Update - Down to one settlement

[treehugger1]

Wow! I finally got through to someone at CAP1 who could help me. I don't exactly know how I did it. Two accounts are now interest free and late-fee free with reduced payments. Two accounts charged off and were assigned to collection companies. They pulled one back in and I have a 5-year payoff plan. The payment is half of what is was. The other account they stated they could not pull back in, and I'm asuming this is the one that might be in the hands of NCO. I spoke with NCO yesterday. First guy was a jerk, but the second guy was actually professional and pleasant. I don't know if or what account they actually have as I won't discuss any financial issues over the phone, but they said a written notice was on the way.

With the exception of two other very small (total under $1500) in local collections, I have now arrived at agreements with all my creditors, with the exception of one account.

I did not get the job that would have reduced my income to the BK 7 level, but perhaps there is some light at the end of the tunnel.

I'll continue to post my experiences with this board. As always, a wrench in the spokes could grind everything to a halt and the BK is still a possible course of action.

The most unfortunate thing is that almost no creditors would work with me until I was 90 - 120 days past due or charged-off. Even then there are no guarantees that they will work with you. I just had to stay on top of everything. I kept calling and calling asking for their help. If I can get a settlement and affordable payment plan on the last CAP1, I'll be able to breathe and begin my climb out of debt.

All of your comments related to BK and collections process have been well appreciated.

[mommyto3+1]

Hi,

I was wondering how you were able to get the cc companies to do this for you? I have 7 cards totaling almost 50K and really don't want to file a chapter 7. At present none of them are past due but that is short lived.

I am no longer able to pay them so should I call each and ask for what exactly?

Thanks and congrats on your success!

C.

[HHM]

I hope you keep us posted on how your credit repair goes.

It will be interesting to do a compare and contrast to see how your credit fairs in the future vs the majority of people who file Bk.

[treehugger1]

I will keep you posted. In fact, I may become the board's poster child for why one should just declare BK and live with the results. Again, my biggest issue has been "what to do with the $75K+ in student loans." There appears to be some movement by some Oregon BK attorneys to argue that such payments should be subtracted under the means test. I am also looking at possibilitites of significantly reducing my income for 12 - 18 months to qualify for a BK 7 or a BK 13 with a small percentage of payments going to unsecured. HHH, keep in mind that I could give a rip about how my credit fairs in the future, but I do not doubt that my credit will recover as quickly as the case where I file bakruptcy. If I were much younger, I would have moved immediately to the BK 13 and asked the courts to make changes to my payment plan as my income changed. In fact, were I younger, I would have quit my job, lived in a tent, and done whatever is necessary to meet the means test for a BK 7.

To answer the query related to how I have attempted to work with CC companies, I can tell you that this is grueling. First, I simply stopped paying them. I would answer almost every call on my phone and state the fact that I could not pay on this debt at this time. Generally, it took 4 - 6 months of non-payment before a few of them offered a "special deal." During that time, interest, late fees, and penalties added up. It is important that everyone realize that I can consider two worst-case scenarios:

a) I finally can't pay and judgments are rendered against me and I undergo wage garnishment. I can live with the 25% wage garnishment, but I doubt that few others can. I have no assets to protect. In addition, I have a few $k in retirement benefits that are protected by both state and federal law. Were I to retire, I would very possibly meet the requirements for a BK 7.

b) I quit my job, live with friends for six months (maybe work a job at minimum wage) and eventually file a BK 7. Then, take my state pension and resume work in the private sector.


I have no non-exempt assets. I do not own a home. I do not have personal brokerage account assets. With the exception of wage garnishment, their are no assets that creditors or CA's can convert to cash. Again, I am not in the majority. I can survive just fine on 75% of disposable income. I work for a state agency that follows garnishment laws to the letter. I am not afraid of debtor exams, court processes, etc.

I do not claim to have the answers. I can only share my experiences. And, my experiences may not be what others experience. However, I now have a much deeper understanding of humility.

My comment for the poster wanting to know how I got CC's to work with me, is that I have no assets. I want to believe that all my creditors know this, as all they have to do is pull my credit reports and see my overall debt load. I don't know your case, but if there are real assets involved, I would assume creditors see these as leverage against you, and will act accordingly.

Final statement: If you stop paying your credit cards and unsecured debt, eventually you will be called out on the carpet (sued, garnished, etc.) There are many websites that discuss "walking away" from your debt. In my opinion, the only way to walk away from debt is to qualify for a BK 7 or spend the five years required under a BK 13. I don't think there are many who succeed in waling away from their debts.

Cheers.

[poor@budgeting]

We were offered settlements by most of our creditors upon learning/notifying them of impending BK. In the end though, BK is(hoping) the right decision/solution for us.

[treehugger1]

I would think that many flks "know" when BK is the right call. In my case, it didn't quite pencil out due to some quirky things with student loans. However, if changes are made in our local district as to how student loans are handled in BK 13, then I'll be on my way to legal counsel's office. In the meantime, the best I can do is work with those who have been gracious. Occasionally I screw up and miss a payment, but then after listening to the "You must to this by such-and-such a date," I found creditors can be quite willing to work with me. After all, everyone wants the same thing. We all want to resolve our financial issues; both debtors and creditors.