Author Topic: credit card debt question  (Read 2296 times)

Offline surfivor

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credit card debt question
« on: June 19, 2017, 08:21:24 AM »

 I am asking this for someone .. This woman is divorced and does not have alot of money, she has worked full time all her life but doesn't get paid alot. Her x husband didn't help her to pay the bills so she owed around $3800 on a credit card. I think she was paying $100 a month and they somehow started demanding more money that she didn't have so she got angry at the time and stopped paying them. They are back after her.

She was asking me, is it better for her to just send them $10 a week even if they are demanding more money and ignore that demand or what to do ?

Offline Carl

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Re: credit card debt question
« Reply #1 on: June 19, 2017, 08:56:00 AM »
  I am not a lawyer,nor did I play one on TV,but if she shows intent to pay the legal system most likely will support her even if payment is not at a level the credit company likes.. BUT the credit contract may stipulate a minimum percentage payment that current hardship  causes her to re-negotiate..

I pay something ,every time I get a bill ,Mine are medical though and not contractual credit...so their may be differences.
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Offline Smurf Hunter

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Re: credit card debt question
« Reply #2 on: June 19, 2017, 10:29:13 AM »
What is the objective here?  To simply avoid the debt going to collections?  Protection what's left of her credit score?

Offline Carl

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Re: credit card debt question
« Reply #3 on: June 19, 2017, 10:50:12 AM »
Karma Smurf ,great post.
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Offline surfivor

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Re: credit card debt question
« Reply #4 on: June 19, 2017, 05:33:43 PM »
What is the objective here?  To simply avoid the debt going to collections?  Protection what's left of her credit score?

 I don't know exactly, she doesn't really think things out that well. She just thinks she's supposed to try to pay it it seems.

When she was harassed previously and felt she was treated unfairly she became angry with them decided not to send anymore money for awhile, then sometime after that she got threatening letters from a lawyer.

She asks me is there a way for her to pay them according to what she wants or what should she do, and what was my advice. I asked her how much is that, $100 a month ? - she said no she would want to pay $40 a month. I told her, I don't know but I'll post the question here online and see what other people think.

 I had just called her on the phone a few minutes ago but she was tired and didn't feel like talking about it.
 

Offline mountainmoma

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Re: credit card debt question
« Reply #5 on: June 19, 2017, 05:50:55 PM »
The thing is, if she pays too little a month, she will be paying basically just interest, and never get it paid off. There are places that can tell her her rights, she should look this up. I know they do have laws on the minimums that should be paid, so that people are not left paying nothing but interest forever.

Just to make the math easy, if it was $4,000 at 12% simple interest, it would be $40 a month in interest ! So, if she paid $40 a month, she would be doing that her entire life. Might as well pay nothing, let it go to collections and ruin credit and negotiate if that amount was all she was going to do.
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Offline Carl

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Re: credit card debt question
« Reply #6 on: June 19, 2017, 06:19:08 PM »
MM is right. Better to get a different loan from a bank or pay off the credit card fast to save much money.Credit card % is outrageous.
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Offline outoforder2day

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Re: credit card debt question
« Reply #7 on: June 20, 2017, 10:05:53 AM »
I don't know exactly, she doesn't really think things out that well. She just thinks she's supposed to try to pay it it seems.

When she was harassed previously and felt she was treated unfairly she became angry with them decided not to send anymore money for awhile, then sometime after that she got threatening letters from a lawyer.

This is the worst possible thing to do. She needs to think it through. She is liable for the debt and she must pay it somehow. Getting angry won't help, but it will certainly hurt her in the long run.

Here's what to do if you're in this situation:
  • Review your finances. Find out what you can afford to pay. Note: You want the debt gone! Don't low-ball here. Stop with the nice-to-haves for a while and get the debt gone!
  • Call them. Tell them you've been in a bad situation because of X (make up a story if you have to). Ask them for help. Tell them you want to settle and are willing to work with them. Most important thing: Suck up your pride, and be humble and nice.
  • They will tell you you have to pay the full amount. Tell them you can't.
  • Negotiate - This is hard, but you can do it. Make sure you get, in writing, that they will not submit the problem to the credit bureaus. I've heard of people settling for half or less of the balance.
  • Agree to terms - They should knock off a good bit of the balance, in exchange for you closing the card. GET IT IN WRITING.
  • Pay - Stick to the terms. They're doing you a favor, you'd better keep your end of the deal. It may be a lump sum payment, it may be monthlies. Make sure it happens.
  • Once your done paying - Close the account. Reflect on life's lessons here. Don't make this mistake twice.
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Offline Carl

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Re: credit card debt question
« Reply #8 on: June 20, 2017, 10:12:55 AM »
Karma out of orderdude
Stop complaining about life and start Celebrating it .

