Should we respond to collection agency?
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| Sun, 11-13-2005 - 1:59pm |
As most of you remember, we have had an awful year - as I am sure most of you have also. I had to file bankruptcy (chapter 7) in October. I absolutely hated the idea and the thought of it but due to husband being out of work a large part of the year and large medical bills there was just no choice. My husband could not file ( we really wanted to do joint) because of a loan he took out within 90 days of filing. The three credit cards he has or should I say had have all been "charged off" according to the credit report we just pulled - now they have been turned over for collections - our phone has been cut off so the agency's can't call us - but should we write the collection agency's a letter and tell them to stop writing? We don't know what to do - if we call them we have no money to offer to them -- someone said that would be like establishing contact and that could cause them to contact us more.. I do understand after reading up on it that even if they have been charged off that they can be sold over and over and over and that years from now they can do a judgement or something? We are just in an incredible mess.. he has gotten a job (that I pray he will be able to keep) but it will take us forever to just catch up on our utilities, groceries, what we owe both of our parents for paying things for the past couple of months. I know that bankruptcy is bad but if he could have just filed with me (it would have been the same costs for the lawyer at the time for the two of us as it was for one - all of this would have been wiped out and in 10 years would have maybe gotten better) But with the charge offs - they can keep accruing interest so we will never get it paid.....Please offer suggestions.
Another thing - I have never known our credit scores -- I get the three free copies a year on both of us each year but you have to pay for the score. Is it even worth paying to get? I know that both of ours must be at the rock bottom now... And the worse thing of all is Christmas is next month and we have children......
But anyway - enough of my whining for now.

You can't request that they stop writing to you.
I've had several charge offs and a judgement in my past.
Hi again,
Usually, it is best to go ahead and contact creditors and start working with them. But in your case, I suggest you wait. You said you are having a hard time even getting caught up on necessary bills--rent, groceries, family loans (yes, I consider honoring these to be a necessary expense), etc. Since the creditors and collectors can't call you, you aren't really being harrassed.
So I say, do everything in your power to get caught back up on your utilities and other necessary expenses. Ignore the other debts for now. Yeah, they're probably accruing interest. Yeah, they could take out a judgment against you eventually. Yeah, it's a hassle getting all those letters in the mail. But there's nothing you can do about it right now anyway, and contacting them will just renew the vigor of their attacks against you. So you might as well leave them alone for a bit.
Once you are caught back up on your main expenses, and have a workable budget in place, you'll have a good idea of what kind of payments you can make to creditors. THEN you can write them (certified mail return receipt requested) with the terms you are offering. At that point, you'll be able to draw up a realistic plan for attack--perhaps you'll contact only one creditor at first, and get that one taken care of (perhaps through a settlement, perhaps through a payment plan). Then the others one by one.
But in the meantime, there seems to be nothing you can do, so I wouldn't stress about it. Take care of what you *can* take care of, and worry about the rest later.
At some point, by the way, charge-offs often stop accruing interest and fees. The creditors just sort of give up on that and just want to collect as much as they can, even if it means less than they technically are entitled to. So you may get something of a reprieve in that respect.
Anyway, remember to hold your head high, do the best you can, and not let it get you down. You are not your debt.
Blessings,
Heather
Just in regards to what Heather (post #5) said. I had a credit card on which I owed $1600. It went to a credit agency, who hounded me for the money for months. Anyway, after a while, they made me a deal, which was that if I pay $1000 up-front, they would take off $600, which was the interest on the card. I fortunately had $1000 at the time and managed to pay it off.
I know how it feels to be called by collection agencies, we still have a couple of things to pay off and if we miss a week, they're on our backs again - and we still have a loooong way to go.
You will find they are happy with any amount of money you repay, as long as it consistent, and you don't miss any payments. We agreed to pay $60 a week each Thursday on one of our debts, and $40 on another (again, on the same day each week). Not alot of money, but better than nothing.
Anyway I understand how frustrating all this is, believe me *hugs*