advise please

[jragan]

I despartely need some advice. My 22 year old daughter is ina pickle. She has about $15000 in credit card debt. Most of this is one one card and was used for school books and living expenses while she was in school. She had a good job (bartending) and had it all under control for a while. She lost the job and tried to continue living on her own and getting that degree by using credit cards. She finally gave up and moved home about a year ago. She is out of school (without the degree lacks about 18 months) and works as a teller at a bank. We advised her to take this job because it is more respectable and will look good on resumes since she is trying to work her way up the ladder now and hopefully return to school later.
The problem is she missed ONE payment on a $6000 credit card and it was all over. The interest went to 30% and the payment wasn't as much as the interest. After calling them they told her they would lower the interest if she were current for 6 months. We tried that and after 4 months they doubled the payment. Couldn't do it. Now several months after all this started the balance is over $10000. It is unbelieveable to us. Such a shock. She let her other cards go trying to pay this one and now is current on nothing but her car.
Sadly to say, she is also under a doctors care and on antidepressants. We are so worried about her. She may have been young and foolish on part of this but, there really has been no help. One mistake and it is over. Credit car companies are liars when they say they will help. We have been offered nothing. Debt management plans have a $185 a month high payment than she makes. She makes about $1000 a month (clear) has a $330 car payment a $50 student loan payment and has a large gas bill because her job is in another city. With food and cell phone she is broke. She does nothing extra.
Any advice? Will chapter 7 work?
Thank you for being patient with my ramble
A worried mom

[bkfiler]

yep, you sound like all the rest of us here. dont worry.

first off i would suggest making appts with up to at least 5 attorneys, they are free and you will learn a great deal to start you off. al you do is run the numbers with them and they know what you should do.

also, keep in mind that living with you guys might get messy as far as the income, expenses are concerned.

she is going to have to get involved with the process the best she can to help herself. you can negotiate with the cc company directly just as good as they can if you are agreessive enough. thats the other option.

question is though how will the coursts deal with her living at home, and how should you plan your BK so that it works to the best case for her. research and think carefully on this last part.

kepp posting questions as they come up! welcome to our family!

[jragan]

me again

Thanks for the info. She is living with us because it is her only option right now. She would like to go back to school.
How can we help? We would pay this off but, we don't have the means. We are paycheck to paycheck. I recently quit my job because both my parents became very ill at the same time. (it never stops does it)
The largest credit card, the $10000 one told her today that they would take $8000 in 4 installments of $2000. Do they really think this is help?
worried mom

[Genenco]

Thanks for the info. She is living with us because it is her only option right now. She would like to go back to school.
How can we help? We would pay this off but, we don't have the means. We are paycheck to paycheck. I recently quit my job because both my parents became very ill at the same time. (it never stops does it)
The largest credit card, the $10000 one told her today that they would take $8000 in 4 installments of $2000. Do they really think this is help?
worried mom

I'd really suggest a nice friendly chat with a couple of BK lawyers..They can explain everything to her (And you) and suggest her best options...

Keep coming here!

[down @ out]

Seems to me you are getting a lot of good advice here and really the thing to do is look at all of the options and make the best choice you can.

First credit card companies are worse than a bunch of criminals. If you approach the issue from that perspective then why would you expect them to act in any other way. They have suckerd your daughter in and now like a dumped drug dealer want to keep sticking it to you forever.

Is bankruptcy the only option? You may want to look at the possibilty of simply doing nothing. Your daughter seems to be judgment proof and really the scum bag credit card companies are limited in what they can do particularly if she is not working. Determine what the statute of limitations is in your state and see if simply waiting the bums out is the way to go.

Anyway god bless and keep your family safe from those evil folks. Don`t ever believe you are dealing with decent human beings you are dealing with the filth of the earth.