I've reached the age where there is little left to learn the hard way.

If you had only one year,one month,or one day...Would you live your life differently?

Offline Smurf Hunter

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Re: credit card debt question
« Reply #9 on: June 20, 2017, 10:16:41 AM »
I realize many people think differently from me, but this is another case of more emotional time and energy spent worrying than understanding or fixing.

Also, her choice to "make a statement" by not paying shows a lack of understanding of the circumstances. Similarly I've heard of low level criminal offenders blowing off court appearances, getting an arrest warrant and ultimately getting into WAY more trouble than they originally were, simply for "blowing off" the system.

I'm not saying to comply with every demand from authority, but choose your battles wisely.

This is a shame as much of it could have been avoided.

Offline surfivor

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Re: credit card debt question
« Reply #10 on: June 20, 2017, 10:36:57 AM »

Should she try to get a loan from a credit union or someplace at a lower interest rate ? Would that be easy to do ?

Offline Smurf Hunter

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Re: credit card debt question
« Reply #11 on: June 20, 2017, 10:54:44 AM »
Should she try to get a loan from a credit union or someplace at a lower interest rate ? Would that be easy to do ?

Process-wise it's extremely simple. Whether she qualifies I have no idea.

Offline surfivor

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Re: credit card debt question
« Reply #12 on: June 20, 2017, 11:28:51 AM »

 Is there any way to argue that you are poor and these high interest rates are immoral, unfair or something to that effect ? I know of course there is a counter argument and it's a political thing but without getting into politics etc are you just screwed possibly or there's nothing anyone can do etc ?

Offline kid_couteau

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Re: credit card debt question
« Reply #13 on: June 20, 2017, 11:30:55 AM »
Process-wise it's extremely simple. Whether she qualifies I have no idea.

If she is having this much trouble with her credit card she probably has such bad credit that a bank or credit union wont touch her.

Offline outoforder2day

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Re: credit card debt question
« Reply #14 on: June 20, 2017, 11:43:43 AM »
Is there any way to argue that you are poor and these high interest rates are immoral, unfair or something to that effect ? I know of course there is a counter argument and it's a political thing but without getting into politics etc are you just screwed possibly or there's nothing anyone can do etc ?

Yes and no. She agreed to the terms when she took that card. That's what I meant when I said that she's liable. As such, arguing morality, or fairness is irrelevant and will do more harm then good.

Again, be humble and ask for help from the credit card company (or debt collector if it's gone that far). Explain your on hard times and can't afford the payment. Ask to settle. Find out what they're willing to work with you on and what they're not. Arguing won't help. Getting indignant won't help. Trying to politely negotiate with them will.

As to the loan, yes you can do that. What's to stop her from getting into the same problem again? Instead, ask why would she want the loan? Lower interest rate and payment. So go into negotiations with the CC company with that goal in mind. Try to settle for half the debt with no interest. Who knows, they might bite. If not, mybe they'll agree to 4% on half paid over 12 months?

Everything is negotiable.
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Offline osubuckeye4

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Re: credit card debt question
« Reply #15 on: June 20, 2017, 01:09:15 PM »
I am asking this for someone .. This woman is divorced and does not have alot of money, she has worked full time all her life but doesn't get paid alot. Her x husband didn't help her to pay the bills so she owed around $3800 on a credit card. I think she was paying $100 a month and they somehow started demanding more money that she didn't have so she got angry at the time and stopped paying them. They are back after her.

She was asking me, is it better for her to just send them $10 a week even if they are demanding more money and ignore that demand or what to do ?

It's impossible to answer because you're not getting the full story from her.

Credit card companies don't just "demand more per month" out of the blue. If anything, they prefer you make minimum payments because then you are essentially just paying them interest every month and they are going to get that money in perpetuity.


My guess is that she had a balance, continued using the card and ran up a higher balance... and her minimum payment rose in accordance. She then got to the point where she couldn't pay the minimum in full, so she stopped making the minimum payment and got hit with a bunch of late fees and got her credit dinged. Now, her minimum payments are even higher as a result... and her credit is trashed.


She's really got 4 options here:

1) Pay off the card (seems unlikely/impossible)

2) Play credit card roulette and apply for a new card with a promo balance transfer/0%/low interest offer and roll the balance to that card and start paying off at a reduced interest rate/reduced minimum payment (might be possible... really depends on her credit)

3) Contact the credit card issuer and explain the situation, see if they can freeze the card and put her on some kind of a payment plant at a reduced interest rate (a lot of CC companies will hear you out on this,  might make her jump through some hoops/submit documentation, but it is better than watching her credit get destroyed and getting eaten alive by penalty/late fees)

4) Talk to a lawyer and consider more drastic options like bankruptcy... I wouldn't recommend this because $4000 in the grand scheme of things isn't that large of an amount.


