Will paying small amts to CC keep them at bay?

[peacesoon]

for a little while. I need to save up for BK? I just don't know how long they will go without suing us...

We have approx 80k spread over 6 cards.
ETA: This will be our first month late or with missing a payment.

[fireworks]

It's really tough to say how long - depends on which cards, how much, what state etc. Some cards will sue within a few months for a small amount if they can get it into local small claims court instead of regular civil court (the limit is usually $5000 for small claims). Others will wait a bit longer, some won't ever sue. I think the general consensus is you have 6 months at least.

Regardless, if you're sued and they win a judgment against you (which they most likely will), the judgment is negated when you file bankruptcy. Considering the speed at which most courts move you'll probably be filed before they get that far anyway.

It's now been 4+ months since I paid any CC bills. Some of mine are small enough for small claims court of Chase or Amex wants to go that route, and a BOA or USAA might think the amount is big enough to warrant a regular civil suit. They've all been told that we're filing soon (in the next few months, I hope). Hopefully they won't waste the time and money on it.

[peacesoon]

I have some small enough for Small claims too. Our biggest ones are probably enough for a civil suit. UGH! I am in SC(not sure if that makes a difference) - I know they can't wage garnish here. Not sure if that makes a difference.

[Brighterdays]

Through my research and talking with my lawyer, I have found two good stall tactics. First, DV (debt verification letter) can buy you anywhere from 1 to 4 months(sometimes longer), Second, you can apply for a hardship with your CC company. Just tell them you plan to pay them back but need time to find a job. Discover seems to bring the lawsuits the quickest. I wouldn't throw your money away on any payments. Make sure to keep very little money in your bank as the CC could get judgments or if you have a cc with your bank they will yank any funds out.

Being bullet proof from wage garnishment is great. A suit takes awhile so you should be ok until you file.

[treehugger1]

Based on my nearly 3 years as a member of this forum, there is anecdotal evidence that Chase and AMEX can move quickly toward suit. I think the probability for any individual case to go to suit within 180 (prior to charge-off) days is small across the country. However, there are so many different state laws regulating small claims courts, you really need to to do your own due diligence and try to learn your state laws. Some states do not allow attorney's into small claims and a representative from the original creditor or CA must be present. Such is the case in my state of Oregon. If you live in one of the most remote areas of the state, as I do, then the OC or CA must pay to travel to my district and the travel costs are not generally awarded to the plaintiff who may prevail with judgment or default judgment. On the other hand, if you live in a more metropolitan area of my state, where CA's sue in small claims, you might expect to see the small claims or circuit court process taken on the by the OC or CA.

In Oregon, small claims amounts are capped at $7500, so be careful and do not assume that there is a universal small claims cap. It varies BY STATE! Some states are now up to $10000 for small claims. Some states have intermediate courts between their small claims and full-on civil circuit courts.

While you don't need to pay the original creditor anything, you might find it helpful to continue communicating with the OC. Your phone will begin to ring off the hook with creditors and eventually collection agencies/attornies attempting to call. If the call is from a collection agency or collection attorney I do believe it helps to answer the call and request they send you written information related to the alleged debt they are trying to collect. Don't admit anything other than your correct address and specifically state you do not discuss your finances over the phone. Ask that they send you information within five days. Once you receive the written correspondence, send a simple letter back stating that you are denying the debt and under the FDCPA you are requesting validation fo the debt. In most states, DV is only allowed for 3rd party debt collectors. In a few states, the laws also apply to original creditors (Anyone contacting you in regards to a debt is considered a debt-collector in my state, and they must follow state laws that mimic the FDCPA.)

I believe that continuing to speak with the original creditor does not hurt you. Should the debts be assigned to a collection agencies, then you should make it clear that you want information in writing related to the alleged debt. Other than that, don't speak any further with the collection agency. In my experience, a DV sent to the collection agency definitely stalls things. In many cases, the CA sends the account back to the OC, or simply attempts to pass the debt onto a sub-contractor.

Here is my non-legal thoughts of things.

1) If you are not in close proximity to the collection agency or creditor, then it might take a long time for someone to sue you.
2) If you live in a metropolitan area where the CA or creditor maintains legal counsel, then the chance of them moving to suit increases.
3) A DV never hurts you, in my opinion. Keep the DV simple. "I deny that I owe anyone $#####. In accordance with the Fair Debt Collections Practices Act, please provide me with validation of this alleged debt."

I also always include a cease and desist statement, "You are to cease all telephone communications with me. This includes attempts to contact my personal phone, my employment phone, and any other parties. I can be reached via USPS mail at <address.> For accurate records on your part, please send all written correspondence via certified, return receipt."

Does this stop potential lawsuits? Probably not, but all future attempts at collecting the debt must cease until they have supplied you with some form of validation of the debt.

Again, the above only applies to 3rd party collectors in most states. In other states, there are laws that also apply to the original creditor.

There are some who say that you should never agree to anything (new terms, payments, etc.) I have no idea why folks would say this. You always have the option to declare a BK and making a "new promise" doesn't seem any different than making the "promise to pay" when you set up the account. Whether or not a "promise" resets a statute of limitations is not relevant if you will eventually file for BK.

I'm not an attorney, but I do have some very real experience (as do others on this forum.) My experience is not legal advice. It is only intended to share my own personal opinions.

Bottom line is that you can potentially stall for a very long time! But, keep in mind that the new financial instability across the country may lead to new experiences for debtors recently defaulting on unsecured debts.

[peacesoon]

Thank you so much for your help! I have much research to do to figure this all out!

[catleg]

TH and BB know what they're talking about.

I would just add that paying less than the minimum is absolutely just pissing your money away. You'll still get the phone calls, you'll still get charged the ridiculous interest and fees. Worst of all, I think it actually encourages them to try and collect because they see some capacity and willingness to pay, whereas the image you want to project is, as BB says somewhere else, of trying to get blood from a stone.

[peacesoon]

Thanks!! What a wealth of info. We have our first BK consult next week but I do not want to file until fall when income drops off so I hope that we will have time. I hope we can keep them stalled for a good 4 months or so. We live close to Columbia, SC - not exactly a metropolitan area but still a city. No wage garnishment here but DH's work only does direct deposit so I worry about bank accounts.

Our cards are the following:
Bulk of our debt with
2 Citibank cards
2 Chase cards
---
1 Nordstrom Store
1 Gap
1 Kohls

Myriad of other bills including medical, legal, some old utility bills from our house that we lost last year.

[treehugger1]

Well, if you ever used your bank account to make payments on your unsecured debts, you should change banks. Folks believe there is some mystical database out there that immediately gives creditors and CA's access to wherever you bank. This is BS. Especially if you open a direct deposit account with one of the new prepaid debit cards on the market and they don't pull your credit report. You would have to be served, have a default judgment, and be forced into a debtor exam to give up such accounts. This doesn't happen overnight, if at all.



Don't be married to your current bank! Especially if you used the account to pay on unsecured debts in the past. Should one of the unsecured accounts get a judgment against you in the future and they know your bank account info, they will probably move to garnish/levy the account. Since you know you need several months, you can be a bit proactive.

You will soon get many calls. They will want to "fix" something today. You simply tell them you have no checking account available. And, whatever they are trying to offer, tell them to send it via USPS mail. Other than potentially verify who you are, don't discuss any personal financial info over the phone, unless you truly believe you can keep up your end of the bargain. And, even i fyou can't keep up your end of the bargain, there is little they can do but push you back to collections.

Take care of yourselves first. Don't worry about your credit. This will get sorted out in the future after you eventually file. In the meantime, read the sticky's and research soem of the posts related to debt collection.