Need advice on credit problem

[Dulanic]

I am sure some of you either work in this area or have had this problem before. I was unemployed for about a year and fell severly behind in my loan/credit card payments. I found a job about 4 months ago and have gotten most my payments under control, tho it has been hard. 2 of my credit cards have been paid up to date and gotten them below their limit which makes them alot easier to deal with, and thoose are under control, my car loan and educational loan are about 2 months behind but Ive worked out payment plans with them and will be caught up within a few months. However my best buy credit card got sent to a collection agency, the problem was they wanted a large down payment which I could not make. During this time Best Buy was still charing me $54 a month for late fees and over the limit fees even tho they were would not accept a montly payment, I could only deal with the collection agency. Since then about $600 in just fees and intrest has added up... Now a company in my home state has purchased my account and is coming after me, threating to sue, which from what I understand since their in my state they can take me to court. The problem is they want alot of money and fast, like $500 a month, which is FAR beyond my reach, I can barely pay my current bills without this problem, I have already moved back into my parents house to cut off rent payments.

If anyone can please give me advice on who to talk to or what to do about this situation Id appreciate it soooooo much. Im really in a bind here and dont know what to do. They want the money now and its money I just dont have.

 

[Muadib]

Sounds like you need to talk to a lawyer. Have you considered bankruptcy?

 

[klah]

Clark Howard always recommends these folks: Consumer Credit Counseling Service, who will help you out for free.

 

[Dulanic]

Originally posted by: Muadib
Sounds like you need to talk to a lawyer. Have you considered bankruptcy?

No because in the scheme of things it isnt all that much money ($3000 for this credit card) but Im working a job where I make about 45% of what I used to make, because I cant find anything else. And its really not worth it after lawyer fees and stuff. Another problem is the trans on my car died, and I cant leave my current job because they give me a truck to drive (field tech) and without it Id have no way to work.

 

[NogginBoink]

Dulanic,

Collection agencies will go to extreme measures to threaten you to get money.

Much of what they do is illegal.

Start by telling them not to call you again, ever. As I understand things, they have to comply with that.

Realize that the likelihood that they'll actually sue is just about zero. That's a strongarm tactic to get money out of you.

Read up on your rights as a consumer. Start at www.creditnet.com and read the forums there. You will find lots of people in there in the same boat as you, and how they dealt with the creditors.

Don't sign ANYTHING until you're sure you fully understand your rights. The web board above has oodles of information and some very informed folks. Learn from them.

Once you understand your situation and the bigger picture, you'll be in a much better position to negotiate with this creditor.

There's a very good chance you can make an, "I'll pay you if you'll take negative information off my credit report" trade. Don't even THINK of pursuing this until you've done your homework. There is no rush. Take your time. Those guys aren't going anywhere, and the longer you make 'em wait, the more desperate they get for your money. Believe it or not, YOU are the one with the power in this situation.

Now, that's not to say that everything will come up roses. You do have a battle to fight, and the collection agencies fight these battles day in and day out. They're going to be better than you unless you do your homework.

Don't let these guys stress you out. Tell 'em what they can go do with themselves. Take a deep breath. Your world isn't going to end, no matter how it may seem right now.

Arm yourself with information, and you CAN come out ahead on this one.

 

[Dulanic]

Originally posted by: NogginBoink
Dulanic,

Collection agencies will go to extreme measures to threaten you to get money.

Much of what they do is illegal.

Start by telling them not to call you again, ever. As I understand things, they have to comply with that.

Realize that the likelihood that they'll actually sue is just about zero. That's a strongarm tactic to get money out of you.

Read up on your rights as a consumer. Start at www.creditnet.com and read the forums there. You will find lots of people in there in the same boat as you, and how they dealt with the creditors.

Don't sign ANYTHING until you're sure you fully understand your rights. The web board above has oodles of information and some very informed folks. Learn from them.

Once you understand your situation and the bigger picture, you'll be in a much better position to negotiate with this creditor.

There's a very good chance you can make an, "I'll pay you if you'll take negative information off my credit report" trade. Don't even THINK of pursuing this until you've done your homework. There is no rush. Take your time. Those guys aren't going anywhere, and the longer you make 'em wait, the more desperate they get for your money. Believe it or not, YOU are the one with the power in this situation.

Now, that's not to say that everything will come up roses. You do have a battle to fight, and the collection agencies fight these battles day in and day out. They're going to be better than you unless you do your homework.

Don't let these guys stress you out. Tell 'em what they can go do with themselves. Take a deep breath. Your world isn't going to end, no matter how it may seem right now.

Arm yourself with information, and you CAN come out ahead on this one.

Thank you a ton.