It's probably in her best interest to call the CC company and see if they will work with her. I agree with others who have said that she really needs to change her attitude/approach on this. She's not going to get anywhere by taking a "screw you" attitude towards her CC issuer
« Last Edit: June 20, 2017, 01:15:11 PM by osubuckeye4 »

Offline surfivor

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Re: credit card debt question
« Reply #16 on: June 20, 2017, 01:29:23 PM »
Quote
It's probably in her best interest to call the CC company and see if they will work with her. I agree with others who have said that she really needs to change her attitude/approach on this. She's not going to get anywhere by taking a "screw you" attitude towards her CC issuer

 Apparently her ex husband told her to not talk to them on the phone because they record everything you say and will or may use it against you in court or something to that effect. I have no idea if there is any validity to that at all. I always pay my credit card bill each month so I have no experience with this kind of thing

 Anyway, how to you go about asking for a reduced payment amount or a change in the interest rate ? If you just say you can't afford it then they might actually listen to you ?


Apparently here last recent phone call was something like:

Her: I want to speak to the lawyer so and so

Them: That person is deceased we just use his name on our letterhead.

Her: Well I want to speak to the person in charge or your lawyer

Them: I am the person you need to speak to

Her: You are a secretary

Them: No, I am a service person (whatever)

Her: I want to talk to someone else (something like that)

Them: Do you want to end this call ?

 She then hangs up but later told me she should not have done that. I know she is like that sometimes etc. I tried to tell her to avoid petty stuff like that
« Last Edit: June 20, 2017, 01:37:46 PM by surfivor »

Offline outoforder2day

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Re: credit card debt question
« Reply #17 on: June 20, 2017, 01:51:11 PM »
Apparently here last recent phone call was something like:
Her: I want to speak to the lawyer so and so
Them: That person is deceased we just use his name on our letterhead.
Her: Well I want to speak to the person in charge or your lawyer
Them: I am the person you need to speak to
Her: You are a secretary
Them: No, I am a service person (whatever)
Her: I want to talk to someone else (something like that)
Them: Do you want to end this call ?

Wow... yeah, no wonder no-one wants to work with her. She's being belligerent and rude. So judging by the lawyer reference, this is already in collections. If you're polite, you can work with them to lower the amount due and come up with a payment plan. Yes, it is that simple.

I would highly recommend she get someone else to do the talking since she is clearly too emotionally charged in this situation. I had to be that person for my mother, which is why I know about this topic.
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Offline osubuckeye4

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Re: credit card debt question
« Reply #18 on: June 20, 2017, 01:57:48 PM »
Apparently her ex husband told her to not talk to them on the phone because they record everything you say and will or may use it against you in court or something to that effect. I have no idea if there is any validity to that at all.

Ugh, he sounds like a piece of work.

Yes, almost every credit card company does record what you say (they let you know this in advance). It's mostly for training/QA purposes and internal quality control. Most use the NICE (Israeli company, really cool software that my corporation uses as well) system.

The purpose of the system is not to entrap customers in lies so that they can take them to court and play their words against them. They simply want to make sure their low level employees aren't lying to customers and promising things that the company can't deliver, or, which could get them in hot water. Supervisors/execs also can scan through that software to notice common words used, or inappropriate words used. If you're a VP at Sprint and you run a search for "T-Mobile" or "Verizion" you can see how often your competitors are coming up in conversations with your call center employees. You can also look up "f***" and reprimand any of your call center employees who are swearing at customers... or, you can coach employees who are getting sworn at a lot on how to avoid it coming to that.


That said, sure... if you call in and outright lie to them I suppose they can pursue legal action and potentially use your lies against you in a legal setting (those laws vary by state). That mostly comes into play for things like fraud claims though.

For example: You call in and tell them that you want to dispute a bunch of charges. They ask you what charges you would like to dispute, you tell them there were 12 charges posted in Aspen, CO totaling $9,000... but, you've never been to Aspen... they do some very basic investigation and find out that you actually were in Aspen that weekend and did indeed rack up those charges. I'm sure that they could use that against you if it made sense for them to do so. Most likely though, at that point they have a bunch of other things to use against you as well.


All of that said, it's VERY unlikely that your creditor is going to take you to court over $3800 in the first place (that's nothing to them in the grand scheme of things, they are going to send you to collections before ever involving the courts)... and outrageously unlikely that you're ever going to make it to a trial setting (where that recording might or might not be played) over a $3800 balance. Those companies are going to settle/work out an agreement before they have to get lawyers/courts involved and pay all those fees, which are most likely going to exceed the $3800 they are fighting over.

