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Serious Trouble with Credit Cards

7K views 61 replies 29 participants last post by  Ceashels 
#1 ·
Hi. I am dealing with $21,000 in credit card debt from 6 different accounts. It's joint debt but my husband is having me handle all our finances so it's basically my problem.
I've done a lot of great reading (Dave Ramsey, Debtor's Anonymous, Jerrold Mundis' books, and lots of library books on debt).
My recent job loss put us in a situation where we can't pay the minimum on our accounts. I've written letters to the 5 accounts we have $100 a month we can put toward it making it $20 a month each we can send -- just a token good faith payment really. The first call came today -- an automated one telling how much we needed to send. Of course I knew that and sent what I could afford (they already posted the payment).
Anyway, I have work -- just not enough -- cleaning on the weekends. My husband is completely retired SS and military. There is a large gap of 19 years (me younger) between us. He retired early and spends his week taking care of his super elderly father. I take care of everything for us and our home and cars.
The one true blessing is that we have enough money for the mortgage, car payment, insurance, food and needs -- just not for the unsecured credit card debt.
There is a long back story regarding my work history and my burn out and work I did to take care of his parents until they (last year) moved to a nursing home and daughter's home. I don't want to go into it in detail but it is part of the reason I have so much trouble working a traditional job -- I think. The five years of caregiving that almost killed me that is.
So, now I'm here and I'm just trying not to be scared out of my wits -- and trying to have hope that I'll be able to bring in enough money fast enough to avoid collection agencies and court rooms and bankruptcy. I don't believe bankruptcy would be a wise choice for us even though we pass the means test and could go that route -- we have a long history of re-curring credit card debting so it would be best to handle it any other way - I truly want to pay what we owe anyway.
This forum looks like a great place to recover so I am here and hope to figure things out and learn more and participate here.
I just want to know that I'm not alone and that there is a life after credit card debt.
I know that we overspent -- but I also can see that my underearning is a huge contributor. Regardless of the reasons or excuses it's a lot of why we are where we are. So I feel like crap. And I hope things change for the better quick.
Thanks for listening!
 
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#2 · (Edited)
i love jerrold mundis books. hard core debtors anonymous advice.

it sounds like all you need is income. a job. what do you do?
 
#3 ·
Does sound like you need to start making some money fast, even if its 2 part time jobs. Read the posts everywhere in here to help you spend the MINIMUM amount of money that you need to live. Question EVERY purchase. Buy groceries around sales; no eating out; call insurance companies to see if you can get a lower rate than what you are paying. Get rid of cable and cell phones; you can always get them back when you are out of cc debt. There are alot of little things you can do that add up to spending less. Do the no spend challenge; how many days can you make it in a month w/o spending. I admire the fact that you do want to pay the amount you owe back. Good luck!!!!
 
#5 ·
We have been in the black hole of credit cards. It took 7 yrs but it's all behind us.

Other then getting more work and increasing your income I don't see any way around it. If you can't pay it they will ring your phone regardless of any letter you send.

I wish you lots of luck.
 
#6 ·
I was in the black hole of credit cards also. Funding my farm business, I racked up over $30K on it. Now I have less than $7-8K and it is being attacked and will be gone SOON....cause most of the current farm income goes directly to that CC.

Do not panic about one thing. A credit card company CAN NOT take your home. They can not "make you pay". They can not push you into bankruptcy at all.

Go chat with a lawyer. Seriously. If you are scared, you must, must know your true options about credit card debt and only a lawyer can advise you correctly. It is cheap compared to "thinking" you have to pay and not make the mortgage and lose your home and all.

My friends wife got very ill. Went on disability and fighting a very bad disease. They racked up credit card debt while they tried to bare down their higher living to make his income only. Well in the process, the CC people harrassed and threatened and all that. It came down to pay the mortgage or CC or other bills.

He went to a lawyer. Lawyer said pay the mortgage and never lose your home. Next is pay the car so you have something to drive to work. BUT the lawyer said a CC company can not touch your personal belongings. Most they can do is take you to court and try to get some of their money back. They can't put a lien or anything on your personal items.

The court will decide at that point on how much you can pay and all that. But it never got to court with John. What he did was make token payments, put up with the harrassing calls for over 1 1/2 years and continued on paying the mortgage and car as required.

For him the end came when he got a big disability settlement 1 1/2 years later for his wife giving him a big sum of money. His first payments were all the CC cards. Paid off each one.

His only problem was "paying a token amt." and missing some payments incurring late charges etc....his credit went bad. BUT that didn't bother him one bit. He has his home and car already and knew even with bad credit, that he could eventually regain new good credit which he has done to this point now.


