Negotiating a lower minimum and/or deferirng payments...

[assia]

I am currently faced with a rather large credit card debt ($40k+, accross about 5 cards - AXP, Providian, Neiman Marcus etc) and am unable to pay anything until I find work and generate income.

Being that it will take me a while (say 2-4 months) to find work and stabilize myself financially, I would like to know what my options are to defer and/or reduce the minimum monthly payments on my cards for at least 4 months.

Does anyone have experience with this? I heard that you can write letters to card companies explaining your difficult situation and negotiate something.

I need to know what these letters should look like, what I should send with them, and what I should expect out of this process. What happens after the 4 months are up? Do my payments increase, or remain the same? Do I get charged finance charges?

I am trying my best to avoid filing bankruptcy, so am considering alternatives for now.

Thank you for any help!

[aa06a47]

I am currently faced with a rather large credit card debt ($40k+, accross about 5 cards - AXP, Providian, Neiman Marcus etc) and am unable to pay anything until I find work and generate income.

Being that it will take me a while (say 2-4 months) to find work and stabilize myself financially, I would like to know what my options are to defer and/or reduce the minimum monthly payments on my cards for at least 4 months.

Does anyone have experience with this? I heard that you can write letters to card companies explaining your difficult situation and negotiate something.

I need to know what these letters should look like, what I should send with them, and what I should expect out of this process. What happens after the 4 months are up? Do my payments increase, or remain the same? Do I get charged finance charges?

I am trying my best to avoid filing bankruptcy, so am considering alternatives for now.

Thank you for any help!

Well, the only experiences I had trying to work with my creditors was....Thanks for calling today, after review of your account, we feel 30% interest is a very good rate, and we are glad to have you as a customer. Can we interest you in a home equity line of credit today.

One thing you can do is tell them you cannot make payments, you are saving to pay an attorney to file BK. They may work with you big time at that point. I didn't try it, but it did seem after they found out I was filing, they said we wish you would have worked with us, we have many programs to help our customers prevent filing BK.

[GoingDown]

I'm afraid that's true. /\


Creditors don't seem to be willing to make any deals with anyone, and they don't even seem to care about the threat of filing bankruptcy either, because they realize that the new laws force most people into a Chapter 13, which is great for creditors.

If it's only going to be 4 months of missed and payments and then you can start catching up on all the payments, plus late fees, finance charges at about 30% interest, over the limit fees, etc., then you should do fine, but to be honest, that doesn't sound very realistic for your situation.

Here's an example of what happened to one of my friends...

She had a 2005 Mercury and she was making payments on it each month until she got into a huge car wreck. The car was no longer driveable and she had allowed the insurance to lapse. Big mistake! She couldn't afford to get it repaired, and due to some minor injuries and her inability to drive back and forth to work anymore, she got fired from her job. She couldn't afford to make her monthly car payment any longer. So, she called the lender and told them the whole story and said that she was looking for a new job and that in the meantime she would try to refinance her house and get a new mortgage to pay off the car. The bank said they would work with her, no problem, they said. After missing two payments, she got a loud knock on her door, and it was the repo man asking her to open her gate because he was there to get the vehicle. The repo man got back there and pushed some reset button back in the trunk of the vehicle and was able to get it running again and then drove it out on the street where he loaded it up onto his tow truck and drove away with it. Then she got a letter in the mail demanding payment in full less a $1300 deduction for what they were able to get for the car at auction. They added interest charges, late fees, and repo and auction fees to the total amount.

So, the moral of the story is, don't count on being able to make a deal with creditors. They have no honor.

[SinkingFast]

Back when we realized we just could not carry it all any more, we started asking for help from our Mortgage Lender and our Creditors.

No luck. They wouldn't budge on payments. Wanted all their money every month. Asked all kinds of financial information questions. Made entries in their computers that I'd called and chatted with them. Thanks. and Have a Nice Day!

Now that they haven't been paid for 5 months, all of the sudden we're getting the, "Call us so we can help. We'll work something out for you that fits your budget." letters.

More than a day late, and few grand short in late fees, penalties, and interest surcharges.

