Can't afford to pay minimum balances anymore??

[peacesoon]

We cannot afford to keep paying as our savings is dwindling and BK is likely but cannot due until the fall. Our income has dropped more than half over the last year and we accumulated debt while unemployed(and old debt too). How long do I have with a CC company before they start any legal action? I am feeling so sick over all of this. Thank you!!

[junker]

i didnt get my first lawsuit until 3 years after i defaulted, but now i think they could be more aggressive, DEPENDING, on what they think is available for them to sue, ie, house, job they can garnish, other assets, if you dont have anything they can go after, they ususally arent as quick to sue,, but from what i have been seeing from other posters, you should be safe for at least 6 months to a year

[landofpoor]

We cannot afford to keep paying as our savings is dwindling and BK is likely but cannot due until the fall. Our income has dropped more than half over the last year and we accumulated debt while unemployed(and old debt too). How long do I have with a CC company before they start any legal action? I am feeling so sick over all of this. Thank you!!

Why cant you file till fall?Far as the legal action goes your prob safe for 6 months before it gets sent off to collections least thats been the case for me.I just never speak to any of them .they leave messages blah blah best call at this number yeah I will get right on it lol.
They can take a gamble and sue me to just find out I have no assets etc.I feel time is on my side no rush to file.maybe next yr maybe 2 yrs from now guess it will be deciding factor what when it comes push to shove.way i look at it right now spose you would have a medical emergency once filed you wouldnt be able to include that.

[catleg]

Agreed with the previous posters. I have not paid my credit cards since roughly Oct 08 and have not been sued yet (live in NJ, where it is easy to sue for under $15k). I have been threatened (had a "paralegal" today call from the "law firm"). But ultimately being able to file BK is like having nukes when the other side just has conventional weapons. The main thing is not to bother talking to all the drones who call on the phone, it really is quite pointless and gains you nothing whatsoever and just brings you down and wastes your time. I use a verizon service called Call Intercept to block all their numbers (need caller id to preserve sanity of course). I would just disconnect the phone but my wife and I both work from home.

[2xBK]

Typically a creditor will charge off the account after 6 months. It may go to a third party collection agency before that but certainty will after the 180 days. It may also go to an attorney after 6 months, and they might sue, hoping for a default judgment. You can respond to the summons and delay the judgment. Don't despair, if you feel that bk is the only option then line up interviews with 4 BK attorneys and you'll immediately feel better after seeing them, in that you do in fact have some control over your options.

In the meantime you'll have to deal with the insane phone calls, we've all been there, done that. Ask your questions here,we will help.

[MiSSMaGoo]

I was 2 yrs past due before an legal action was taken. If you're filing this fall I would stop paying now...

[catleg]

Another reason why they are in no rush to sue you is that once they file court papers against you the alleged debt stops accruing interest at the contract rate and instead accrues interest at the court's pre- and post-judgment rates, which are a lot lower. YMMV of course depend on your specific state but I believe this is generally true in most places. Not to mention that they have to stop charging late and over limit fees!

[tkharvey]

I know this whole thing is upsetting. It totally went against our nature to STOP paying our bills.....always had good credit, etc. But there comes a point when you can only do what you can do. We've come to peace with our decision to file BK and you will too, in time. We haven't paid creditors since January and not lawsuits yet. We're waiting on Loan Modification to go through with our mortgage lender before we file (hopefully by July). Once you retain an attorney and pay his retainer, he should be able to write a letter to all your creditors stating your intention to file BK. Then, the calls should stop.
Good luck!

[peacesoon]

Thank you so much for responding everyone.

We have lived in SC for about a year now(renting). I know that SC doesn't allow wage garnishment We lost our home last year - deed in lieu. This was in MI. My husband and I both lost our jobs and he found one within a few months but out of state. We could not sell our house in MI and could not afford to pay both mortgage and rent here. We racked up credit cards prior to losing our jobs in 08(husband lost job year before too - 07). Our income has dropped by half and I haven't been able to find a job yet. Also, we need to wait to file BK because my husband was part shareholder of a company and he just settled on his lawsuit against them. The money doesn't go to us though but to his father whom paid most of the attorney fees(and actually was owed the stock) but the settlement was far shorter than what we anticipated so we are left with nothing but our savings(under 10k now which may seem like alot but it's all we have). We still have legal bills to an attorney firm owed to contend with in addition to the credit card bills and medical(approx 80k) - I am hoping we can discharge those attorney bills... I don't know how that will be handled. It leaves me scared sh*tless. Especially because it's not just us - we have three children - one that has muscular dystrophy that I need to make sure are provided for. I am grateful that my husband at least has a job for now...

Thanks again. I will stop paying starting June and see what happens. The calls will bother me but I think I can send them straight to vm on my cell.

