Which creditors to pay first?

[sassiebaz]

Here are a list of my creditors....anyone have any knowledge as to which ones will work with you and which ones I should be paying first? Here is my list......
AMEX
Dell
Cap1
JCpenny(GEmoney)
Mervyns(GEmoney)
Walmart(GEmoney)
Sears
Payday loans
Credit union Visa
WAMU

I was also told that even the creditors that we have basically ignored, wont be able to start the collections process if we just send a payment...even if it's not the minimum. Is this true? She said it somehow starts the time over, and then they have to wait another 90 some days before they can send you out to an agency for collection.

Please, some advice...any!

[ready2puke]

Are you planning on filing BK? If so when?

[sassiebaz]

No, we already have a ch7 from 5 years ago. Although I am considering a CH13 my husband is dead set against it! We haven't been paying any of his creditors for the past few months. I was paying mine through a debt repayment program. But, I missed a payment when I lost my job. Now, we are trying to get back on track, and since my hubby said no to a CH13, our only option is to try and pay. I just sent payments in to most of his creditors.....This is gonna be a looooong road!

[sassiebaz]

Bigboy...although I know I dont need to, I feel the need to explain myself. Yes, I cannot excuse the use of credit, but for the last 4 years we were doing well. Maintaining all these accounts wasnt an issue....until my husband lost his mid-level management position. For a couple of months we survived, but then he couldnt find another comparable paying job. So, that's the reason we are now in this postion. I know there is no excuse, and although I felt like we were being responsible in paying, obvioulsy we got ahead of ourselves. We never had credit like this in the past....only one card on our BK. But, nontheless.....we are now in this awful position. I am hopeful we can pay this debt off

[treehugger1]

They will ALL eventually come at you; either creditors or CA's. There is NO WAY to know who will "work with you." In addition, you could wind up like me where creditors agree to work with you, but then another creditor/CA is not willing, moves toward suit, obtained judgment, and garnishes wages. Then, you cannot meet the commitments to others you have agreements with. Then, they default, sue, and eventually get a judgment.

I think it all comes down to this: If you can't/won't file a 13, then you need to look at what your lifestyle looks like with a 25% wage garnishment. You cannot even attempt to "save" your credit if you go the garnishment route. I have written several posts (including a post leading to a sticky,) tha discuss what you are willing to stomach when you default on unsecured debt contracts.

I'll give this a go:

AMEX 90 to never for suit
Dell: Who's the financial issuer of the card (Citi, etc.)
Cap1: Do not appear to sell debt, but assigns debt to CA's who can be ruthless, but honor DV's and cease and desist letters. On the other hand, they could order a CA to move toward suit quickly.
Sears: Might depend upon the finacial issuer of the card (Citi, etc.)
Payday Loans: Depends upon what state you live in. In some states, PDL's are on the run and will work with you. In others, they package the defaulted debt and probably sell it to national CA's.
Credit Unions: These folks can be local and very smart. If youa re under your state's small claims cap, I would assume they will come for you quickly.
WAMU: Hard to say. I defaulted on a "overdraft" checking account that I know they have no agreement with my signature. They sent me to several CA's who I DV'd and I have no idea where the account now resides.

My experience suggests that debt validation requests from CA's, continually speaking with local and original creditors can gain you some time, but eventually (within 90 - 180 days) someone will want the money you know you owe.

There is no free ride. TH

[sassiebaz]

No, I am not asking you to explain yourself, I am trying to get you to look at your own situation. When you have a spouse that says, I refuse to....(fill in the blank) when it comes to working on a solution to debt problems then I think well they must be OK with a wage garnishment then or (I hate this word) stupid or I should say uninformed.

Your not new to this, you filed a BK before, you know how debt works.

But again you said "I am hopeful we can pay this debt off" My question is if you can't now and your several payments behind, what do you have in your bag of tricks to keep the ship from sinking? Because based on your question its not really a plan its roulette. I understand what your attempting to do, but it really is not feasible based on what I have read so far.

You are right...it's not feasible now. But, I am working on him slowly but surely. Today he actually listened to me and I explained that a judgment may have far worse consequences than another BK. The truth is, we are uninformed about ch13. What does it really entail? How much of our debt will we most likely have to pay back? Someone told me they are having to pay 100% because of a previous BK...will it be the same for us? How does CH13 really work???

[treehugger1]

You might post your BK 13 questions over on the 13 threads. There are many of seasoned and experienced BK 13 folks on this forum who can offer some answers/experience on the Chapter 13 threads. Best to you.

[treehugger1]

You might post your BK 13 questions over on the 13 threads. There are many seasoned and experienced BK 13 folks on this forum who can offer some answers/experience on the Chapter 13 threads. Best to you.

[hnhlvr]

Well, since you cannot file ch. 7, then your best option would be to pick two cards with lower balances and keep paying on them and keeping them active. Default on the others and let those be charged off. You credit score will plummet, BUT, because you still have two active cards that you are paying on, you'll have peace of mind knowing that they will work to your advantage by showing a bit of stablity.

That is what I did in my 20s. Defaulted on all of them and kept my citicard, nordstrom, and macy's and and after some time went by began getting new approval notices in the mail.

How much do you owe on your Cap 1 card and what is the interest rate? FWIW, my DH lost his job and he quit paying all his cards and even after 6 late payments CAP1 hasn't increased his interest rate! They're doing all they can to be sure we possibly can make a payment.

Unlike Citibank who made my min. payment $9,000 (as in the entire amount I owe them).

[treehugger1]

I have defaulted on 10 CC's (All but two have now charged off) and keep three active. These along with my auto payments and student loan payments have led to a stable credit score (520 - 550) LOL. I have 3 judgments and three collection accounts. I would have thought my credit score to be far below 500. Then again, my credit score is what it is; the least of my concerns.

[treehugger1]

And, I would speculate that even having a job is not a guarantee of suit. States have varying laws related to wage garnishment. In some states, writs have to be renewed every 90 days (can be costly if no guarantee that you are first at the trough.) Assets are another matter, but if a judgment lasts for 10+ years, they may not act and choose to give things a year or two before pursuing action.

It is a crap shoot.

BB offers good comments. One issue that I can see is what can happen when you decide to attempt to work with or pay off one creditor and the other gets a suit and wage garnishment. This happened to me.

You could look at your bills, determine what your situation looks like after a 25% wage garnishment, and then make a decision. Eventually, you will need to address almost every creditor. By then, BK may be the best option and readily agreed upon by all parties.

[HHM]

You have bigger issues, you have a spouse in denial and no way to get out of debt...

Let's look at the crystal ball

1. Sending in less than the minimum in NO WAY delays collection efforts, you are throwing good money after bad.
2. After 6 months, all the cards will be charged off and assigned/sold to collection agencies.
3. You will get daily calls, some will sound very threatening, and letters.
4. Eventually a few will sue you...I imagine at this point either, your spouse will wake-up, or blame you and a divorce will occur.
5. If you are sued, eventually a judgment will be entered, if you own a home, a lien will be placed, and once they find out where you work, wages will be garnished.

Good luck with that. I sympathize that you have an uncooperative spouse, but it might be time to start doing things that are in YOUR best interests. You can file a BK separate from your spouse.