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What happens whe you stop paying credit cards?
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hi-
husband and i are considering going through a debt settlment prrogram. i wrote a post about this a bit earlier, and now i have a little more information about the the process, i wanted some of your opinions. you sign up for the program, you pay the 3rd party, and you stop paying your credit cards. once there is enough money built up in your acount to make a decent offer to settle one of your cards, they work with the creditor and settle the account. i am worried about a few things: 1. they cannot stop any of the harrassing phone calls- they have no control of what the credit card company can do 2. there is no guarantee that the credit card company will settle the debt - they are basing the settlment on past experience 3. it will be nearly 3 years before they are able to settle our last account/card - so in that time what can that credit card company do to us? i am worried that lawsuits can be filed/wages garnished/etc -- and for what??? because we joined this program! the balance on the last card is pretty high - appx 13k. anyone have any experience with this? i know one person had stated that the credit card companies would not work with her or settle her account, so she got stuck at square one PLUS all the negative credit and a large balance. we are considering debt consolidation/credit counseling as the other alternative - in the long run it appears we may be paying more, but we will be working direct with the creditors so little chance of harrasing phone calls/visits and less of an effect on our credit cards. thanks in advance for your feedback!! any resources to recommend as well? Posted on 05/11/08, 07:05 pm |
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I just contacted Consumer Credit Counseling - a non profit agency. I'll let you know how it goes. I gave them all my info and requested an evaluation but didn't sign up for anything yet. I hope it wasn't a phishing site lol because they have my life. Course nobody would want to steal my identity, they are probably better off with their own!
Jo 
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I work for a very large...well known bank...won't say which one for obvious reasons...and when someone tells us that they are with a debt settlement company...we get legal on the phone right away...the reason for this is...that company will hold your money...like you said...then TRY and do a settlement....by the time that they do it....your card is more than likely at the verge of being charged off...and it gets reported to the credit bureau evry 30 days that you stay past due...even if you make a partial pymt....we DO NOT do business with those companies...our legal dept takes over....on the other hand...cccs....be careful too...most of them are valid...I would suggest looking up the name in the Better Business Bureau before signing up any of them...I have worked with credit cards for the past 7 yrs...
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I contacted CCCS which is a nonprofit agency and associated with The National Foundation for Credit Counseling. They were very helpful and respectful. They pulled my credit report, analyzed my monthly budget and offered a DMP (debt management program).
I did not sign up for the DMP. I called my biggest creditor (citibank) and told them I was thinking about the DMP. Mind you, I have called them several times over the past few months and they were not very willing to help me. When I told them I was going to have to do the DMP, they changed their tune and offered me a long term plan with payments about 1/3 of what I'm now paying, and cut my interest rate to 10%. This will keep me from going completely broke, and I'm going to make the same call to two other places today. I'm trying to keep one credit card for emergencies and cutting up or cancelling the others that I have. Best of luck to everyone! Jo
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thanks everyone for your reply! unfortunately i have some bad news... husband got laid off last week due to budget cuts in his company. at this point i feel we have no choice but to file for BK. we are going to do a lot of research first, and your feedback so far has been invaluable!! thanks again!
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Prior to filing bankruptcy ten years ago a friend of mine gave me a book called Back Off, it tells you how to deal with creditors and what not to do. It was the most inspiring, educational and empowering books that I have ever read. It gave me the strength, courage, kick in the ass and fight to get through that terrible situation. I realize that the laws have since changed since I filed but still well worth trying to get your hands on a copy...just to give you hope if nothing else. Might try Amazon or some used book website. It was several years old when I got my hands on back in 96. Hang in there, good luck and stay strong! Remember, you hvae what they want! So make them come to your terms!
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I would not do that!!! Your credit could be destroyed in 3 years and it will take years (alot more than 3) to repair it. I just recently consolidated all my debts. I wasn't behind but I could see myself getting that way so I got a personal loan and paid everything. Now instead of having 5 different payments every month, my credit cards have 0 balance, as well as I paid my car off and my student loan off and I only have one payment, less than the 5 payments together) plus peace of mind of knowing my debts are paid. Pay your credit cards off because they will NOT go away!! Then only use them in emergencies. I buy small things with them each month and pay the balance in full!
Good luck Kelly
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We ended up filing Chapter 13. They don't take anything like chapter 7. 13 is where you pay so much a month it is so much better to file 13 than 7. It shows that you willing to work it out.
We did the Credit cousling....it sucked and people kept screwing up our information. GOOD LUCK!!
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www.performancesourceinc.com is a good company that can negotiate your debt down for you. They get paid 30% of the savings they get for you so they will try hard to get it way down. They also stop the creditors from harassing you too. My brother-in-law used them and got his $15000.00 citibank debt down to $3900.00. This you can do yourself as well.
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