Need Advice Handling Calls From OC

[ansett]

A month ago I stopped paying my CC debt. In 2006 Citi raised my rate from 9% to 32% for being one day late due to getting almost 7ft of snow in a time span of days 6 days in Colorado which caused a halt in the mail service for a week. The other CC companies followed Citi. They have sucked me dry of money and now I'm flat broke. I owe 230k now because of the high interest rates. My brother can give me about 50-60% of what I owe and I want to settle.

The calls are starting to come in, so how should I handle this? Should I start answering? If not how long should I wait? What should I tell them? Should I drop them hints that I'm broke, my savings and retirement is gone,have no home and a POS car worth maybe 1k? Also I cant work much because of my ongoing problem with West Nile?

I know they wont work with me until after being more than 60 days late but I would love some tips on how to handle the beginning of this process. All my debt is unsecured CC's and its the typical companies like BOA,Chase,Citi RBS,Discover and Wamu.

I could file chp7 BK but would rather settle. I know it would make things better for me but I hate not being able to pay my debt and want to pay back something. By the way, after figuring everything out, I have paid 100% of what I actually borrowed to each CC at least once over and what I owe now is interest .

[woeisme]

[QUOTE] By the way, after figuring everything out, I have paid 100% of what I actually borrowed to each CC at least once over and what I owe now is interest . [QUOTE]

Why is it again that you don't want to file CH 7?

If you have to borrow the money from your brother, and we're talking 115-138K (your 50-60% amount), why??? You are potentially ruining your brother's finances (since you say you can't work, how can you pay over 100K back to him?) for what reason, pride?

Especially since you know you've already paid back everything borrowed, now it's just jacked up interest and fees, I guess I just don't see why you want to negotiate with money that isn't even yours so that these creditors get paid even more than what you've borrowed???

I really wouldn't involve anyone else, especially a relative who obviously loves you, in your financial woes when CH 7 BK was designed specifically for people in your situation. People whose lives have been altered by medical or other problems are exactly who CH 7 should be for. Read the Bible, it has provisions for lenders forgiving debts, and usary is the sin of the credit companies, not you. Just my opinion.

Sorry, don't have any words of wisdom on how to negotiate with creditors, other than in your case, don't do it! :-)

[ansett]

[QUOTE=woeisme;143713][QUOTE] By the way, after figuring everything out, I have paid 100% of what I actually borrowed to each CC at least once over and what I owe now is interest .

Why is it again that you don't want to file CH 7?

If you have to borrow the money from your brother, and we're talking 115-138K (your 50-60% amount), why??? You are potentially ruining your brother's finances (since you say you can't work, how can you pay over 100K back to him?) for what reason, pride?

Especially since you know you've already paid back everything borrowed, now it's just jacked up interest and fees, I guess I just don't see why you want to negotiate with money that isn't even yours so that these creditors get paid even more than what you've borrowed???

I really wouldn't involve anyone else, especially a relative who obviously loves you, in your financial woes when CH 7 BK was designed specifically for people in your situation. People whose lives have been altered by medical or other problems are exactly who CH 7 should be for. Read the Bible, it has provisions for lenders forgiving debts, and usary is the sin of the credit companies, not you. Just my opinion.

Sorry, don't have any words of wisdom on how to negotiate with creditors, other than in your case, don't do it! :-)

He's not loaning me the money. When our mother died,my brother was a senior in high school. I quit college and paid for his education and living so he could get his degree and fullfill his dreams, which he is doing right now.. He wants to give me the money and I want to settle.

[danaf]

ansett - while it is noble, what you want to do is mind boggling to people on this forum. Because the thing is - you want to be 'nice' to predatory creditors who haven't been nice to you. And well - you are throwing away money - and apparantly alot of it. I understand this is 'what you want to do' but I would strongly urge you to reconsider. File bk7 and then take the money from your brother to do what you want - however it will benefit you. Paying off your creditors when you've already paid them off is just going to benefit them. And someday you will be wondering why you did it.

But since you want advice - the best I can say is go through this board. There are posts about people who have been offered deals.

Also - keep in mind that you will have to pay taxes on your settlement(s). Not sure exactly how that works but there are posts about that on here as well.

good luck.

[EveryDayAdam]

I agree with everyone else...have your brother give you what you need to pay your lawyer...or better yet, have your brother pay your lawyer. Then once the BK is over and done with, your brother can then give you the rest of the money.

