I read a lot about people wondering if they should file for bankruptcy or try and settle their debt for less than what is owed. I have been dealing with my debt problems for over 2 years resulting from medical issues with my wife that caused her to be out of work for a time and then once she went back to work, the company she worked for closed. As a final insult my pay fell by about 30%.
For several months I depleted every dime of my savings trying to keep up with payments.
This was my first mistake. When the writing was on the wall, I should have stopped making payments immediately and kept my money. I should have waited until the CA's were ready to settle and done it then. By making payments I did nothing to reduce the debt I owed, I was just padding the credit card company's pockets with high interest rate payments. I spent thousands of dollars keeping it current, when I should have been focused on getting rid of it.
Not filing for bankruptcy may have also been another problem, but I am not sure about that. Essentially, when things went sideways on me I had about $70,000 in credit card debt. With my income, I would have likely been very close to a 100% repayment, which would have put me into a debtors prison for 60 months (in my mind).
I decided finally that I would start calling my creditors (most of which were with collection agencies by this time) and telling them there was no way I could possibly pay them anymore. They tried to get me to take lower payments, but none would do much.
So, I decided to stop paying anything and just wait. After about 60 days some sent me settlement offers, other just made more threats. After about 120 days they went to CA's and that is when I started letting them know the ugly truth about my situation. I did my best to make them think I was circling the drain financially (which I was), and that not settling with me was a real bad idea.
I noticed that B of A and Citi were willing to settle, others like HSBC and Capital One would not budge much and both have sued me and my wife on different occassions. I settled my first account with Citi for about 50% in 2008, but I settled my B of A account last month for about 25% of what I owed. I have settled four Capital One accounts for about 75% each, but they were all pretty small.
One thing I made sure I did, and I think it was the right things to do, is that I got my stuff settled before I worried about my wife's. She had little income and suits against me would have hurt us more if they went to a judgement. Getting credit back on solid footing at some point will be important for my family. None of our unsecured credit was joint.
Another thing I have learned by mistake...put nothing in both your names if it can be avoided. Our cars loans are only in my name and our credits cards are individual, not joint. The only joint debt we have is our mortgage. This has helped when I call on behalf of my wife and let them know that I know I have no obligation to pay, but I am will to "help."
The one thing that I know for sure, if you don't have the money to pay on a settlement within 2 or 3 months, don't even bother. You are better off filing for bankruptcy if you don't have the cash. Trying a debt settlement company or any other arrangement is just puting off the inevitable.
I am still dealing with about $10,000 in debt that is down to the wire. Capital One tried to serve my wife today, but she is out of town for a couple of days visiting her sister, I will see what I can do about this tomorrow, but they are on another planet a CapitalOne.
The final thing I have learned I mentioned a few moments ago: certain creditors will sue your a$$ in a hurry and you might want a plan for them before you start with others. Also, if you owe $1,000 you are more likely to see a lawsuit fast than if you owe $10,000.
Well, that's my $0.02...
For several months I depleted every dime of my savings trying to keep up with payments.
This was my first mistake. When the writing was on the wall, I should have stopped making payments immediately and kept my money. I should have waited until the CA's were ready to settle and done it then. By making payments I did nothing to reduce the debt I owed, I was just padding the credit card company's pockets with high interest rate payments. I spent thousands of dollars keeping it current, when I should have been focused on getting rid of it.
Not filing for bankruptcy may have also been another problem, but I am not sure about that. Essentially, when things went sideways on me I had about $70,000 in credit card debt. With my income, I would have likely been very close to a 100% repayment, which would have put me into a debtors prison for 60 months (in my mind).
I decided finally that I would start calling my creditors (most of which were with collection agencies by this time) and telling them there was no way I could possibly pay them anymore. They tried to get me to take lower payments, but none would do much.
So, I decided to stop paying anything and just wait. After about 60 days some sent me settlement offers, other just made more threats. After about 120 days they went to CA's and that is when I started letting them know the ugly truth about my situation. I did my best to make them think I was circling the drain financially (which I was), and that not settling with me was a real bad idea.
I noticed that B of A and Citi were willing to settle, others like HSBC and Capital One would not budge much and both have sued me and my wife on different occassions. I settled my first account with Citi for about 50% in 2008, but I settled my B of A account last month for about 25% of what I owed. I have settled four Capital One accounts for about 75% each, but they were all pretty small.
One thing I made sure I did, and I think it was the right things to do, is that I got my stuff settled before I worried about my wife's. She had little income and suits against me would have hurt us more if they went to a judgement. Getting credit back on solid footing at some point will be important for my family. None of our unsecured credit was joint.
Another thing I have learned by mistake...put nothing in both your names if it can be avoided. Our cars loans are only in my name and our credits cards are individual, not joint. The only joint debt we have is our mortgage. This has helped when I call on behalf of my wife and let them know that I know I have no obligation to pay, but I am will to "help."
The one thing that I know for sure, if you don't have the money to pay on a settlement within 2 or 3 months, don't even bother. You are better off filing for bankruptcy if you don't have the cash. Trying a debt settlement company or any other arrangement is just puting off the inevitable.
I am still dealing with about $10,000 in debt that is down to the wire. Capital One tried to serve my wife today, but she is out of town for a couple of days visiting her sister, I will see what I can do about this tomorrow, but they are on another planet a CapitalOne.
The final thing I have learned I mentioned a few moments ago: certain creditors will sue your a$$ in a hurry and you might want a plan for them before you start with others. Also, if you owe $1,000 you are more likely to see a lawsuit fast than if you owe $10,000.
Well, that's my $0.02...
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