Have you been successful in negotiating lower payments on delinquent accounts?

[SadDebtor2]

I've used my credit cards recently, and I'm afraid that the trustees will consider those charges fraudulent. I consulted with an attorney briefly (we have a meeting next week), and without really looking at my paperwork, he advised me to keep making the minimum payments for the next 3 months.

The problem is that the credit card companies have increased the mininum monthly payments significantly. I believe this is due to 2 reasons: they've added late fees and they are requiring me to make 2 minimum monthly payments.

For instance, the minimum payment on one of my Chase credit cards used to be $98. The account now shows that the new minimum payment is $239. According to Chase, "Payment of $98.00 is past due. Please pay this amount today. This amount is also included in your new minimum payment due shown here and is due on x/x/2014."

The system will not allow me to make a payment of $98. It requires a payment of at least $239.

The same issue seems to apply to my other credit card accounts.

I don't have the money to pay $200+ on 4 or 5 accounts.

What are my options? Should I call each company, explain that I am experiencing financial difficulties and try to negotiate a lower payment? Have you been successful in lowering your payments? How low can I go? Would these companies accept a payment of $50, for instance?

Thank you!

[keepmine]

Why do you believe the charges are fraudulent? What did you buy?

[AngelinaCat]

If you have been using the cards for ordinary household expenses--even an emergency like suddenly needing a new hot water heater--you should be okay. On the other hand, if you bought expensive jewelry, and made no effort to pay the charges, then the creditor would be justified in thinking fraud.

As to negotiating with the card-holders: You can certainly try, but don't expect any positive results. We tried to negotiate with our card holders--that we could make payments on the principal amount if they would waive the late fees and the interest. That was a non-starter. I guess they were determined that they were going squeeze as much out of us as possible. Instead, we filed BK and discharged their debt. So they got a big fat ZERO from us for their lack of cooperation.

Good luck!

[SadDebtor2]

Why do you believe the charges are fraudulent? What did you buy?

I read somewhere that using credit cards right before filing may be considered fraudulent if you charge more than $600 to each card.

I didn't buy anything fancy - just groceries, dry cleaning, gas (car), tires for the car, some pieces of clothing, restaurants, etc. I also have to spend more money on the car, since it's having issues. As far as "jewelry", I probably bought one or two pairs of earrings and bracelets while I was grocery shopping at Target, but those were less than $10 each.

[keepmine]

Actually, here's what the bk code says-note it regards luxury purchases. Nothing you described is a luxury.



(i) for purposes of subparagraph (A)--

(I) consumer debts owed to a single creditor and aggregating more than $500 [$550] for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and

(II) cash advances aggregating more than $750 [$825] that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable; and

[switch625]

For instance, the minimum payment on one of my Chase credit cards used to be $98. The account now shows that the new minimum payment is $239. According to Chase, "Payment of $98.00 is past due. Please pay this amount today. This amount is also included in your new minimum payment due shown here and is due on x/x/2014."

The system will not allow me to make a payment of $98. It requires a payment of at least $239.

I got around this issue by using my bank's bill pay service to pay the past due amount. The banks have always accepted the bank bill-pay payment regardless of the amount. Chase is recognized easily by online bank systems when the bill pay is set up. You can always send a paper check too for the $98. They are not going to send it back to you because it was only $98.

Chase are bleepity-bleeps when it comes to their credit cards and payment structure, except for the hardship repayment plans which have reasonable if not very low interest rates. You call and ask to speak to someone who handles hardship requests (if you Google "Chase Credit Card Hardship Plan", you might get their direct toll-free number and bypass the basic CSR). I got 2% APR on my largest (five-figure) CC balance (down from an average of 9%) and 6% APR (down from 29.99%) on another card (around 6K). My wife got 6% on her balance as well (down from 19%). It's a five-year plan but you have to have auto-deduct and you can miss no more than two consec and a total of five payments over the life of the plan, or else you get kicked out of hardship payment and you revert to original payment terms. You can call them a few days before the due date to get a one time extension on the due date if you are very short-term unable to pay. You may not be able to negotiate the size of the payment per se, but the lower interest will lower you payment and may buy you some time before you file for BK (and a non-ringing phone). The hardship people I dealt with were nice to deal with, but if someone gives you a hard time, hang up and call again and maybe you will get someone else. Also, have your monthly income and expenses ready to provide the hardship rep if you call. lastly, don't accept their first interest offer, ask them to go lower, zero percent if necessary - they already have a chunk of your interest from over the years. Good luck.

[bcohen]

I would not worry about a possible objection to discharge from any of your creditors under the circumstances you describe. The charges are not for luxury items, nor do the amounts in question even come anywhere close to what would make it worthwhile for the creditor to fight. Don't waste your time and money trying to negotiate/catch-up any of these debts.

[SadDebtor2]

Thank you, everyone!

[jacko]

Will this BK solve your money woes? Or do you have budgeting and uncontrollable spending issues?

"As far as "jewelry", I probably bought one or two pairs of earrings and bracelets while I was grocery shopping at Target, but those were less than $10 each."

[LadyInTheRed]

I've used my credit cards recently, and I'm afraid that the trustees will consider those charges fraudulent.

The trustee doesn't care about the charges and is not the one who would decide if the charges are fraudulent. It is the creditor who could petition the court to have the charges declared non-dischargeable. If you opposed the petition, the judge would decide whether the charges are fraudulent based on evidence presented. The creditor's petition could based on the presumption that the debts are not dischargeable because they meet the criteria that keepmine posted, or because they think they can prove you incurred the charges without intent to pay. Even if the purchase were for luxuries, you can do away with the presumption issue by putting 90 days between the last charge and your BK. It is not necessary to make payments to avoid the presumption. Continuing making payments only helps as proof that you intended to pay if the creditor decides to object to dischargeability of debts that are not presumed non-dischargeable (i.e., they are for luxuries or outside the 90 day period). Your charges would have to be pretty large to make it worth the creditor's trouble to object to dischargeability.

Based I consulted with an attorney briefly (we have a meeting next week), and without really looking at my paperwork, he advised me to keep making the minimum payments for the next 3 months.

The attorney gave you conservative advice. It is possible that with more info on the charges and your financial situation, the advice would be different. Other attorneys might give you different advice. Be sure to consult with more than one attorney before choosing one.

[LadyInTheRed]

And to answer your actual question: I could not get creditors to do anything to make my minimum payments manageable. Just a decrease to a reasonable interest rate would have kept me from ever considering BK. They did me a favor by refusing to budge! Now they will get very little instead of having me continue to pay them interest for literally the rest of my life.