The creditors will be out of your life, and you get to keep the money. Also, what Danaf has said is correct...if the creditors settle and forgive you of $100k of your debt, then you will owe the IRS taxes on that $100k...you'll end up owing the IRS about $15,000. Plus the IRS would consider the money from your brother income as well, so you'll end up paying taxes on that too...we're now up to $30,000 in just TAXES for doing what you want to do.

Also, if you're worried about protecting your credit: they aren't going to settle for 50% when you are only a month late. you'll have to wait until the debt has been charged off (6 months) and is at an outside collection agency before you start getting offers to settle. I was only getting settlement offers for 60-75% when I was a year late. It'll be a couple years before you get 50% offers, and by then (on this large amount of debt) you'll definitely have a judgement or two and the amount owed will only go up...probably close to double by the time you add interest, legal fees, court costs, etc.

By the time you get offers to settle for 50%, your credit is already ruined, and BK will actually HELP your credit. (my credit scores went UP by filing for BK). If you want to protect your credit, pay the minimums on those now to get caught up in payments...and file BK as fast as you can. When you file for BK it freezes your credit with those creditors. the BK will hit your credit, but you will recover VERY quickly because you'll still have "good" history with your individual creditors prior to your BK...more than likely, with those HUGE balances off your credit, your score will be right back where it is now in 2 years.

Just a couple of things to make sure you come out ahead: make sure your brother pays your BK attorney...don't let your brother give you any money, since it will be counted as income and can cost you. If your brother pays, then it's not income. Once the BK is filed, you're discharged, and case is closed, then your brother can give you all the money he was going to pay...and you can get back on your feet...which is EXACTLY what BK is designed to do...get you back on your feet when you fall on hard times.

If you are worried about not paying them back: Remember that you've ALREADY paid them back 100% of what you borrowed, and all you are paying now is interest...so they haven't lost anything...they just aren't going to profit from you.

[epiphany]

Ansett, I have to agree with the other posters.

I know that filing BK is a hard pill to swallow, but I really think you should consider the option rather than paying the creditors.

Also, if you settle just to make it all go away, you just might not learn the lesson you so desparately need.

My brother bailed me out of debt about 10 years ago, although it was nowhere near the amount that you are talking about. My credit was already trashed and there were settlements. I went through about 9 months of consumer credit counseling before he just offered to pay them off. I cried but I let him.

Point is, I did not learn my lesson that time. I am right back (and by MUCH MUCH more) where I shouldn't be. I have learned the lesson this time and I know that I am never, ever going to get myself into this situation again.

That being said, regardless of what you do, you need to worry about how you are going to support yourself in the future if you can't work and you're flat broke. You would be much better off filing the BK now and then taking some from you brother after so that you can sustain yourself.

It does sound like you are talking from pride here, nothing wrong with pride but you have to know when it doesn't serve you. And you are going to be no better off after paying the creditors than you are now if you can't afford the basic bills. Your creditors don't care about you. Time to stop caring about them.

Sorry if it feels like everyone is lecturing you. People just look out for each other here and everyone wants the very best for you.

EP

[Lindsay]

I agree. Forget about pride and just file a Chapter 7. If you don't have any assets to protect, it would be insane to settle with them when you could just file BK.

[TabulaRasa]

Yeah, go for the Chapter 7 and straight out ignore the callers. Don't worry, they use auto-dialers, so you won't be hurting anybody's feelings. And, yeah, have your brother help cover your attorney's fees. Or at least mine

[aachudneymiles]

[QUOTE=ansett;143718][QUOTE=woeisme;143713]

By the way, after figuring everything out, I have paid 100% of what I actually borrowed to each CC at least once over and what I owe now is interest .

He's not loaning me the money. When our mother died,my brother was a senior in high school. I quit college and paid for his education and living so he could get his degree and fullfill his dreams, which he is doing right now.. He wants to give me the money and I want to settle.

it sounds silly to settle 230k... your credit is going to be ruined anyways with trying to settle some place will not settle you have to wait until the account is sooo past due.. plus on your credit it will say you didnt paid in full ( unless you get them to put paid in full) if I didnt have a job and issue with west nile?!? I would hit them with bk before I even had a 30 day late..that way you can take one hit .. not many hits -oh yeah if you called me trying to settle 50k for 20 I would say on yeah she has money nope I dont want to settle- paid it in full and if you didnt I would send you an ITT