Abandon card payment

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TracyMcLoud
 
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Abandon card payment

Postby TracyMcLoud » Sat Nov 14, 2009 6:13 pm

My sister financed a $40,000+ divorce on 2 cards. She has been making payments on the cards for while (around $2,000/month) and she has a credit score of 730.

Recently she got a letter from the credit card company informing her that her interest will be raised to over 21%.

There is no way she can pay them off at this rate.

She called me yesterday and told me that she is considering stopping payments altogether.

I researched online and found that if someone did not do anything illegal to get in debt, they cannot go to jail for not paying the debt.

Is this true?

I also read that different states have different laws - she lives on Oregon, can the credit card companies put a lien on her house?

Thank you.


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Postby Floppster » Sun Nov 15, 2009 8:37 am

You should definitely start looking for a attorney to answer this question correctly. Also, if she has a house (which is paid) and can afford to pay 2k / month I am sure there are several banks offering her a 50k loan to pay of her 40k in cc debt at a very good rate. CC rates are always higher than bank rates and it is quite strange to be even able to use a cc for such scenario.
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Cucumber
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Postby Cucumber » Wed Nov 18, 2009 2:32 am

Yeah I agree you need to talk to an attorney. Don't fall for those debt settlement things you hear on the radio because they are a total scam. They take a deposit from you for months and months and then try and use it to make a lump sum payment. I can describe it more to you but in a nutshell it is a scam.
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DoingHomework
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Postby DoingHomework » Wed Nov 18, 2009 2:06 pm

Cucumber wrote:Yeah I agree you need to talk to an attorney. Don't fall for those debt settlement things you hear on the radio because they are a total scam. They take a deposit from you for months and months and then try and use it to make a lump sum payment. I can describe it more to you but in a nutshell it is a scam.


Cuke,

I'm curious about that. Can you explain a bit what you mean by taking a deposit for months? PM if you'd like.

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Postby Floppster » Sat Nov 21, 2009 9:24 pm

DoingHomework wrote:Cuke,

I'm curious about that. Can you explain a bit what you mean by taking a deposit for months? PM if you'd like.


Well the way these "Debt Settlement Firms" operate is they talk to you about how much you owe. After that you will give them a check. They will then tell you to not pay your CC. You will get notice over notice from the CC Company. They still tell you not to pay. Once you receive the note that your CC Company is about to throw in collection they'll contact your CC Bank and talk to them about it and make a deal. At the end the company will make a deal with the CC Company and often buy the debt from your CC Bank or it remains at your current CC Bank however payments will be made through the Debt Settlement firm. It may save you $10k from the $40k however you will be pretty much screwed for the rest of your live. It will affect your credit and even though it is supposed to disappear within 7 or 10 years it won't. It will remain on the bank records. Good luck if you should ever need another loan. Oh btw the check you gave the settlement firm in the first place will not come back to you.

It may make your live easier in the short term but you'll get screwed in the long term.

Hope that helps

BTW I got these info's from a Radio Show. They actually had a 45 minutes Talk show about it. Was quite interesting.
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DoingHomework
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Postby DoingHomework » Mon Nov 23, 2009 10:55 am

Thanks. I always knew most of the debt settlement deals were scams but I never realized exactly how they worked. That makes sense.

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Postby Mogul of Pineapples » Mon Nov 23, 2009 11:16 pm

Oh yeah the debt settlement scam is big. I cringe everytime I hear commercials for them. If only the people knew what they were getting themselves into, they would never use them.
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Postby alsteig » Tue Jun 01, 2010 3:26 pm

In the U.S. their is no debtors prison anymore in any state. Your sister sounds like a prime candidate for Bankruptcy. With unsecured debt that high she is going to pay approx. 20k when it is all said and done with debt settlement her cred will still be screwed. (Agreed Debt Settlement is a scam) She is going to pay approx. 2500 for BK and be able to keep her primary res. As long as she doesn't have some weird financial situation this should be done in a few months. Her cred will be tanked for 4 years and then she can start to rebuild if she is on top of things she can be buying a house in 7. Weigh the costs and benefits of each action and feel free to ask on here.
Let us know what she decides to do.



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