So just a fast story to say as much as it is horrible, we gotta pay those stupid CC cards at some point, but don't ever get too scared that they can take your home and such. They can not.

So maybe a $100 to a lawyer to see your true real options and how they can and can't "get to you" might be needed.

Hang in there, it can be paid off, I did it.....WOOF!
 
#7 ·
You can do this. I worked hard and paid off my credit card debt and made my final payment in april. We've been credit card free since april and its been great.


But your timing is good. We've been thinking about financing 4k of needed home renovations and just today I thought I would put the supplies on a credit card. But I don't want to be in that debt place again. See, you've already motivated and inspired me!
 
#8 ·
As others have said, it looks like the one thing that needs to happen is somehow bringing in more money. It's good that y'all have enough to cover the necessary expenses. Most importantly, do not put anything else on CC, live strictly on cash. Hang in there and good luck.
 
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#9 ·
You have come to the right forum for great financial advice. Everyone here is very supportive and most of us have been where you are at now. Just take everything one day at a time. I would definately agree with Dave Ramsey and say you MUST have Shelter, Food, Utilities, and transportation for work. I think you did the right thing by informing the CC companies that you are unable to make minimum payments right now. Hopefully they will all be able to work with you. Hang in there! Things will get better.
 
#11 ·
Could your husband get a part time job? I know you said he takes care of his father but maybe he could work nights and weekends? If you could get another job besides the cleaning you could use that extra money and snowball that debt. In the meantime I would only use cash, reduce utility bills ( unplug things, don't run dishwasher, etc) start making things ( laundry soap, body wash, etc) and maybe go through your things and see what you could sell online or at a garage sale. Good luck but I'm sure you can do this!
 
#12 ·
You need to ask to speak to the person in the hardship department at the credit card company. Years ago when I had a large cc debt I did that and it worked out so much better.

One other piece of advice is CUT UP the cc cards now and never use them again for anything, cut back on things you don't have to have, internet, cable, satellite...etc. You would be surprised how much that saves by doing those alone.

Good luck.
 
#13 ·
Karen1 said:
Do not panic about one thing. A credit card company CAN NOT take your home. They can not "make you pay". They can not push you into bankruptcy at all.
I do have a question about this..lets say you are just paying a small amount in good faith like the OP and the cc companies turns you into collections, can the late fee's and intrest still keep accumulating month by month or would that just be the amount you owed at the time it was turned over?

So lets say the late fee's and intrest keeps accumulating every month and the OP doesn't have the funds to pay the minimun(of course the debt wouldn't go into collections if one could pay that every month)Wouldn't that force one into bankruptcy because it would be so hard to catch up then? I mean say it's a years time before someone can start paying the debt back.

I hope that made sense. lol. It's just been something I have been curious about with credit card companies.
 
#19 ·
A credit card debt is an unsecured loan. Yes I "believe" they can include all late fees and charges on the final balance if they decide to sue you in court for a settlement ---(I am not 100% sure of this)

but it is not a lien on a home or anything.

CC companies will negiotiate a lesser settlement amt. ONLY if you are paying nothing at all...no payments. Only then do they know they may never see any of their money again. And if you are able to make a settlement amt. then you usually have to pay in full.

If I had $5K on a card, never made payments, went into default of the CC---then I could call them and say, hey I have $2,500 in cash I could scrape up and give you...or you get nothing and have to sue me for the balance in court. Most times they will take the lump sum...but that is just the company and what they decide to do at that time. They play hardball but in the end they want something usually without ever going to court. Court would look at all your finances and see what you could afford to pay...and they would stop the late charges etc. So the court would decide the balance due and your payments based on income.


BUT--always get a lawyer or someone on your side if you are having big trouble. Such a small cost to learn so much. So many of us have preconceived ideas of how to handle CC and such...and most times we are way off. Only a professional can tell you the legal truths.
 
#15 · (Edited)
First off :hug2: I so know those phone calls, we get them all day long, everyday, including holidays. But, even though we are far from being out of the woods we have gotten the car paid off and 1 credit card and we're closing in on a second one. Still have more to get paid off but we are gaining on it. We will eventually be all paid up and so will you. The first thing you've got to do is take stock. Even if you think you can not cut back any further you can.

-You can make your electric bill smaller by hanging your laundry, unplugging everything not in use, lowering the thermostat on your water heater, not running the AC, handwasing dishes and much more, just search through threads and you'll find all kinds of ways to lower your electric bill.

-Phone bill & internet can often be bundled for less $ a month or change each service package to a lower rate. That saved us a lot of money.