Good luck

[jragan]

the shock of it all

This is so terrible. I want my daughter to learn self discipline. I want her to learn from her mistakes and be responsible for her actions. Some of the CC use didn't need to happen but, a lot of it was done with the right intentions. And yet.....
that hardly seems possible. I know she has and is suffering terribly and hopefully learning a lot about life. But... this isn't about some kid who really screwed up. The truth is that this kid worked hard her whole life. She got her first job a a JC Penney as soon as she turned 16. She went to college on a softball and academic scholarship. At the end of her first year at college (this was a school in our town, so she lived at home) she was viciously attacked at a friends house. She was hurt pretty bad by a spoiled rich boy. After the medical healing came the therapy and trying to get her life back on track. That is why she moved out. She moved to a neighboring town about 50 minutes away and went to school there to start over. We are in the category of people who don't make enough to pay for their kid's college and yet make to much to qualify for anything free. I hated her working in a bar but, it was a college bar. The only customers were college kids and retired vets from the VA home nearby. She liked these older guys and they were really good to her. I got a job in a nearby art gallery part time and helped her with clothes and groceries. Then the bar changed ownership and she lost the job. Before she could get another one, she was diagnosed with a bad heart valve (she collapsed at school one day and they called an ambulance to take her to the hospital). This turned out not to be serious but, until they were sure the doctor took her drivers license for 2 months. She tried really hard to keep it all up and depended on the credit card too much. After finally realizing that she would have to come home and start over, she sadly did so. We are so glad to have her back and yet she felt like she failed. And in this last year we have tried to get this under control. It has just snowballed. I don't understand it. If these companies gave you a chance at a very low rate to pay it off it looks like that would be better for them. Just close the account and don't let the customer use it until it is paid in full. At a very low rate. Then they would get some money rather than none and would not have to hire so many collection people. Which is another topic, how do these people stand these jobs? I feel bad for them because they must have it hard to have to take a job that requires lying. When the CC companies call and we mentioned that we were looking at debt management programs, they told us that wouldn't work. They won't agree to it and even if they do, it won't satisfy the debt. and that is just one of the lies.
Is there no hope against predatory lending?
Thanks for letting me vent
worried mom

[jragan]

another question

One of the reasons we are looking at BK is because we were told that CC companies aren't letting these debts ride like they used to. They are selling them to collection agencies who are taking legal action and garnishing wages.The debt management company I talked to could not guarantee us that they could help with CC debt that has already been sent to collection. They just gave us a "maybe". I was even advised to consider BK because it might be the only way to avoid being sued and garnished by these big companies. She has only one that has been sent to collection so far but, it is the big one.
Do you know if this stuff is true?
worried mom

[JimH]

It sounds like a ch 7 is the best solution. The only problem is the "means test" is all based on "median family income". Since she lives with you and other family members I am willing to bet the trustee will argue that the median family income would be the combination of all incomes. That would force her into a ch 13. Since she is an adult, I'm not sure this applies. If she paid you for housing, utils, and food, she may just be a 1-earner family renting off an "insider". That's not that complicated. You could (and should) talk to atty's about this but since this is only a few months in use, I'm not sure there will be a clear interpretation until some people try and file ch 7 under these conditions.

Another thought - Since the means test is based on the IRS's method of calculating tax deliquency payback, you may want to look at the IRS interpretation of this as that would be the most logical way the bk court would establish precedent.

Another thought - She could possibly rent a place of her own for a short while. Simple and foolproof ch 7. In the end, it may be cheaper than paying atty's to argue with the court about it. Would be way cheaper than ch 13 payments for the next 5 yrs.

[StaciMM]

Your daughter has to get involved-you can't fix everything for her, and even if you could, it would have more impact (for the good) if she went thru it all herself.

Beyond that, seeking an attorney's advice (several, as Bkfiler mentioned) is a good step. The student loans will not be discharged, but if she is eligible and files ch. 7 then her credit card debt will be.

[Kam]

Question.

I thought CC companies, OC's and CA's are not supposed to discuss debts with you that are not yours?

Mom, you are running too much interference for your daughter. I am speaking as a mother to a daughter who just turned 18 and has been working since she was 16. I will continue to help my daughter because she didn't stop being my child simply cuz she turned 18, *however* my role has become more of an advisor, instead of a fixer, you know what I mean?

