I have a few general questions..Sorry if this is long-winded, but I just want to give a bit of back story first..
As of today, I haven't paid any of my credit cards since January. I owed approx 180k (95% business debt), but it is probably more now with interest & penalties.
I have received one charge off letter, from Capital One, and one threat of lawsuit from Advanta (more on this in a bit).
Today, I received a certified letter from my local bank, with whom I had a 25k line of business credit. This letter is demanding 25k and change to be paid in full by next week, which is obviously never going to happen. The letter says they may take such steps as "commencement of legal action or enforcement of its right under any collateral documents, guarantees or mortgages.
As I said, this was a business line of credit, and I don't recall pledging any collateral, so I'm assuming that is just a standard blanket statement.
OK, so here's where I'm at - My business has been on the downturn the past 2 years. It still brings in money, but not enough to cover my debt payments, which ballooned to $4200 a month.
I am still operating..just not paying any bills. The reason I haven't filed yet, is I still believe there is a possibility to sell the business. I have spoken to a broker, and he feels we could probably get between 80 and 100k, contingent on some further analysis.
My plan was to try to pull this sale off, and maybe eventually settle with the collection agencies for maybe 25%, and be left with a little cushion to plot my next move. Obviously, paying anything to any of these creditors will only set me back to square one as far as reaching an eventual settlement.
I know it is a long shot, and a risk, but from my point of view, everyone - myself and my creditors - would make out MUCH better in the end. This is why I haven't just thrown in the towel and filed. I also had a bit of money in stocks that would have been fair game, so we sold them off and used the money to pay off our mortgage. We also have a small amount reserved to do some repairs, but our contractor is saying he can't start till August.
Of course, I know someone will foil my plan. The 25k line of credit, as I said, is with a local bank, so I always thought that they would be most likely to sue first, since they're right down the road. I haven't talked to them at all, and I'm not sure if they would even be open to talking settlement at this stage, since they are demanding payment in full.
Now on to Advanta - I know the deal with these guys, having been taken over by the FDIC and all, but I still get daily threatening calls from them too. I received a colorful letter from them about a month ago, and it was basically a threat to sue me, with a mock up of a court docket, showing me what it will be like.
I didn't notice at first, but as I was perusing the letter a second time, I noticed the balance was about half of what I owe them - I take a closer look, and here the letter has the name, address and balance owed of some lady a few towns over from me!! This could only mean that either she or someone else got MY letter! The outside was addressed to me, but the letter inside..someone else's entirely. I would think this violates some sort of privacy law? I'm holding on to that sucker!
I'm in PA, and thought we exceed the income limits and would otherwise have to do a 13, it was all business debt, so I would be doing a 7. I would be filing alone (I'm married), and would be using the state exemptions because of our house (tenancy by the entirety).
OK, so that's my story..now some general questions:
1. If I get sued by any of these folks, of course I know I can send a letter requesting proof or more info, which will probably buy me a few more weeks, but if I get called into court and don't go, I'll lose..which I'll do even if I do show up. What happens then? They have a lien on my property or something? The only thing I really own is my house. My car is like 15 years old and worth less that 1k blue book. Everything else we own is joint - furniture etc. I do own some musical equipment - nothing really valuable - that I use to earn an income on the weekends. I hate to think they'd take that and leave me without any way to earn. Since I'd be using the PA exemptions, I'd really have no way to protect that stuff.
2. If I do get sued and lose - would a BK filing after the fact wipe that out, or do I need to file before there is a judgment?
3. Since this involves only myself, and not my wife, can they seize our joint account if they found it? When we paid off our mortgage, we got a 2k check for escrow payments we had made that will be needed to pay off our taxes and insurance come July. I had her put that in her personal account, that I am not on. We do have our home repair money in our joint account, and have been wondering if we should just get that out of there ASAP.
Sorry for the ramble. I have been handling this pretty well (I think), after my initial shock, depression, suicidal thoughts etc...you know the drill! Getting this letter today just sorta shook me up a bit. Many thanks for any info or advice you can render.
