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Credit Card Debt: about to hit 6 months of default

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  1.  
    • CommentAuthorwill4469
    • CommentTimeSep 24th 2009
     
    I am coming up to the 6 month point of not paying on some of my credit cards in about 3 weeks and i know that this may be the magic number for them to turn the debts over the credit agency's. My balances are up to 26K+ right now (they were around 20K when this started, but with insane apr's, late fees, and overlimit fees it quickly became 26K). I have very little capital right now (read none) and 2 low paying part time jobs. The only thing of value (besides my car worth $4500) is a painting my godfather painted for my baptism in 1983. He became a famous western artist and this painting is now worth in the 40-50k mark. I want to start a small business and need to clean up this debt. I am thinking about going to a local bank to see if they will give me a personal loan with the painting as collatarol. If they won't with my bad credit from the credit cards (i have kept up with a personal loan and my student loans) where do i go from there. From what i've read its best to deal with the original creditor. What will my credit report say if it goes to collection agencies and will it say something different if i ending up paying the collection agencies instead of the original creditor. For example, will it say charged off, then settled with a collection agency? I'm getting down to the wire on this i suppose and need advise. I also sent all of my credit cards about a month ago explaining my situation, but i have ingnored (blocked) recent calls.
    thanks in advance
  2.  
    hey will,

    I doubt any bank anywhere will loan you a dime... LOL...

    I would keep the painting and not even consider it an asset unless it has absolutely no value to you of any kind. It just seems like it would suck letting something like that go.... you'd probably regret it later on!


    Ok so you can check your credit report at http://annualcreditreport.com and see which collection agencies have been assigned or sold your account. But if you don't have any money to settle... then it won't really matter. Its ok if a collection agency bought your debt... and actually they are more likely to settle for less dollars... cause they likely only paid like 15% of the face value of the debt.

    You can sell the painting and settle with all your creditors. You could then use the rest of the money for savings and investment. Is there a link on the internet where I could see this painting? I'm just curious... I like paintings and I love America's western heritage.

    barrybroome (at) debtprison.net
    • CommentAuthorwill4469
    • CommentTimeSep 30th 2009
     
    I went and checked my report thanks to your link. Equifax said that all of my cc accounts are 31-60 and some are 90-120 days delinquent. I then checked all of the individual accounts and all of them don't show my delinquency till june or july, but when i look at my last payments a lot of them were in April, so the credit report is giving me a month or two extra in some cases so i'm at 4 months without paying at this point. Also stangely one chase card which said it was an open account showed a balance of zero when it actually has a balance of 2500 so i don't understand that error.
    I sent letters to all of my credit card companies awhile back explaining that i can not make any payments right now. I have recently received some responses, very generic i might add, that say we can not accept your request and some say that if i call i can get reduced interest. This says to me they aren't ready to sell the accounts and are not willing to negotiate, what do you think?
    I don't have any pictures of the painting, i think even though its kinda nuts to go to a bank right now and ask for a personal loan with that collateral i might call and see. I don't see what they have to lose if they have 200% collateral and all of my installment accounts have perfect payment history and credit cards for 8 years before this year. Selling it would be a big decision, do you think i have a month or two before they sell my accounts to collection agencies? If i do get some cash flow, is it ok to negotiate the settlement on the phone, will cc's go for 20, 25, or perhaps 30%?
  4.  
    Yeah when I was in default it seemed the credit report was one or two months behind.... which was good.

    Now keep in mind that each creditor will handle your debt differently. Some will sell off the debt to a collection ageny while other won't and may sue you instead. If the original creditor is in possession of the debt I doubt they will take less than 50% so soon. If the debt is sold to a collection agency then they might go lower but you're back to playing the waiting game all over again with them. You can negotiate on the phone... just have your game together before you call and get everything in writing. Here's an article I wrote awhile back that might help...

    http://debtprison.net/wordpress/170/collection-agencies-get-everything-in-writing/
    • CommentAuthorwill4469
    • CommentTimeOct 2nd 2009 edited
     
    I read the link, that is some crazy stuff right there. Who do you think might sue, most of the account have 2k limits and about 2600 balances. American express is 4k and BoA is 10K, i can see BoA trying to sue, the credit report shows me defaulting with them in August, Amex July so that gives me some time. How is BoA to deal with, how about Amex?. Also one of my accounts is Paypal buyer credit at 1300, do you know of anyone that has settled with them? Most of these balances are inflated by the last few months of 30% apr late fees and overlimit fees. When negotiating can i negotiate say the 50% you mentioned from the time of default or is it with the current inflated balances? This would make a big difference.
  6.  
    Hey Will,

    I don't know about paypal but its probably the same as any other collector. Most likely none of the creditors will sue until past 6 months. The people I know who were sued was around the 12 month mark. Any of these creditors may sue you. There's no criteria, it seems to be a turkey shoot. Your best bet is to communicate with them once you are ready to settle and let them know this is all the money you have. If they believe you then they'll most likely take it. Meanwhile, when you do talk with them or write them.... just let them know you are broke and are actively working to raise money to satisfy this debt. I wouldn't elaborate on any details to them though.

    Make absolutely sure that you are not applying for any new credit because that will let them know that you have some money.

    I wouldn't even bring up the 'amount when I defaulted' because according to their contract with you... you owe them the interest too. So maybe just offer them a lower percentage amount. Also, it never hurts to go and talk with a lawyer for some advice. Or perhaps even let the lawyer handle all these accounts for you.

    However, if you do end up with plenty of money to settle these debts, then you may not need a lawyer, you can settle with them yourself and negotiate.

    I have a question for you. Do you think my forum would better serve people if I didn't have to approve their application? I know the approval process takes some time (depending on when I get to my computer) and this lapse in time prevents many from asking questions. My thoughts on it though are that it prevents spammers like employees of debt settlement companies coming on my forum and posting junk... and the 'wait period' probably eliminates readers with less serious questions or concerns. I was just wondering what you thought....
    • CommentAuthorwill4469
    • CommentTimeOct 4th 2009
     
    Thank you much for those answers. I think approving the application is a smart move based on the reasons you gave, settlement companies, those whose aren't serious, etc. I was just being impatient when i sent you the first email asking my questions because the registration wasn't instant as some are accustomed to and at that point i didn't know how long it would take (it wasn't long). Anyone who is serious will take their time and do reading on these forums and article's as well. They can certainly wait till they post their own question. Not only that, you provide your own email up front to the public so you are providing communication from the get go.
  8.  
    Ok thanks for the perspective!

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