Debt advice

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6 posts
RSullivan
 
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Debt advice

Postby RSullivan » Fri Dec 11, 2009 11:59 am

I lost my job over a 6 months ago, been looking ever since. I do a little cash-in-hand work, maybe 10 hours a week to keep the lights on.

I have two credit cards that I cannot pay. One through Chase with a $500 balance, another through Revolution Money with a $2000 balance. I have been dipping into savings to pay them in hopes of finding work, anywhere, but now I am at the point where I am literally tapped dry. I have alerted both to my situation, but have gotten very different stories from them respectively, and I am wondering what to do next.

Revolution Money says that they need in writing, what my exact situation is, and what I should request to be done about it. The woman mentioned having them reduce the balance, etc.

The man at Chase was very pushy, and told me that having them cut my balance, which they can up to 70%, doesn't makes sense with just a $500 balance and a $12 monthly payment. The minimum payment they allow is $10, so that doesn't help either. And then he recommended credit counseling, which I responded that I have no many to see through, and he told me it was free. Two minutes of research online and it is indeed, not free...

My original intention was to simply stop paying the cards. I own no property, sold my car, and don't have a paycheck they can go after. But after speaking with Chase, I remembered that just 2-3 months ago, Payment Protector suddenly showed up again on my statement, after canceling it a year prior. If I signed up for this again, and somehow made my payments for 2-3 months until it kicked in to where I could use the option to not make a payment for 1-3 years, would that be beneficial at all, knowing that I will almost certainly default entirely on the Revolution Card?

In other words, if I completely default on one, and my credit is marked for 7 years, would trying to make payments on the other eventually, make any difference?

Any other advice you fine folks can toss my way?

Happy Holidays


DoingHomework
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Postby DoingHomework » Fri Dec 11, 2009 5:33 pm

I would suggest that the first thing you do is contact Chase again and ask for a specific referral to a credit couseling service. They are correct that the legitimate ones are free.

You can't really totally default on a card. The debt will still be there and interest will still accumulate at high rates. Your $2500 balance could easily be $25000 in a few years if it takes you that long to get a job. If there is any way you can work a few extra hours to keep paying the minimums that would by far be your best bet.

Since Revolution seemed sympathietic to your situation you should at least write them the request they want. They might reduce your balance to something affordable.

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Mogul of Pineapples
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Postby Mogul of Pineapples » Sun Dec 13, 2009 10:58 pm

If at all possible I would really try and find a way to pay the minimum each month. I know that's easier said than done but on that balance I would imagine it wouldn't be too much. Because like DoingHomework said, the debt isn't going to go away anytime soon. After it is charged off it will follow you around for at least seven years, with accumulated interest. Do you have any family members you could go to for help with paying these?
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

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DoingHomework
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Postby DoingHomework » Mon Dec 14, 2009 1:55 pm

Even charged off debt can stay around forever. There is a municipal court trying to collect a debt on someone with the same name as my wife but with DOB differing by 1 day. The debt is from 1991 and was originally for around $50. There are collection agencies trying to collect hundreds of dollars (more that $800).

We are NOT responsible for this and have threatened the court and presiding judge with legal action for harrassment. Every couple of years they recycle teh debt and try to collect it again. Their incompetence in correcting the error is beyond a simple mistake. This has been going on for over 10 years. At this point we have notified the judge in charge that we will personally sue her for harrassment if she does not take steps to correct the errors. It is an unusual position to be in and she knows that if we sue it would be expensive for her since we could easily get the case tried in our hometown rather than in her own court for obvious reasons! So she would have to travel over 1000 miles to appear in a case she would obviously lose.

But, my point is, this stuff comes back for the rest of your life. If they ever track down the person who really owes the debt that my wife is being harrassed for the person will end up oweing much more that their original debt.

RSullivan
 
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Joined: Fri Dec 11, 2009 11:40 am
Location: Chicago

Postby RSullivan » Mon Dec 14, 2009 3:42 pm

Thank you for the responses.

I actually got an email from Revolution saying that they would settle for $1600. That is all well and good, but doesn't help. The minimum is $65/month, coupled with Chase and it is around $80. There is no way I can pay that off. Like more and more places, I live in an area where I am competing with a sizable population of undocumented workers. I know it sounds like BS, but there is no work. Ive applied to every fast food restaurant in town, which I told myself I would never do. I'm down to $20/week in groceries.

So I am going through with this, and I have done my homework as best I can. A someone who retired from the USMC in 2005 (medical) after 2 combat tours, and someone who has been working since I was 13, (30 now) I don't take pride in doing this. But I literally have no choice.

My mother declared bankruptcy a few years back, and as with this, it was a lot less painful than it is made out to be. Her credit is actually not bad at all only 3 years out. She gets credit card apps at good initial rates, she financed a new car, condo, etc. Things got dramatically better for her after she went through bankruptcy.

Obviously for me, with such little debt, in all actuality, that is complete overkill. Ive been told by others who did the same, and a family friend who is an attorney, that this is in fact the best thing. Unsecured debt leaves them with very little option. They will pass it off to collections, and if they want to take me to court, they can do so, they cannot squeeze blood from a stone.

But my real question has to do with Payment protector and Chase. If I enroll again and pay the minimum for two months till it kicks in, would using the feature that allows me to put off payments for 1-3 years be worth it? Obviously I can go the route of paying my debt, which I want to do, but if it isn't going to mean anything to my credit either way, I'm not going to starve myself to do so...

thanks

razeila
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Postby razeila » Mon Dec 14, 2009 9:05 pm

hello,

I may not know you as I am new to this board too, but have you ever considered checking this website out in your state of IL??
Illinois Skills Match Home

it has all kinds of employment and skills info that might be of interest and if I were you, I would check out as much info as I can with sites like this before your job search

because you will find companies and non profit agencies that are not even listed in the usual want ads
your job hunt might actually become a lot shorter, who knows- :)

hope things will work out for you, good luck!



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