumulating as well (anybody know for sure???) I would consult a BK atty for information, or at least CCCS. Not paying is NOT a good idea. Threatening not to pay is even worse, because then you are giving the person on the other end of the line a challenge to make your life miserable. I just wonder who you have talked to re: bankruptcy that said your income is too high to file? Obviously I do not support bk, I'm up to my ears in debt myself. Any way your spousal support can be adjusted? It seems to me that given your situation, this should be an option for you. If you haven't, I suggest reading "How to get out of debt, stay out of debt and live Prosperously" by Jerrold Mundis. Some of his ideas are way out there, but it really managed to get it into my head that you cannot put your entire life on hold to pay back debt...there's got to be some living somewhere in there, too. (I didn't however follow his suggestion not to pay any bills for a month!!) I just think that to every problem there has to be a solution out there somewhere. Do you have anything you can sell? A lot of us on this board have been de-cluttering in an attempt to make our situations more manageable. At any rate, I wish you the best of luck. Heather
iVillage Member
Registered: 02-14-2004
Tue, 06-21-2005 - 9:49pm
Wow! That is a lot of cc debt to try to handle. Now I can see why you wanted to shut off payments. The problem is, you risk being sued, garnished, etc. What state do you live in? Is wage garnishment legal there? If so, you would be better off contacting a credit counseling agency and getting a monthly payment you can afford for all of this. You don't even have to enroll all of your credit cards, only the ones you want to enroll. So if you really want to leave some out you can, but you might want to choose the ones with lower balances. Good luck with this, it does appear to be quite the task.
Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Tue, 06-21-2005 - 9:55pm
az_tbone - when you settle a debt, any amount forgiven (I believe above $600) is reported to the IRS as income to you.

All my best,
Danni

iVillage Member
Registered: 07-10-2001
Tue, 06-21-2005 - 10:10pm

I talked to three different BKY atty's all gave me identical answers.

The court would not allow Chap 7, only 13. The fees are 8-10 time higher for 13.

They would like demand 50% repayment over 3 years...which would be payments higher than I currently have, which would not help matters.

Spousal Support is fixed and could only be modified by agreement...which is not likely since my Ex LOVES the fact that I'm in deep water.

So, the choice I've made is the only one I have. Those two will have to sit and wait for payment...nothing else I can do.




Edited 6/21/2005 10:12 pm ET ET by az_tbone

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