Unsecured loans ? ? ?

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Old lady
 
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Unsecured loans ? ? ?

Postby Old lady » Thu Feb 05, 2009 10:18 am

Why do Credit card companys say they are giving you an unsecured loan and when things happen and you can't pay they can take your house away from you in a lawsuit? ? ?


Old lady
 
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Postby Old lady » Thu Feb 05, 2009 11:19 am

Actually just want to know if this has ever happened to anyone ? ? ?

When I called for a BT the man at the credit card company talked me into a much larger amount than I wanted. So I took it and payed off a lot of other bills, but not all the credit cards I owed on. Now unfortunately I have lost all my money and cannot pay the big monthly minimum payments on all the cards. I called and tried to ask the cc people what I can do, and asked if they could take my house away if I can't pay, and they said NO, it is an unsecured loan. But from what I have been told now is they can get a judgment and take my house away from me that I own half of.
This has me worried sick as I have noplace to go if they do that.

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The Fuzz
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Postby The Fuzz » Thu Feb 05, 2009 12:00 pm

I wouldn't believe that. As someone who has worked in the collections world for years, I can say that your house is safe. Even in a bankruptcy they won't take your means of survival away from you. It is true that if you are in enough debt or if you file a chapter 7 bankruptcy that they may force you to sell some of your more valuable and unneccessary assets, but your house is safe. It is just a collection scare that they use.

My recomendation is to read the Fair Debt Collection Practices Act This is the law that governs what debt collectors can and cannot do. It tells you pretty much exactly what they can and cannot say too. My advice to anybody dealing with any collection agency is to tell them not to contact them by phone and to communicate everything in writing. What they say on the phone is hard to prove, but everything they write can be used against them. Let's see them threaten to take your house away in writing.

What they can do is file a lawsuit against you for the amount of the debt. If they obtain a judgment against you, then the court will require you to pay it. You will be able to work out a payment arangement with the court to do that. They aren't going to just storm your house and start taking things though. This is the beauty of living in America. There are laws they have to follow. A judgement is just like getting a fine for a large traffic violation. People don't always have the $3000 to pay for their DUI, so the courts work out a payment plan.

Don't worry too much, Old Lady. (gosh that feels weird to say lol) There are several steps your credit card company will go through before it goes to judgment. They will try to collect from you first. Then they will try to negotiate with you to pay less. Then they may sell it to a collection agency that will do the same thing. It could actually get bounced around between a couple collection agencies before they finally try to get a judgement against you. Even then, there is a process that has to be gone through. Your house is safe, but you will have to work something out to pay off the debt. Many people are in this same situation right now, so the credit card company has probably already created a process for it.

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Cucumber
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Postby Cucumber » Thu Feb 05, 2009 2:35 pm

Yea with unsecured loans the main danger if you can't pay is losing your creditworthiness, not your house or basic assets. Be prepared to have your FICO score go down the drain but other than that things aren't going to be taken away. The reason they can repo a car is because that is a secured loan (secured/collateralized by the car) and that is why they can take the car back from you.

But unsecured revolving credit is totally different since it unsecured. The only thing it is secured by is your creditworthiness so that is what you lose :(
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fffresh
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Postby fffresh » Sun Feb 08, 2009 10:47 pm

"What happens if I don't pay my credit card bills?" This is a question I have been seeing quite frequently as of lately. Fortunately, as mentioned above, not too much will happen to your assets. If you need to make use of your credit now, or anytime within the next 7 years, please understand it will be difficult. However other that that I would not expect a whole lot of action on behalf of the creditors. They can garnish your wages possibly depending on your income but are unlikely to pursue that unless you have a massive amount of credit card debt.

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Postby Multi-Purpose » Mon Feb 09, 2009 3:24 pm

I have a few younger friends who have defaulted on credit card bills, not much though something like a few hundred or two to three thousand max. Nothing ever happened other than their credit being shot. They received collection notices in the mail and I think they got phone calls too but other than that nothing happened.
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indianamom
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Postby indianamom » Mon Feb 09, 2009 8:15 pm

Well if that is the case you might as well charge your new car to a credit card and then it can never get repossessed if you don't pay the bill.

:) I'm just joshing with you.

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The Fuzz
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Postby The Fuzz » Mon Feb 09, 2009 9:12 pm

That is probably one of many reasons that keep the dealerships from allowing you to do that. ;) They aren't excited to pay another two or three percent of the price of the car just to accept your credit card. I bought a car in December and asked them how much they would allow me to put on a credit card. Only $3000 could go on the card and the rest I wrote a check for. I was ready to put the whole thing on the AMEX and then pay the bill. That would have been a nice chunk of cash back if I could have done that...

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Postby Cucumber » Tue Feb 10, 2009 2:07 am

What about the agreement Amex (and all the others) have that says merchants can't set a minimum or maximum for credit card payments :confused: Why are dealers getting away with this???!! You should be allowed to buy your card with a credit card in full.
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Postby Floppster » Sat Mar 07, 2009 9:46 pm

The Fuzz wrote:I wouldn't believe that. As someone who has worked in the collections world for years, I can say that your house is safe. Even in a bankruptcy they won't take your means of survival away from you. It is true that if you are in enough debt or if you file a chapter 7 bankruptcy that they may force you to sell some of your more valuable and unneccessary assets, but your house is safe. It is just a collection scare that they use.

My recomendation is to read the Fair Debt Collection Practices Act This is the law that governs what debt collectors can and cannot do. It tells you pretty much exactly what they can and cannot say too. My advice to anybody dealing with any collection agency is to tell them not to contact them by phone and to communicate everything in writing. What they say on the phone is hard to prove, but everything they write can be used against them. Let's see them threaten to take your house away in writing.

What they can do is file a lawsuit against you for the amount of the debt. If they obtain a judgment against you, then the court will require you to pay it. You will be able to work out a payment arangement with the court to do that. They aren't going to just storm your house and start taking things though. This is the beauty of living in America. There are laws they have to follow. A judgement is just like getting a fine for a large traffic violation. People don't always have the $3000 to pay for their DUI, so the courts work out a payment plan.

Don't worry too much, Old Lady. (gosh that feels weird to say lol) There are several steps your credit card company will go through before it goes to judgment. They will try to collect from you first. Then they will try to negotiate with you to pay less. Then they may sell it to a collection agency that will do the same thing. It could actually get bounced around between a couple collection agencies before they finally try to get a judgement against you. Even then, there is a process that has to be gone through. Your house is safe, but you will have to work something out to pay off the debt. Many people are in this same situation right now, so the credit card company has probably already created a process for it.


That is probably the best reply I have ever seen on this chat board. Detailed and hits the nail on the head *THUMBS UP*
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