[Fedler]

Creditors have honor. They honored their part of the agreement. It said if you don't pay, you don't get to keep the car. You didn't pay, you didn't get to keep the car.

You promised to pay and didn't. Who's the one without honor?

SinkingFast, the reason they're willing to work with you now is because they know you're not lying. Anyone can call the bank and say, "I'm having a hard time." You expect them to take that at faith? You kept paying, didn't you?

[SinkingFast]

Creditors have honor. They honored their part of the agreement. It said if you don't pay, you don't get to keep the car. You didn't pay, you didn't get to keep the car.

You promised to pay and didn't. Who's the one without honor?

SinkingFast, the reason they're willing to work with you now is because they know you're not lying. Anyone can call the bank and say, "I'm having a hard time." You expect them to take that at faith? You kept paying, didn't you?

Nope.

When we realized we couldn't pay we called and asked for them to work with us until we could afford to pay the minimums in full. The CC companies wouldn't budge.

And I don't have a car. We kept the payments current until we had to sell it to pay income taxes for 2005.

[GoingDown]

Creditors have honor. They honored their part of the agreement. It said if you don't pay, you don't get to keep the car. You didn't pay, you didn't get to keep the car.

You promised to pay and didn't. Who's the one without honor?

SinkingFast, the reason they're willing to work with you now is because they know you're not lying. Anyone can call the bank and say, "I'm having a hard time." You expect them to take that at faith? You kept paying, didn't you?

Fedler, do you work for a credit card company or are you a collection agent, perhaps?

[GoingDown]

Back when we realized we just could not carry it all any more, we started asking for help from our Mortgage Lender and our Creditors.

No luck. They wouldn't budge on payments. Wanted all their money every month. Asked all kinds of financial information questions. Made entries in their computers that I'd called and chatted with them. Thanks. and Have a Nice Day!

Now that they haven't been paid for 5 months, all of the sudden we're getting the, "Call us so we can help. We'll work something out for you that fits your budget." letters.

More than a day late, and few grand short in late fees, penalties, and interest surcharges.

I've been getting some similar letters, but they turn out to be settlement offers. They are down to knocking $2000 off of my debt, if I pay the rest in one lump sum. If I could do something like that, I wouldn't be in this mess in the first place.

If they offered to knock $9000 off of my debt, then I would go for it.

[aa06a47]

Creditors have honor. They honored their part of the agreement. It said if you don't pay, you don't get to keep the car. You didn't pay, you didn't get to keep the car.

You promised to pay and didn't. Who's the one without honor?

SinkingFast, the reason they're willing to work with you now is because they know you're not lying. Anyone can call the bank and say, "I'm having a hard time." You expect them to take that at faith? You kept paying, didn't you?

Probably "Honor" is a bad term to use. Perhaps sympothy would be a better word. I go back and forth on weather a cc company should work with someone or not. Fedler is correct in that why give a break to someone who is just calling saying they are in trouble. Hell, everybody would be on zero% interest, not making there payments and have 850 credit scores.

As one of those who made an attempt to avoid bankrutpcy by asking for a little help from the creditors, I am disappointed with what I got. What I got was interest rates raised to 30%, credit limits lowered so when they tacked on the next interest payments, they got to charge me over limit fees.

So be it. I am better off in BK than credit card payments that would follow me into the grave, whether I worked 1 more day or 100 more years. There form of "understanding" set me free!!!!

[jzak423]

There form of "understanding" set me free!!!!

Wow, that is exactly what led me to my next step.... filing next week. I had a talk with good ol' chase bank and the advisor on the phone practically told me to file (not in so many words). He was pissed he couldn't help me with my 29.99% interest considering i've never missed a payment and had only been late once in 8 years. He was actually very concerned with my situation and gave me some numbers of some credit card consoling services.... which seem to be no help. Oh well, time to call a BK lawyer.

Anyone have a good one to use in the Milwaukee, WI area?

[Fedler]

No, I don't work for a credit card company or a collection agency. I'm just a regular working stiff like most of you. I pointed out where you're wrong. Not everyone who points out an error in thinking works for what you think is the enemy.