-The cost of heating your home can be drastically reduced by employing a few measures. Cover all windows in plastic and cover in heavy blankets. Amazing how much that helps. weather strip doors, use draft dodgers. Shut off vents to rooms not in use during the day. Keep thermostat at 60' or less and wear sweaters, and slippers socks. Keep a few nice throws in the living room to cuddle under while watching TV. Throw a few extra blankets on your bed and use flannel sheets.

-Check your car insurance policy and go for lower coverage and then start shopping around for a better deal for when insurance is up.

-Lowering your food bill is a great way to save money. If you buy prepackaged food, stop. Now's the time to cook from scratch. No more dinners out. Find a scratch and dent store. No brand loyality for now, got to go for what's on sale or least expensive. Coupons are your friend. Learn to cook and love beans a very inexpensive protein. Grow your own cooking herbs on your window sill.

-Lower your bill on HAB. No more $$$ bottles of shampoo, the dollar store has shampoo for $1. Maybe you've always used brand X for face cream, but brand X is $10 and Brand Y is $5, you got it brand Y is now your new brand. Forget expensive makeup Kmart carries the ELF brand where everythings a $1, it's good stuff with the exception of the mascara and I've never used the foundation. The dollar store has cough medicine, first aid cream, band-aids, epsom salts, shaving cream, razors, cough drops, tampons, tissues, cotton balls, q-tips, just about anything you need in that department. If your not a dollar store shopper now's the time to become one.

-Amazing how much cleaning supplies cost. Stop buying them and start making them. All kinds of recipes here the FV. Paper products like paper towels are $ eaters, start using rags to clean up spills. Paper napkins, use cloth or wash clothes. We use wash clothes.

-No more buying anything that is not a real need. No clothes, no shoes, nada.

-and now comes the hard stuff. If you have two cars getting rid of one of them is a huge money saver...OUCH, I know, it really hurt to give up my car. Do you really need a cell phone? Cable? Figure out what you can live without and get rid of it.

-If something breaks don't call a repair guy, fix it yourself. My husband has been doing this a lot and that alone has saved us a lot of money. Some things he knows nothing about and he looks it up online to figure it out.

-If you have anything worth selling, sell it. Okay, don't sell your Mother's pearl necklace that was given to her by your Dad on their 25th aniversary, but anything else that is worth something.

-and last....No New Debt...that sounds so simple, but it is not. We've had many and major reasons to incur new debt this last year but, we've held our ground and that will serve us in the long run, even though it sure hurts now.

You will get through this rough spot. Just keep hanging on and do your best to cut expenses and you'll find money you did not know you had.

Wishing you the best.
Polly
 
#16 ·
Hi. I am dealing with $21,000 in credit card debt from 6 different accounts. It's joint debt but my husband is having me handle all our finances so it's basically my problem.
This is not acceptable. You'll get all the help people can offer over here, but the help you really need is to get your husband on board and taking part actively.
Joint debt can never only be the problem of one person in a relationship.

You've got the goal, you've found some good people for help, now it's time to kick the debt where it hurts most. :)

Good luck!
 
#17 ·
Agreed. I'm sorry, I thought he was your HUSBAND, not your son. That means he's your PARTNER. You two have a mess, you two work on the mess together.
 
#18 ·
Thank You

It helps me ever so much to know I am not alone. I thank everyone for your replies.
Today I got very good news (from the company I was working for thru April) and they have someone who needs help one day a week -- so I now have an every Wednesday 4 hours job to go to. I added it up and even though it's minimum wage it will give us (after taxes) an additional $100 - $125 monthly depending on the months that have 4 or 5 Wednesdays. It's also a good way to not be forgotten -- with one foot (or one toe) still in the door. It's driving the clients car on her errands and activities just the one day per week. I already have the proper uniform, my paperwork is complete with this company except for a new updated W-4 and I couldn't be happier to be doing something which will yield a small paycheck at least.
I certainly don't feel as depressed with this addition to my workweek -- I am working Saturdays cleaning -- I do value the work no matter how relatively little the pay is -- it makes me feel better to be doing anything at any hourly pay than to feel helpless.
The calls (the please pay your bill calls) well they are daily -- but they are not being mean yet -- they are just acting as if we forgot even though I wrote the letters -- but of course I understand they have to do what they have to do.
_______________
It is hard for me that DH is not involved -- and yet I know we come from 2 very different "places". I don't like to argue or have confrontations. I have thought that I could just handle things. It has taken me a long time to work on cutting our grocery bill and unnecessary spending. We've made so many strides. His health is very poor at this point and I don't think he would go back to work -- if he did I would think 2 days might be all he could do. Right now he is going thru a medical problem and possible surgery. Mostly, I just am grateful for the income we have because of his past hard work and I am putting all my effort into making sure we spend less than we earn and that we save for emergencies. Starting almost from scratch here with Dave's baby step #1.
___________________
Again, I thank you all so much for your replies, sorry I didn't get back sooner, I really can tell I found the right place here to get my/our act together. Thank you so very much!
 