 

[tm37]

Originally posted by: NogginBoink
Dulanic,

Collection agencies will go to extreme measures to threaten you to get money.

Much of what they do is illegal.

Start by telling them not to call you again, ever. As I understand things, they have to comply with that.

Realize that the likelihood that they'll actually sue is just about zero. That's a strongarm tactic to get money out of you.

Read up on your rights as a consumer. Start at www.creditnet.com and read the forums there. You will find lots of people in there in the same boat as you, and how they dealt with the creditors.

Don't sign ANYTHING until you're sure you fully understand your rights. The web board above has oodles of information and some very informed folks. Learn from them.

Once you understand your situation and the bigger picture, you'll be in a much better position to negotiate with this creditor.

There's a very good chance you can make an, "I'll pay you if you'll take negative information off my credit report" trade. Don't even THINK of pursuing this until you've done your homework. There is no rush. Take your time. Those guys aren't going anywhere, and the longer you make 'em wait, the more desperate they get for your money. Believe it or not, YOU are the one with the power in this situation.

Now, that's not to say that everything will come up roses. You do have a battle to fight, and the collection agencies fight these battles day in and day out. They're going to be better than you unless you do your homework.

Don't let these guys stress you out. Tell 'em what they can go do with themselves. Take a deep breath. Your world isn't going to end, no matter how it may seem right now.

Arm yourself with information, and you CAN come out ahead on this one.

Some great avice here. I had to deal with this about four years ago and now I am living in a house I own.

Legally you can choose NOT TO Deal with the collection agency. Inform them IN WRITING (via certified mail) and then start getting everything paid up.

 

[LostHiWay]

Originally posted by: Dulanic

Originally posted by: NogginBoink
Dulanic,

Collection agencies will go to extreme measures to threaten you to get money.

Much of what they do is illegal.

Start by telling them not to call you again, ever. As I understand things, they have to comply with that.

Realize that the likelihood that they'll actually sue is just about zero. That's a strongarm tactic to get money out of you.

Read up on your rights as a consumer. Start at www.creditnet.com and read the forums there. You will find lots of people in there in the same boat as you, and how they dealt with the creditors.

Don't sign ANYTHING until you're sure you fully understand your rights. The web board above has oodles of information and some very informed folks. Learn from them.

Once you understand your situation and the bigger picture, you'll be in a much better position to negotiate with this creditor.

There's a very good chance you can make an, "I'll pay you if you'll take negative information off my credit report" trade. Don't even THINK of pursuing this until you've done your homework. There is no rush. Take your time. Those guys aren't going anywhere, and the longer you make 'em wait, the more desperate they get for your money. Believe it or not, YOU are the one with the power in this situation.

Now, that's not to say that everything will come up roses. You do have a battle to fight, and the collection agencies fight these battles day in and day out. They're going to be better than you unless you do your homework.

Don't let these guys stress you out. Tell 'em what they can go do with themselves. Take a deep breath. Your world isn't going to end, no matter how it may seem right now.

Arm yourself with information, and you CAN come out ahead on this one.

Thank you a ton.

He's right. Don't worry about them threating to sue you. Unless you owe them an ungodly amount of money (which you don't) they WON'T sue you. The reason they won't is when they win (which they probably would) they would get a judgement against you. It's now up to them to try to collect it (which they're doing now anyway). It's not the courts duty to collect the money you owe them, they just issue rulings.

Also if you make payment arrangements with the collection agency NEVER, NEVER, NEVER give them a payment over the phone with your checking account #. Always demand everything they offer in writing and tell them after you review and accept it you'll mail a check in.

 

[Dulanic]

Originally posted by: LostHiWay

Originally posted by: Dulanic

Originally posted by: NogginBoink
Dulanic,

Collection agencies will go to extreme measures to threaten you to get money.

Much of what they do is illegal.

Start by telling them not to call you again, ever. As I understand things, they have to comply with that.

Realize that the likelihood that they'll actually sue is just about zero. That's a strongarm tactic to get money out of you.

Read up on your rights as a consumer. Start at www.creditnet.com and read the forums there. You will find lots of people in there in the same boat as you, and how they dealt with the creditors.

Don't sign ANYTHING until you're sure you fully understand your rights. The web board above has oodles of information and some very informed folks. Learn from them.

Once you understand your situation and the bigger picture, you'll be in a much better position to negotiate with this creditor.

There's a very good chance you can make an, "I'll pay you if you'll take negative information off my credit report" trade. Don't even THINK of pursuing this until you've done your homework. There is no rush. Take your time. Those guys aren't going anywhere, and the longer you make 'em wait, the more desperate they get for your money. Believe it or not, YOU are the one with the power in this situation.