As of today, I haven't paid any of my credit cards since January. I owed approx 180k (95% business debt), but it is probably more now with interest & penalties.
I have received one charge off letter, from Capital One, and one threat of lawsuit from Advanta (more on this in a bit).
Today, I received a certified letter from my local bank, with whom I had a 25k line of business credit. This letter is demanding 25k and change to be paid in full by next week, which is obviously never going to happen. The letter says they may take such steps as "commencement of legal action or enforcement of its right under any collateral documents, guarantees or mortgages.
As I said, this was a business line of credit, and I don't recall pledging any collateral, so I'm assuming that is just a standard blanket statement.
OK, so here's where I'm at - My business has been on the downturn the past 2 years. It still brings in money, but not enough to cover my debt payments, which ballooned to $4200 a month.
I am still operating..just not paying any bills. The reason I haven't filed yet, is I still believe there is a possibility to sell the business. I have spoken to a broker, and he feels we could probably get between 80 and 100k, contingent on some further analysis.
My plan was to try to pull this sale off, and maybe eventually settle with the collection agencies for maybe 25%, and be left with a little cushion to plot my next move. Obviously, paying anything to any of these creditors will only set me back to square one as far as reaching an eventual settlement.
I know it is a long shot, and a risk, but from my point of view, everyone - myself and my creditors - would make out MUCH better in the end. This is why I haven't just thrown in the towel and filed. I also had a bit of money in stocks that would have been fair game, so we sold them off and used the money to pay off our mortgage. We also have a small amount reserved to do some repairs, but our contractor is saying he can't start till August.
Of course, I know someone will foil my plan. The 25k line of credit, as I said, is with a local bank, so I always thought that they would be most likely to sue first, since they're right down the road. I haven't talked to them at all, and I'm not sure if they would even be open to talking settlement at this stage, since they are demanding payment in full.
Now on to Advanta - I know the deal with these guys, having been taken over by the FDIC and all, but I still get daily threatening calls from them too. I received a colorful letter from them about a month ago, and it was basically a threat to sue me, with a mock up of a court docket, showing me what it will be like.
I didn't notice at first, but as I was perusing the letter a second time, I noticed the balance was about half of what I owe them - I take a closer look, and here the letter has the name, address and balance owed of some lady a few towns over from me!! This could only mean that either she or someone else got MY letter! The outside was addressed to me, but the letter inside..someone else's entirely. I would think this violates some sort of privacy law? I'm holding on to that sucker!
I'm in PA, and thought we exceed the income limits and would otherwise have to do a 13, it was all business debt, so I would be doing a 7. I would be filing alone (I'm married), and would be using the state exemptions because of our house (tenancy by the entirety).
OK, so that's my story..now some general questions:
1. If I get sued by any of these folks, of course I know I can send a letter requesting proof or more info, which will probably buy me a few more weeks, but if I get called into court and don't go, I'll lose..which I'll do even if I do show up. What happens then? They have a lien on my property or something? The only thing I really own is my house. My car is like 15 years old and worth less that 1k blue book. Everything else we own is joint - furniture etc. I do own some musical equipment - nothing really valuable - that I use to earn an income on the weekends. I hate to think they'd take that and leave me without any way to earn. Since I'd be using the PA exemptions, I'd really have no way to protect that stuff.
2. If I do get sued and lose - would a BK filing after the fact wipe that out, or do I need to file before there is a judgment?
3. Since this involves only myself, and not my wife, can they seize our joint account if they found it? When we paid off our mortgage, we got a 2k check for escrow payments we had made that will be needed to pay off our taxes and insurance come July. I had her put that in her personal account, that I am not on. We do have our home repair money in our joint account, and have been wondering if we should just get that out of there ASAP.
Sorry for the ramble. I have been handling this pretty well (I think), after my initial shock, depression, suicidal thoughts etc...you know the drill! Getting this letter today just sorta shook me up a bit. Many thanks for any info or advice you can render.
Comment