[tkharvey]

You're not alone. My hubby and I have always made a strong six figure income...until about two years ago when his pay was cut by more than half (he's in the real estate field) We kept thinking the market was going to turn, and we would be able to dig out of our hole, but it never did. Debt just got worse and worse and we saw no other option. It's really rough, but am trying to look at the positive. I think this has taught many of us what's important, family, security, etc. instead of "things". I guess I never realized how good we had it until now we have to choose which utilites we're going to pay, etc. etc. We too, have three children and it's really difficult when they are used to a different way of life (although we were never "filthy rich", we were always able to go see a movie or out to eat when we wanted). Now, outings are few and far between. Things are going to get better for all of us, though. Just some advice about the calls, we disconnected our home phone and went strictly cellular. I can't tell you how I hated hearing the phone ring knowing it was a collector. My house is alot more peaceful without it! Good luck.

[bk4sky]

as soon as i took a job loss and had to take a new job making about 10k less a year and i knew i couldnt make the minimum payments on my cards i made the appt and retained a lawyer right away. but because i was so broke it took me 11 months to pay the lawyer in full and file the case. In the 11 months that i have not paid, at around 6 months they started sending me letters from diff collection agencies and offering me settlements, but no lawsuits. so i think your fine if you stop paying them now and wait a bit until you can get a lawyer.

[peacesoon]

Thanks guys! I forgot where this post was..found it!!

This is going to be our first month without paying the cards. I am nervous as hell!! Hoping to save up some $$$ for BK filing, etc. I am also wondering if our car is going to be exempt during the BK..it's value is approx. $14k and will be paid off this month.

[treehugger1]

LOL! Xanax is is "under"-rated. Try it and you might see how our life should feel.

And I agree with BB. Find the humor in all of it. The system of lender/borrower is so bizzare, you can't help but laugh.

You have far more control than you think. In fact, you have the ultimate control of your financial situation. How you steer towards the future is your choice, not some creditor, CA, or JDB. They only have the power you give them.

Consider this example: Suppose are in debt for $100K. Your mother or father has a stroke or cardiac event that they can't afford to pay for. Or, suppose you have a gambling, drinking, or drug problem. If it comes down to fixing your own health (physical or rmental) and/or paying your debt, you should ask, "What do I honor?" Do you honor yourself and family, or do you honor your unsecured debts?

[fireworks]

peacesoon, I was in your shoes 6 months ago. Up until January of this year I had never missed a payment on purpose - had a few slip past me, but that happens when you're juggling 8 credit cards and running your own business.

After deciding to file, on the advice of both BK lawyers I saw, I stopped paying my cards. January was the last payment. Calls started almost immediately - AMEX within a week. After retaining a lawyer we referred them all to him and the phone has been pretty quiet of late.

We haven't filed yet only because we haven't filed our income taxes. Our business accounting was so far behind it was ridiculous. That's almost done so we can file taxes, once the taxes are done and we have the refund in hand to pay the lawyer's fees and maybe get some work done on my car (if there's any left) we'll be filing BK.

Some have said that when your balances are small enough to go to small claims court then the CC company might be quicker to sue. Small claims court means less cost and hassle for them. The local small claims court limit is $5K, so I have a few who might try it - we'll see. The general consensus is that you have at least 6 months.

RE your car - depends on the state and what you use it for. In my state I can only have $4K equity in each car. There are websites online where you can look up each state's exemptions. A good BK lawyer would be a good investment for you.

[peacesoon]

Thanks!!

peacesoon, I was in your shoes 6 months ago. Up until January of this year I had never missed a payment on purpose - had a few slip past me, but that happens when you're juggling 8 credit cards and running your own business.

After deciding to file, on the advice of both BK lawyers I saw, I stopped paying my cards. January was the last payment. Calls started almost immediately - AMEX within a week. After retaining a lawyer we referred them all to him and the phone has been pretty quiet of late.

We haven't filed yet only because we haven't filed our income taxes. Our business accounting was so far behind it was ridiculous. That's almost done so we can file taxes, once the taxes are done and we have the refund in hand to pay the lawyer's fees and maybe get some work done on my car (if there's any left) we'll be filing BK.

Some have said that when your balances are small enough to go to small claims court then the CC company might be quicker to sue. Small claims court means less cost and hassle for them. The local small claims court limit is $5K, so I have a few who might try it - we'll see. The general consensus is that you have at least 6 months.

RE your car - depends on the state and what you use it for. In my state I can only have $4K equity in each car. There are websites online where you can look up each state's exemptions. A good BK lawyer would be a good investment for you.

I wish you the best of luck Fireworks! I moved to SC last year but it appears I have to be here 2 years to use their exemptions - when we file it will still be under 2 years. That means we can use the Federal exemptions.. From what I understand, since we no longer have a home, we can double the wildcard which will cover DH's car and our funds that we have left in our bank account. Hope that is true.

We will be interviewing attorneys soon. The phone calls will nerve wrack me.

All the best to you! Thanks for the info!