Please help me.

[scaredandconfused]

I can't use my real user name b/c I just have too many friends here. Here is the problem.

Early in our marriage (not too long ago) DH and I made some really stupid financial decisions. We were actually getting back on track when I had to deal with an illness (that I didn't even post about here - this was like my refuge). I have pretty good insurance but still with being off work and medical bills things went downhill much quicker than we had anticipated. We have no savings left and we are behind on our house payment (we were able to make a payment this month). We had two credit cards that have now been sent to a collection agency. I got a call from one of this agency's representatives this morning. The amount due on the two cards is roughly $2300 - $1000 on one and $1200 on the other. The man said that if we didn't pay both in full immediately we were going to be facing a lawsuit. Ironically I was going to call the cc company today and make arrangements to pay the $1000 card in full and half of the $1200 paying the other half next month. This man said that the only way to forstall the lawsuit was to pay the full amount immediately. Well, we don't have the full amount immediately and we don't have family and friends we can borrow from. I asked what would happen if we paid one this month and paid the other next month. He said we would be sued for the amount of the card not paid this month. I understand all of this, I really do. I kept asking him "When would this lawsuit be filed?" and he wouldn't ever tell me. So I guess what I am asking is - does anyone have any advice? We will be able to pay the second card off next month. I have never dealt with a collection agency before. Also, how long does it take to get your credit out of the toilet? We do have a CD that is going to mature in the middle of June that will allow us to pay all of our bills and then I guess it will be like starting all over again.


I can't believe this has happened to us. We weren't even irresponsible with our money - we just made a bad investment and got involved in a bad family situation with DH's brother. I don't usually post personal things here but I didn't know who else to ask.

 

[JadenLayne]

Are these secured credit cards? I can't imagine they would really file a lawsuit over that little money. I am thinking scare tactics. Granted though I don't know much about credit situations but I just think its a collectors way of trying to scare you into paying. I think if you pay them both off by this time next month your fine. Hopefully someone with more knowledge can help. Good luck!!!!

Oh and hope your illness is much better!

 

[nick262]

I would still call the credit card companies to see what they say. They might still work with you. Good luck, I hope you continue to get better.

 

[hentob]

Call a lawyer. I believe that you are being harassed.

Set up a monthly payment plan. They will be happy that you are paying at all, as opposed to declaring bankruptcy.

This is just my opinion.

Anyone else

 

[binny]

ITA, sounds like they are just trying to scare you. Call the Credit card company back NOT The collection agency and work with them. If they know you are sincere they will help you. That is a really small amount (though I know it doesnt feel like it right now) to be worrying about a lawsuit.

Worst case scenario is to call Consumer Credit Counseling. There IS a way out of this and you will be ok

 

[mickeyboat]

Sounds like scare tactics to me, too. But it also sounds like you guys are in dire financial straits.

What would be the penalties for cashing in the CD early? I think if it were me, I might incur the penalties, and get that money to pay off the bills.

Denae

 

[chris1gill]

Growing up my mother had all sorts of these problems She was terrible with her credit cards... that's how she got into trouble! But anyhow, I agree this is a TOTAL SCARE TACTIC.... They would NOT file a lawsuit this month or even next to get the money... they don't have time for that sort of thing... Is there a supervisor you can speak to in order to set up an acceptable payment plan? Don't let them bully you like THIS... They will call all the time by the way, be ready for them & tell them you are putting them on notice... do not call any more or you will consider it harrassment... I think they can only legally call a few times, but I'm not sure on that one... Anyhow, I would work to pay the balances off, but don't let them give you a stroke in the meantime... that's just terrible...

And I'm really sorry about what's happened, I have big medical bill's, so I know how that can be, at least we expect ours

Oh, I meant to mention... you should look into the penalties of cashing in your CD sooner than the maturity date... it might not be too much & it might be worth cashing in the CD sooner...

