Success at getting lower rates for CCs??

[nonsense2020]

Probably not the best place to put this post.


I'm trying to get an idea of general success rates for requesting lower interest rates on CCs. I live in Michigan if it makes a difference of any kind.


Have about 100k in CCs at weighted average of 13%. Within it that, have a citi at 18% (18k) and bank of america at 15% (16k). I have ability to pay off all CC debt in 4 - 4.5 years at current income levels.

I work for a "financial" company and don't feel comfortable filing BK to get a 0% interest rate and do ch13 100% case. Also, I have canceled all my CCs. I have a good payment history but that will not help me.

I have debated on not paying to get the CC company's attention but I think I will get a call from my HR rep.

The thought has come to mind --- file ch13, get fired, convert to ch7, and find another job.


Here's a list of my questions including "miscelaneous" questions

1. General success rate at requesting lower rates for CC?

2. Are rates on canceled CCs fixed? (I think that was part of new CC law, but not sure)

3. Do you think have 100k in CC and threatening BK will help to lower my rates? (I know CC companies probably hear the threat every day)

4. What will have happen if I do make the request?


Thanks in advance

[newbie2]

Without giving out too much personal info, I know someone who did exactly what you are proposing and it succeeded for him. He called his CC companies, told them that he was going to be having serious problems paying them, and would have to decide between filing bankruptcy or entering in to a hardship agreement with them (lowering of interest rates, etc). Within a month he had written agreements with all of the CC companies (3 I believe..) and was able to avoid filing BK.

It's certainly worth a shot. Oh, he is also in Michigan. Seems like we're considered one of the real "hardship" states...perhaps that helped, who knows.

[flyinbroke]

Probably not the best place to put this post.


I'm trying to get an idea of general success rates for requesting lower interest rates on CCs. I live in Michigan if it makes a difference of any kind.


Have about 100k in CCs at weighted average of 13%. Within it that, have a citi at 18% (18k) and bank of america at 15% (16k). I have ability to pay off all CC debt in 4 - 4.5 years at current income levels.

I work for a "financial" company and don't feel comfortable filing BK to get a 0% interest rate and do ch13 100% case. Also, I have canceled all my CCs. I have a good payment history but that will not help me.

I have debated on not paying to get the CC company's attention but I think I will get a call from my HR rep.

The thought has come to mind --- file ch13, get fired, convert to ch7, and find another job.


Here's a list of my questions including "miscelaneous" questions

1. General success rate at requesting lower rates for CC?

2. Are rates on canceled CCs fixed? (I think that was part of new CC law, but not sure)

3. Do you think have 100k in CC and threatening BK will help to lower my rates? (I know CC companies probably hear the threat every day)

4. What will have happen if I do make the request?


Thanks in advance

My experiences:

1. None whatsoever. I called hoping for lower rates. I was basically told to s*** in my hat. I stopped paying them. I now have their rapt attention...and got one rate lowered to 4 percent from 16...but it really did not change the payment because it was on a closed 60 month plan. A 13 gets me 0 percent.

2. Most of the time, they won't change. I opted out of cards to keep the same (too high) rate from shooting into the stratosphere. Supposedly unless you stop paying, they stay the same.

3. They hear that threat a million times a day. It does not affect them until you call with a case number and an attorney. Then you get 0 percent interest.

4. Not sure what you mean here.

[helpmeout]

You can try. But it usually takes a few missed payments to get them to agree.

If you can handle this, you can do what is called snowballing. Concentrate on your lowest balance card, while paying the minimum payment on the others, by paying a lot on this card. Once this card is paid off, move on to the next lowest balance card. If there are areas in your budget that you can cut to increase the payments, do so.

But in order for this to work, you have to address the reason why they got so high in the first place or you will end up with high cc debt again.

[nonsense2020]

Thanks for the input.

I'm still debating my options. Plan to see a bk lawyer next week to get a better idea of what the ch 13 option entails even though I already know the general outcome.

Other useful information. Wife makes enough income to fully support the family (food, mortgage, etc with $100 to spare). Also, her company is more BK friendly. I make enough to pay the CC debt, 2nd lease car and insurance with $500 to spare.

Options I am considering are

1. No BK, pay for CC on own in <4.5 years (best for career)
2. Quit the job, watch 2 kids, file ch 7 (mediocre move, career can recover)
3a. File ch 13, get discharged in <4 years (pray don't get fired)
3b. File ch 13, get fired, convert to ch 7, find new job (an acceptable option, career can recover)

[forgotten]

3a. File ch 13, get discharged in <4 years (pray don't get fired)
3b. File ch 13, get fired, convert to ch 7, find new job (an acceptable option, career can recover)

It is against federal law to fire someone because they filed for BK, so you have option 4.
4. Get fired, sue for lost wages. profit!

