worst case scenario?

[brokeone]

Good morning everyone,
I worried about this minimum payment increase all night.Now I find myself asking,what is the worst thing that the credit card companies can do to me for not paying them when the increase goes into effect since I can't possibly pay double what I'm paying now?If I continue to pay my mortgage and other bills on time as I have for years I'm doing the best that I can,and all I can.
I realize that my credit will be trashed,collections will be initiated,and judgements will be sought,but other than those actions,what else can the credit card company do?I'm starting to ask myself,"why file BK just because of credit card debt?" When you find some time would you please give me your thoughts regarding my questions.Thanks in advance to all who help me out.
brokeone

[freshstarter]

We did it for a few years...stopped paying on credit cards, closed them all and cut them all up. Once we stopped paying them, we no longer needed the credit for anything anyways. Your other bills are more important. We got debit cards and they keep us out of trouble.

(we did attemp cc counseling, but they determined we didn't have enough $ to make any payments)

Phone calls every day - we sent notices so they'd stop and most did stop.
After a few years the judgments started so we filed bk. Since we were gonna end up in court anyway if we didn't do anything, might as well be on our terms. No more phone calls or mail and we'll soon have closure and a fresh start.

[HHM]

First off, do you know for a fact that "your" credit cards will be doubling the minimum payment requirement?

Second, how much total credit card debt are we talking about?

I suppose you could get by with trashed credit and collections, but judgments are another issue...once a judgment is taken against you, the judgment creditor can lien your house (possibly force foreclosure), garnish your wages, etc. Also, if you let it go that far, bankruptcy may not be able to help you that much...once a creditor "perfects" their lien on your property, you may not be able to "simply" discharge it in a future bankruptcy.

Frankly, recognizing a problem and then doing nothing is not really a good option; you owe these creditors money...simply not paying them and hope it all works out is not a good option...one way or the other, you will need to deal with it...if you deal with it now, before you get into significant problems and serious default, you have the MOST options for dealing with it, if you ignore, bury your head in the sand, as your situation deteriorates, you options become less. Better to deal with a recognized problem now, while you have the most options available to you, then wait until you one or no options.

[Genenco]

Well, if you've bene paying nicely for so long, you might have equity enough to get a loan to cover them. However, here's what I see.

When those charges double, you cannot pay, what could happen?

Garnishment (Depending on your location) which could total 25% of your income. (I am not sure if this is per CC or total, but you never know!)

Termination...No I am not kidding, been seeing companies who DEMAND a good or fair CR for employment and if you don't have it, don't bother applying. (Usually the jobs are ones with cash handling)

Loss of home, all that you invested in the home, gone. Rent is not cheap, especially if you have children and animals...

Now that you're sitting there, a nervous wreck, I also would say that the CC companies might say "Interest will double, either you can close the account and the amounts you have been paying stay, or use the card and you pay the new amount"

In closing, I have heard that in the past 90 days, if you have used your CC's for "Basics" (Food, electricty and such) you may be in trouble, see a lawyer.

[HHM]

Genenco raises another point I forgot to mention...when you start defaulting, your interest rates on these cards will skyrocket, what is a $5,000 debt today, could easily be a $10,000 to $12,000 debt a year from now on interest and fees alone.

[brokeone]

freshstarter,HHM,& Genenco,
Thank you for your quick responses and frankness.To answer some of your questions here goes.I am a married retired Marine who also draws social security.I have credit card debt in excess of $50,000 dollars (multiple cards).I talked to bank of america/fleet,and was told my minimums will be doubling .I don't know what to do or where to start.I added a garage onto the house,helped the kids pay bills,did a lot of things that used up the credit available.I was content to pay the minimum for the next 30 years.I have already taken a line of credit so in fact I'm paying two mortgages.I had hoped to keep the line of credit and mortgage paid with my military retirement and social security.I don't know how to escape defaulting because I simply don't have the mony to pay double what I'm paying now.Again,i don't have any idea as to how to start dealing with this major problem.I don't wan't to default,lose my home,or have judgements against me.I don't think I'm burying my head in the sand.I am scared and afraid for my family.I know I screwed up,and hope you guys/girls won't beat up on me too badly.Did I put myself in this predicament?Yes.How can I get out of this predicament?I don't have the slightest idea.I see myself sitting on the street.Regardless of whether I pay late or can't pay the entire minimum amount due I'm going to be in default.Again,I have never missed a payment,or incurred a late fee.I had good credit,was offered more and more,fell into the trap,and don't know how to get free.The bottom line is that I wanted more than I could afford and apparently I'm going to lose everything.When you find the time please tell me where to start.Thanks in advance .
brokeone

[HHM]

I think you are a prime candidate for a chapter 7 bankruptcy (since you have 2 mortgages, I am betting any home equity is exempt).

It probably would have been better had you filed under the current law, but given that the filing deadline is next Friday, I doubt you can pull it together that quick (if you file pro se, you might be able to do it, but I doubt there are many attorney's available that can pull it together that quick for you).

Sounds like most of your income would be exempt anyway, so you don't really need to worry about garnishment of your wages from a judgment (but they could still hit your bank account).

Odds are, you probably still qualify for chapter 7 under the new law. Thus, I would suggest filing BK and just be done with it. Why through good money after bad if you don't have any hope of paying this debt off in the first place.

[brokeone]

Hello again everyone,
My life has returned to normal for the time being.I called two credit card companies again,talked to two different people,and was told the initial information I got was not correct.I was told there is a formula they are using that may raise my payment a little ,but it won't be doubled.Thinking about what Genenco said,I asked about closing out my account & retaining my current payment plan until I can get the money & pay off everything.I was told there is an opt out option,and I will be getting that info.with my next statement.Since I've rec'd.two different stories from two different people,I'm now going to wait for my statements,try to relax a little,and then panic again if the news is bad.Thank you all for helping me.I'll let you know what the informational statements say when I get them.
brokeone

[brokeone]

Hello HHM,
I just saw your latest post.It must have come up while I was "hunting & pecking".Thank you very much for all of the help you have offered me.I.know I can't keep paying this much money out to the credit card companies forever so the wife & I are talking about selling & downsizing.If we sell we can pay off most of the debt.I hope I have finally learned to get rid of my credit cards.I'll keep you posted.Thanks again.
brokeone