 

[AllyandJack]

Don't let the collection agency scare you. I was one of those lawyers that they are using to threaten you. It is NOT the worst thing in the world. If they refer it to a lawyer, you'll just deal with the lawyer. You'll just workout the deal with the lawyer. Just make sure you answer letters and return calls. Don't try to hide because that will just make them suspicious and less likely to work with you. Tell them about your intentions to pay in the future. If they can't accept that, offer a payment plan until you can pay in full. If they can't accept that, they'll file a suit against you. I'm not sure about the small claims limits in your state, but if it's small claims, you'll probably just get a date to appear in court. If it's not small claims, you might have to file an answer of some sort. If you get served, call the court and ask what you have to do. They can usually walk you through filing the response and sometimes they'll have forms they can give you to fill out. If you have to appear in court, just show up and tell the judge you offered $X amount until you could pay in full on X date. 9 times out of 10, the judge will issue an order for your offer if it's deemed to be reasonable and that will be the end of that - just pay according to that order.

Obviously, I can't give legal advice, since I don't know your state, but the point is, don't be afraid of the collection agency. Stay calm and if they want to send your file to their lawyers, you'll deal with them. It's not a huge deal.

It might take a while to get your credit back on track, but it will happen. It can be fixed. My DH had terrible credit when I met him and now he's in the 800s.

I hate reading these posts because the collection agencies can be such bullies. If it makes you feel any better, they aren't any nicer to their lawyers. A lot of the time, the lawyers are better to deal with - at least, we were. We only got mean if someone lied to us or tried to hide. If someone was honest and worked with us, we'd do whatever we could to resolve the issue without court involvement and it usually worked out for everyone in the end.

Good luck.

 

[pearlieq]

This is just a dirty scare tactic used by collection agencies. They say this to try to pressure you into paying right then and there. If they call again, tell them you're working with the credit card company and that if they continue to harass you they will be reported.

Call your credit card companies. They will be more than happy to work with you. Make sure you keep all documentation and get a written confirmation on any agreements you make.

I'm so sorry you had to go through this. I had to deal with this some when DH and I first married and it's very scary and disheartening. It really does sound like there's light at the end of the tunnel for you, so just hang in there.

 

[scaredandconfused]

I called the cc company and they said the account had been sent to an "outside agency" and there was nothing they could do. But I've been doing some research and that doesn't seem to be true. What do you think would happen if I sent the full payment in with my usual statement for the one and did it for the other next month?

 

[Poohgirl]

I agree, I think its scare tactics. Try not to stress out too much, sounds like you will soon have things under control. As far as improving your credit goes, if it has already reached collections, it is most likely already on your credit. Paying it off will also show up as a slight positive but it will take several years before it falls off your credit report. Don't worry too much about it though, as long as other things look good on the report it won't do too much damage overall. I had a collection account hit my credit report once for a medical bill my insurance was too slow paying, they finally paid it, and it showed paid on my credit report but I was never able to get it off my report.

Best of luck to you, I hope it all works out.

 

[Sherri]

This is a scare tactic they are using. I have been through this with my best friend who got in over head with credit card debt. You DO have rights. Chances are they sold off the account and its the bill collectors calling. Google this: Fair Debt Collection act. Choose the goverment website and it shows all of your rights. Plain and simple, you can not be harrased or threatend. If you have any questions or need any help feel free to PM me or ask me more questions here. My best friend was a basket case over the calls she recieved. These are just tactics they use. You don't need to pay it in full, thats the first thing they try to get you to do by scaring you with the law suit stuff. Good luck.

 

[jonestavern]

first of all I agree wtih the OP, scare tactics. I wouldn't even talk to this person. there must be someone at the cc company to speak & deal with. Get every agreement in writing, by the by.
A good friend of mine was a collections agent (for a record short time ) & they were paid by how many accounts they could get payment on. You should have heard the stories she'd tell re: the tactics the employees would use. Of course, there are all kinds of agencies, reputable & not so ethical.


bump this thread in the pm when a lot more DISers will be home from work & will be able to give you in depth opinions on a course of action. Many DISers, as you know are accountants, financial planners or just plain savvy with finance.

