Credit Card Round 2

[Spyatu]

Thank you, that sounds right to me, why is the letter from an attorney ? Is there any temples I can use to send a simple and correct letter?

Sorry but I was an excellent customer with great credit until my change of position so all of these is new to me.

I assume we don't want to sign for any letters that comes my way ? I do want to resolve this but I don't have the 30k or the $500.00 a month they were asking me.

Thank you so much everyone for your help, any more ideas suggestions are welcome

[whipster1]

DO what treehugger said. That is the correct response. Do not give them ANY information, They are NOT your friends. They want YOUR MONEY and nothing else.

[catleg]

I have gotten similar letter from a "law firm" collecting for Citibank here in NJ.
I send a DV and C&D letter to them, and much to my surprise, got back fairly promptly a package with copies of the last 12 months of statements. Now, on the one hand I think this means they're serious, but on the other hand, it does cost $300 to file a civil case here over $15k (which this is). So it will be fairly costly for them to file a suit which just forces me into BK. Besides, they'd probably rather just let the interest meter run a little longer at 30%, once they file suit they can only collect the court's pre or post-judgment rate, around 5.5%. It probably helps that I have 17 charged off credit card accounts and my wife has 20. I have to believe any sensible analysis has us filing BK, only a question of time.

I guess what I'm telling you is that this is a normal phase of the collections process and not to be overly concerned about it. In theory some percentage
of people get scared by letters from law firms and cough up money. None of us here, however. :-)

[treehugger1]

And, interestingly enough, your purchase helped the economy to grow. Maybe the credit card industry didn't grow because of your purchase, but your money spent is all part of the economy. You just get to help decide who the benefactor is.

[catleg]

I got a demand letter from one of the all time favorites in collection law, Pressler & Pressler, about an alleged Discover card debt. Laugh
out loud funny that they're willing to take Visa/MC/Amex in payment on the debt.

I have to keep reminding myself that there has to be some scenario in which all this stuff makes sense, even if it's not necessarily mine. I'm actually taking a perverse sense of pride in the economic stimulus I'm providing in the collections area. I've cut back spending but hopefully kept up my share of GDP spending in the form of all the activity resulting from collections.

[Spyatu]

If I file chapter 7, what happens with a equity line of credit on the house ? I have a 80/20 mortgage loan and the 20 is the equity line, also what's after this first letter ? Thank you everyone.

[treehugger1]

In terms of a chapter 7 filing and what becomes of your "equity" loan (HELOC,) you should post that on the Chapter 7 forum.

In terms of "what happen after the first letter," the answer is probably nothing until (if ever) you receive debt verification. This may or may not happen. But, keep in mind that in the meantime your debt keeps growing at massive interest rates and fines. If you are able to file a BK 7, then do so. If not, we can only help you deal with potential collection efforts. The outcomes of your fighting collections cannot be predicted with any certainty. I think you want "clear" answers as to what happens if you don't pay your debts. The answer is, "EVERY individual case is different." Makeno mistake about it, if you fail to pay your debt, then you will need to deal with collection agencies, collections attorneys, possible lawsuits, judgments, liens, and wage garnishment. You will need to decide how much you want to risk. If you are not intending to file BK for a while, assume the worst, and hope for the best.

[treehugger1]

CatLeg, Very true! I had a friend over for dinner last night. He/She just lost their job and are worried about their unsecured debt. I said perhaps you can become a debt collector and attempt to collect my debt, or maybe even attempt to collect your own. LOL

I continue to be stunned by colleagues/relatives/friends who truly believe they might go to jail if they can't/won't pay their debts. It only goes to show how insidious and deeply rooted folks are to unsecured lines of credit. The "unsecured" part is what they don't get. I doubt the Feds have a stimulus/TARP plan out there to deal with defaulting unsecured lines of credit.

I still don't believe we've seen the worst of this financial crisis. With Crap1, BOA, etc now reporting 9% - 10% default rates on unsecured credit lines (CC's, notes, etc) I think this will only get worse. Once the unemployment numbers catch up with the reporting of CC default, I suspect we will see 15% -20% default rates. I don't think the economy is going to fall into depression. I do think that the financial institutions have had their day in terms of unsecured credit profits. But, they are not ignorant. They will overcome this through smart investment banking procedures. They will eventually write off billions in unsecured credit lines. It will be harder to package and sell defaulted loan accounts, unless they sell them for a few cents on the dollar. The financial institutions will continue to move forward; aside from their mistakes, consumer mistakes, and regulatory mistakes. Some of us are just caught in the aftermath.

[Spyatu]

Thank you so much for your help. If you had been a good citizen for years this type of situations can be intimidating and stressful, thank you to all of you that take your time to help some of us. so to the chapter 7 we go

One more question, is there any place that has a template of the letter that I must write back ? that will help me a lot and will take some of the stress out of Mama's back.

Thanks Again

[treehugger1]

BB, LMAO! They are freaked out. I have friends (and you probably do also) who make $200K (annual household income) and they have jacksh*t to show for it. I have no idea what their payments are on unsecured or upside down auto, snowmobiles, campers, boats, etc. They will never see a return on what they feel is an investment. I mean come on, these folks have $400K loans (1st mortgage, HELOC, etc) on property that is worth $200K - $300K at best. They are not going to ever recover this in their lifetimes.

I was living in Oregon in the early 80's when the sh*t hit the fan. It took this state 15 years to recover what was lost in individual asset value. And then, we had Ballot Measure 5, that rolled back and capped property taxes. This sucked another 10-12 years out of property values. Those who were wealthy and held jobs through these 25 years prospered. But the common working class (who voted for this sh*t) continue to suffer.

Hey, I played the game. I ran up all kinds of unsecured credit thinking my wages would eventually cover the cost. Guess what? It didn't happen and it is not going to happen.

Orego waffles between the second and third highest unemployment rates in the nation. We are a state where 90+% of revenues depend upon personal income tax. If 10 - 15% of the population does not have jobs, who is going to pay for the roads, match the federal block grants for medicaid, keep young folks off the street, etc. With the unemployment the way it is, there is no money to pay for jack squat.

Unsecured debt is exactly that, unsecured!

[Spyatu]

any suggestions of the letter I should draft ?