[jragan]

me again

Does anyone know anything about "Fresh Start America"? I am reading some horror stories about some of these debt consolidation and negotiation companies. How do you find out who is reputable?

I am trying to find info for my daughter because she works long hours. Just trying to help. Write me back whenyour 18 year old is in a pickle and see if you can sleep nights with your advisor mentality. I will do what I can to help

[StaciMM]

Jragan-I'm sure you mean well to help your daughter. It won't help her though if you are the only one who learns something from this.

I would have to say to avoid debt settlement places. While making payments to them, the creditors get nothing while the settlement company waits for there to be enough $ in reserves to settle. In the meantime, the creditor may very well take action to file a judgement and then its too late to settle.

If the accounts are still with the original creditors, and she can handle a normal monthly payment but not the fees, etc. then a debt consolidation program may be good. (And if not, she will have had the consultation as required to file BK if that is ultimately her choice.) I believe Consumer Credit Counseling is one of the approved companies for the BK credit counseling. Look them up, probably there is a local office. When calling to make an appointment, confirm that they are approved for the BK required counseling, and ask for a BBB # to check them out. Your daughter will need to sit down with them (perhaps in person, perhaps over the phone) and give them info on her debts, expenses, and income. They'll be able to let her know what they could do if she were to choose to enroll.

[jragan]

me again

She has already done the CCCS counseling. The lowest payment they good give her was more than she could afford. She would have a car payment, telephone and the CCCS payment and the total is almost $200 more a month than she makes.
She has tried the 2nd job route and no luck yet. Partly because she works odd hours and the leftover doesn't coincide with what an employer wants especially at this time of year.
She tried selling the car. No luck. It is a nice car but, she owes on it what it is worth. On top of that, if your credit is shot and you sell your car that just adds to the problem. (02 Honda) We thought she would be better to at least keep the car since it has a high reliability factor and that could get her thru the next few years.
BK is only being considered because she just can't get alll the payments worked out.
I am not attending meetings or doing the actual calling for her. I am only gathering info on the internet. And doing a little venting which helps the ole nerves if you know what I mean
worried mom

[JimH]

I haven't heard one good thing about credit repair / debt consolidation companies. The whole concept is flawed.

I know you're probably getting sick of hearing it but...... I understand your daughter dreading the issue to the point of doing nothing about it. I did that for three years. I think almost all of us did. It is all part of the process. You should probably just let it all go and let nature take its course. Your daughter will get it resolved on her own when she is ready.

[Minnymouth]

My Two Cents,

The CC companies have a % (percentage) of bad debts written into their bylaws of each company..... THEY ALLOW FOR THIS..... part of daily business.

Where they make their money is off of high interest rates, penalties, etc.....

The only time they really "loose" is if you claim bankruptcy on them...... Otherwise, they get paid thru demand of payment, people struggling to pay high rates and penalties each month, or law suits and judgements.

The cc Companies are hoping you won't claim bankruptcy, then they get their money no matter what, one way or another.....

But if you do claim BK, the "loss" is already built into their daily planning budget....

DO NOT STRESS YOURSELF OUT over your daughter's credit card companies not getting paid..... Believe me, when I say they will NOT WORK WITH YOU...... They know they have your back against the wall... and with a little pressure they figure you will "pay up".....

From the sound of the situation she is in a position to file a Chapter 7 and cleanup everything but student loans.... and some of those are dischargable if they are bank loans..

If it will ease your mind, go with her for a evaluation with at least 3 attorneys. Find out what her options are since she lives in your home.

Also do not the let burden "fall on your shoulders".... Make her accept her responsibility and let it be a learning experience for her also...

As one member said, she too also needs to get on this forum and do some reading..... Will not only be educational for her, but will also relieve some of the stress she is experiencing... Bankruptcy is hard..... and even harder when you experience it alone... The support system here on the forum will help you both get thru this...

Minny