Isn't Oprah always saying if most Americans experience serious illness or job loss we're only a few paydays from desperate financial problems? Please don't feel ashamed. An insane, unworkable medical system can wreak havoc upon the best laid plans

As for the family thing, you've learned the very tough way. I know from experience, it is trying to say 'no'. And sometimes you're d*mned if you do & d*mned if you don't. I don't know the circumstances or the temperaments of those involved, but this will give you an overwhelmingly great excuse to say 'no' in the future.

to you & yr DH

Jean

 

[Froggyswife]

I would go ahead and send in my payment .... but keep up with all reciepts. I agree that it is just a scare tactic on the part of the collection agency. I can't believe they refused payment. I don't know about in your state but in mine if a creditor refuses payment the debt is cleared.

 

[Kimberly]

Collection agencies use plenty of scare tactics to try and get you to pay them as soon as possible. I actually had one show up to my parent's door because I had accidentally overdrawn my checking account when I was 18, and the late fees amounted to over 750 dollars.

So now... I really don't think too highly of collection agencies, especially since I was able to pay them as soon as I found out, but they treat you like the scum of the Earth even when you are arranging to pay them.

Just pay off the bills as soon as you can, just pay the 1200 as soon as you can, and send half of the other. They won't complain, and they will not file a lawsuit if you pay them over time. If they file a lawsuit, in the end it will cost them more money than you just paying them over time. Some collection agencies usually "buy" debt from credit companies for several pennies on the dollar in an effort to make a profit, while others are a small part of the credit company themselves.

 

[LindaR]

I would NOT wait til the maturity date to use your CD. Lots of banks have a little known "loan" called a share loan (or something similar). That is actually a loan with your CD as collateral. The loan maturity date will be the CD maturity date (you pay the loan off with the CD). There are no actual monthly payments due except an interest payment (meaning: there's no principal AND interest.....just a small interest payment).

If you have the means to get out of this mess then you should not hesitate to do so. Send the full payments to the credit card companies. They will not refuse. This way, it will not show up as a collection on your credit report. It will show up as late payments instead.

BTW, I am a former banker (mortgage loan officer) and dealt with credit issues daily.

 

[MorganLeFey]

WHY DO PEOPLE ASK THE DIS FOR LEGAL ADVICE?

Collection agencies BUY the debt from the credit card companies. And they WILL sue if you don't pay. Even for a small amount. They hire counsel who will file literally hundreds of these actions.

know your rights:

http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm


telling a debtor that he or she will be sued is NOT in violation of the Act.

Pay what you can right now. Continue to call to see if you can work out a deal about what you can't pay. If they file suit, negotiate with their attorney to see how you can settle the law suit.

It takes about 3 years to repair bad credit. Good luck.

 

[mickeysgal]

Sounds like scare tactics to me, too. But it also sounds like you guys are in dire financial straits.

What would be the penalties for cashing in the CD early? I think if it were me, I might incur the penalties, and get that money to pay off the bills.

Denae

First,

Take a deep breath and read what the others are saying. These are scare tactics - they want to strong arm you into paying it in full. Then the collection agency and/or the collection himself can collect their finders fees. Of course, they're going to try to push you hard and to scare you!

I wouldn't cash in the CD early. Call the credit card company directly and try to talk to them nicely. Explain your illness. Hopefully, they'll work with you. You have nothing to lose by trying. Even IF and thats a big IF the collection agency moves to take action against you, by the time they do anything, it sounds like your CD will have matured by then and you'll have the cash available to pay it off. Send them what you can and do it in good faith. Believe me, the credit card company will accept your payment. They won't reject it.

Hope you're doing better with your illness.

 

[scaredandconfused]

Thank you for the replies. When DH got home from work we talked and we are going to send the full payment to the CC company for one of the cards and pay half the balance of the other. We can then pay the rest of the balance next month. Thanks for the links to teh gov website. I read up and now feel more confident about dealing with this situation. DH reminded me about that saying that if money can solve all your problems then things are pretty good. I know that's cheesy but it does help. I know there is a light at the end just sometimes the tunnel seems so long.

 

[Octoberbeauty]

There is a wealth of information here. You can find just about anything you need to know and form letters for dealing with companies, lawyers, etc. http://www.creditboards.com/forums/ Good luck.