[HHM]

I think you are overestimating your risk of being fired. I have known many people in the financial industry and those with high end security clearances who have filed bankruptcy with no consequence.

1. It is hit or miss. The people I have seen be successful were able to get the CC companies to turn the credit card debt into a closed end loan at a lower rate. However, this doesn't necessarily lower your payment because the loan is put on a fixed term, 36-60 months. But, I wouldn't count on them simply lowering the rate because you ask. The people that did this were able to prove some hardship.

2. Don't know

3. Doesn't matter.

4. No harm in trying. Worst case scenario, they say no; and then you will REALLY need to consider your options. You are currently in the "if only" phase, which is combination of denial and bargaining, (see Kubler-Ross grief cycle).

[wanabath]

Or you could stop paying them all together and dont pay them anything until they agree to accept 50 cents on the dollar to pay the cards off.

[DeadManCrawling]

One thing to add:

If you do stop paying, even one card, the others will almost certainly jack your rate to the highest limit. This can force your hand and leave you fewer options.

If your career is subject to scrutiny over your payment history, this scenario might move the option toward the bottom of your list of good outcomes.

[gmk]

This is kinda related to the thread:

Assuming you talk to your creditors and arrive at an agreed to payment plan with or without an interest reduction would the following occur if you go on to fiing BK within 90 days or close to filing?

1. Would this be fraud or likely give rise to an AP by a creditor since you knew when entering into the agreement that you were going to file BK?

2. Would it be preferential if you only made payments to those parties you worked out a deal with even though they fell under the $600 aggregate per? I assume one could claim collection pressure caused the preferential before filing?

One of the reasons I mention his is that most of the advice I have read on dealing with creditors is to never agree to a (implied) payment schedule, "I'll pay you $100/mo" as opposed to "I'll send you a $100 now."

My attorney said that when dealing with creditors one can usually buy some time by sending them something, a partial. I also know from my wife's experiences that the day after they get something they're back on the phone wanting something more. It doesn't delay the harrassment much, especialy with the AMEX and Discover folks.

[HHM]

This is kinda related to the thread:

Assuming you talk to your creditors and arrive at an agreed to payment plan with or without an interest reduction would the following occur if you go on to fiing BK within 90 days or close to filing?

1. Would this be fraud or likely give rise to an AP by a creditor since you knew when entering into the agreement that you were going to file BK?

2. Would it be preferential if you only made payments to those parties you worked out a deal with even though they fell under the $600 aggregate per? I assume one could claim collection pressure caused the preferential before filing?

One of the reasons I mention his is that most of the advice I have read on dealing with creditors is to never agree to a (implied) payment schedule, "I'll pay you $100/mo" as opposed to "I'll send you a $100 now."

My attorney said that when dealing with creditors one can usually buy some time by sending them something, a partial. I also know from my wife's experiences that the day after they get something they're back on the phone wanting something more. It doesn't delay the harrassment much, especialy with the AMEX and Discover folks.

1. No, but what would be the point of doing any agreement with your CC's if you are going to file BK?

2. Again, why would you want to throw money away?

[nonsense2020]

Thanks for the responses. I've been working more hours (and same pay) so haven't been able to respond as quickly.

I will sit on this for a week or two to see if my mood changes. Still have my meeting with the lawyer next week.

[kornellred]

It seems apparent that creditors are ruthless when it comes to late fees and interest rate increases when payments are missed - so much so that there is legislation pending which describes limits pertaining to such situations. Don't forget - although bankruptcies are on the rise, it is still a pretty small number of debtors compared to the number of debtors who pay all of their bills on time and without fail. The creditor's sole interest is in maintaining profitability, and at this stage in the game, lowering interest rates for debtors on an individual basis is not perceived as a viable business practice.

The tide may be turning, but for now, you can be assured that creditors could care less about preventing a debtor from filing bankruptcy. A certain amount is inevitable, and it has long since been factored in to the unsecured credit business.

[seamoonil]

One thing to add:

If you do stop paying, even one card, the others will almost certainly jack your rate to the highest limit. This can force your hand and leave you fewer options.

If your career is subject to scrutiny over your payment history, this scenario might move the option toward the bottom of your list of good outcomes.

I just stop paying my citi 70.00 monthly and my usbank 350.00monthly;

But I still have discover, boa, wamu, target, chase, macys, GE and USAA.

So they certainly going up? holly toledos... I am fried !!!!!!!!