Anyway, how to you go about asking for a reduced payment amount or a change in the interest rate ? If you just say you can't afford it then they might actually listen to you ?

In order to get a meaningful decrease you generally have to agree to freeze the card. Most companies aren't going to agree to lower someones (especially someone with a delinquent payment record) rate and also keep their credit available to them, that's just asking for abuse.

If you call and explain the situation and explain that you really want to work with the company to pay off your obligation, they may or may not work with you and meet you somewhere in the middle.

That said, some of these companies do have REALLY bad customer service at the lower levels, and you could call in and end up talking to a brick wall that is just reading a script and who will refuse to work with you. If that happens, it happens. You tried to negotiate in good faith and they wouldn't work with you... might be time to set up a consultation with a lawyer, or, wait for it to get thrown into collections and then try your luck at negotiating with the collections company.




At the end of the day... if you call in and explain your situation and they tell you to pound sand and refuse to work with you at all. That's not going to hurt you in any way if those words do come up in a legal setting (which is extremely unlikely). If anything, you're most likely going to be asking them to play that recording so you can prove that you tried to negotiate in good faith, and they refused your offer.
« Last Edit: June 20, 2017, 02:03:49 PM by osubuckeye4 »

Offline Carl

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Re: credit card debt question
« Reply #19 on: June 20, 2017, 02:30:50 PM »
After the details above....beg for mercy.
Stop complaining about life and start Celebrating it .

I've reached the age where there is little left to learn the hard way.

If you had only one year,one month,or one day...Would you live your life differently?

Offline surfivor

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Re: credit card debt question
« Reply #20 on: June 20, 2017, 02:33:54 PM »
She says the credit card has not been used at all for 2 or 3 years. She said since December of 2013 but then wasn't sure if it was 2014. So that is how old he debt is .. She says after you stop paying they freeze the card.

she thinks she originally owed $3800 and now owes $4300 if I understood correctly that increase was due to late fees or something similar

She bought a car with a car loan in February of 2014 which to me seemed like too much money for a used car with high mileage. But that despite the credit card problem it appears

« Last Edit: June 20, 2017, 02:42:51 PM by surfivor »

Offline Carl

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Re: credit card debt question
« Reply #21 on: June 20, 2017, 03:05:00 PM »
  Unless she is family or you are in love...I would not get involved as a loan co-signer or ? as this looks like something to advise,but walk or run away from participating in...just my unemotional thought.
Stop complaining about life and start Celebrating it .

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Offline surfivor

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Re: credit card debt question
« Reply #22 on: June 20, 2017, 03:09:41 PM »
  Unless she is family or you are in love...I would not get involved as a loan co-signer or ? as this looks like something to advise,but walk or run away from participating in...just my unemotional thought.

 yea, I am just trying to give her advice .. I am not loaning her any money

Offline Zef_66

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Re: credit card debt question
« Reply #23 on: June 21, 2017, 10:26:28 AM »
I would suggest her to start finding things to sell. We all have extra crap in our homes. Have her start listing it on craigslist. Or do some yard sales. And get rid of the stuff. And make some money to start paying off the debt. Maybe you will strike something in her that sees that getting rid of excess and paying off debt are good things.
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Offline osubuckeye4

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Re: credit card debt question
« Reply #24 on: June 21, 2017, 10:37:10 AM »
After the details above....beg for mercy.

Yea, I hadn't seen that additional portion.


It sounds like there is potentially a lot more going on than you're being told. Not saying that she's lying to you, but she might be trying to sugarcoat things, or, it's possible that she is unaware of what is actually going on and is just winging tidbits of the puzzle and hoping you can put them together for her (which is impossible unless you get access to the accounts and can do a thorough review).

Your first post made it sound like she was dealing with a credit card balance on an active card that was getting out of hand, that last post makes it sound like she is dealing with a past due balance that is sitting in collections with an agency that is ready to pursue litigation. The follow-up posts make it sounds like there might be additional debt on top of the credit card balance that she's struggling with.


Personally, I'd try to distance myself. Tell her that she should really sit down and draw out a budget and figure out if it's possible to pay down the debt. If it's impossible to pay off her debt obligations by following a budget, her next step is to talk to an attorney who might be able to offer legal options. Many (not all) attorneys offer free consultations.

Offline TheLastBoyscout

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Re: credit card debt question
« Reply #25 on: September 25, 2017, 09:02:13 PM »
I believe that a good start would have been to call them and negotiate a payment plan.  Most will work with you but, you have to pay them and not get pissed off and stop. 
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