Now, that's not to say that everything will come up roses. You do have a battle to fight, and the collection agencies fight these battles day in and day out. They're going to be better than you unless you do your homework.

Don't let these guys stress you out. Tell 'em what they can go do with themselves. Take a deep breath. Your world isn't going to end, no matter how it may seem right now.

Arm yourself with information, and you CAN come out ahead on this one.

Thank you a ton.

He's right. Don't worry about them threating to sue you. Unless you owe them an ungodly amount of money (which you don't) they WON'T sue you. The reason they won't is when they win (which they probably would) they would get a judgement against you. It's now up to them to try to collect it (which they're doing now anyway). It's not the courts duty to collect the money you owe them, they just issue rulings.

Also if you make payment arrangements with the collection agency NEVER, NEVER, NEVER give them a payment over the phone with your checking account #. Always demand everything they offer in writing and tell them after you review and accept it you'll mail a check in.

Thanks I prob would have done that, but what you say makes sense.

 

[Frenchie]

I have to disagree with a number of the statements made here. I am a collections attorney and handle cases just like this one on behalf of creditors and collection agencies.

While it is true that collection agencies prefer not to file suit (so they dont have to pay an attorney), if the balance due is over $1,000, there is a good chance that they will in fact file suit. And most credit card member agreements provide that if they must file suit, they may also collect reasonable attorneys fees (1/3 of the balance), in addition to court costs and interest.

What you can do is tell them in writing that pursuant to the F.D.C.P.A., you dispue the balance, are requesting verification of the debt as well as the original creditor. You can also tell them to cease all telephonic and written communications addressed to you at home or work.

As to the balance, you could argue that the late and over-the-limit fees should have stopped accruing once the account was charged off. From their, generally, they will accept a lump sum of 70% of the balance or reasonable monthly payments ($100+) on the balance. If they threaten suit, you can always reply that your credit is already ruined, so a judment will have little affect on it and that you are judgment proof in that you dont have any bank accounts, real property, or substantial personal property. The only down side is that in 46 out of 50 states, if they get a judgment and you make more than the poverty level, they can garnish your wages. And of course if you do have bank accounts, they can seize them. And if you own an unencumbered vehicle, they can seize that as well...

 

[Dulanic]

Originally posted by: Frenchie
I have to disagree with a number of the statements made here. I am a collections attorney and handle cases just like this one on behalf of creditors and collection agencies.

While it is true that collection agencies prefer not to file suit (so they dont have to pay an attorney), if the balance due is over $1,000, there is a good chance that they will in fact file suit. And most credit card member agreements provide that if they must file suit, they may also collect reasonable attorneys fees (1/3 of the balance), in addition to court costs and interest.

What you can do is tell them in writing that pursuant to the F.D.C.P.A., you dispue the balance, are requesting verification of the debt as well as the original creditor. You can also tell them to cease all telephonic and written communications addressed to you at home or work.

As to the balance, you could argue that the late and over-the-limit fees should have stopped accruing once the account was charged off. From their, generally, they will accept a lump sum of 70% of the balance or reasonable monthly payments ($100+) on the balance. If they threaten suit, you can always reply that your credit is already ruined, so a judment will have little affect on it and that you are judgment proof in that you dont have any bank accounts, real property, or substantial personal property. The only down side is that in 46 out of 50 states, if they get a judgment and you make more than the poverty level, they can garnish your wages. And of course if you do have bank accounts, they can seize them. And if you own an unencumbered vehicle, they can seize that as well...

I posted on the creditnet forums and am told this collection agency are total bloodsuckers and will do anything to get their money. From what Ive read I can send a letter and refuse to work the collection agency and that I can still deal with the original creditor? Do you think this is advisable or possible? If I ask them to cease all communications how does that help resolve it? Im still a bit confused.

 

[Dulanic]

Also Frenchie isnt there something wrong with them sending me montly statements, charging me intrest late fees and over the limit fees, and NOT allowing me to make a payment? They said the collection agency was now in control of the account, and I couldnt make payments to them! Then how can they keep charging thoose fees?

 

[Frenchie]

The creditor can either keep the account and handle it themselves, turn it over to an in-house collection agency, turn it over to an outside colletion agency, or a collections attorney. Typically, once they turn it over to another agency, all communications, deals, and payments are made through the agency. That is up to their discretion.

The benefit in telling them to cease communications is 1) no more calls and letters, 2) your forcin gthem to either put up or shut up (file suit or go away.)

Typically, they can decide whether or not to accept payments at least until a judgment is entered. Most contracts provide that upon default, the creditor can call the entire balance due. At that point, they have the option of accepting payments as before or going on the full balance. However, the fees should have stopped accruing when they write the account off.