#21 · (Edited)
You cannot take a home, but you can secure a judgement and then put the lien against the home, collecting what is owed when the home is sold or refinanced. Having a business, and having had delinquent accounts, I KNOW this, at least here.Different for credit cards? Don't know. Check with an attorney. Also, you might read your credit card agreement and see if there is an arbitration clause in it. Many, if not most, will have one. Which means you will pay for the attorney in a legal dispute. You need income, in my opinion, therefore a job. Today.
 
#22 ·
at least they can't take the home, at least it is just a lien against if and when you sell or refinance then you have to owe up. But until then a lien is just a lien. I can live there and hold out longer than they can...HA HA HA

good info but yea, check with a lawyer at all times when truly needing this type of info. I sure would!!
 
#25 ·
Cut up all your cards and it isn't just your problem. It is you and your husband's problem together. I am sure he was charging on the cards just as much as you were. Good luck!
 
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#27 ·
A person from one of the credit card companies called Saturday and I talked with them. He was talking as if they might be able to do something (about the late fees and interest) if I will go to Consumer Credit Counseling Service. I didn't promise to but I did talk that over with my husband and he said he would go with me to see a counselor there.
I seriously doubt that our income will be enough to get on their debt management plan at this point and I have read enough of Dave Ramsey's materials to know that he doesn't recommend this.
The credit card company person was asking too many questions which even though I am not hiding anything -- I didn't want to answer over the phone but I did manage to remain polite and cooperative. We have sent them letters and sent what we promised to send but of course it is not enough $.
But this week I start with one day a week (a new client)-- finally at least working and the supervisor said they may have another client in another week or so. It won't be enough to "catch up" quickly but hopefully before any of these accounts go into collections -----between us (DH and me) will be able to bring enough $ in. I finally told my husband how I feel very scared, and depressed and low because of being the only one trying to solve the problem. (we both made bad choices and didn't save money so we ended up in the cc trap) I think he will at least help with the decision making and going to the CCCS might help get him involved even though I doubt we'd qualify for or choose their debt management plan. The man from the credit card company said he'd be checking back in mid week. Like to see if I went to counseling I think.
I'm seriously thinking that I am going to have a very hard time with the phone ringing a lot and getting into dialogues with these companies that I don't initiate may not be the best idea. But I am unsure about that. For now I will let the answering machine pick up. Until I get some professional advice from CCCS and/or an attorney.

*NOTE after preparing info for the counseling appointment I added carefully the most recent statements balances and it was not $21,000 it was just under $20,000 -- not a huge difference but.... I was estimating higher than it actually is.
 
#29 ·
DH and I went to CCCS together. But the payment they'd need to get on their debt reduction plan is more than what we were paying in minimum payments before my hours dropped. And it is $350 more than we have coming in right now not even including any type of emergency fund savings monthly.
After the appointment we sat down at the table together with a calculator -- that was a first. Something the counselor said scared him about the liens on the house and the freezing of accounts that creditors could do if it got that far and got to court etc.
So now he said he sees it as either find a way to pay the huge lump sum monthly to CCCS for about 3 and a half to 4 years -- or chapter 7. His take was the handling it ourselves was not going to do anything but cost more.
I'm still thinking about what she said, and wondering more about the actual laws etc. I didn't come out with more questions for them -- I now know the option they can offer -- and how much it will cost.
If I can increase my hours and keep them up there and keep on paying all I can toward the debt -- but as was pointed out to me what I am sending is not covering the late charges on 3 of the accounts.
I will see what DH says once he thinks more about it. He asked me to call and get the current cost of attorney and filing fee that is $2,099. A gigantic sum from where we are today.
Meanwhile, we're not setting foot in any stores and we're making do with what is on hand. I worked 2 days this week.
Probably the only comforting aspect is that now my husband is interested at least -- and it doesn't feel as much only on me.
 
#30 ·
After the appointment we sat down at the table together with a calculator -- that was a first.
YAY! :cheer4:

Something the counselor said scared him about the liens on the house and the freezing of accounts that creditors could do if it got that far and got to court etc.
First of all, the counselor isn't there to help you, he's there to sign you up, so he's going to tell you whatever will scare you enough to make you think you NEED them.

Liens are a REMOTE possibility, at least a YEAR away, and highly unlikely. What would have to happen for them to file liens is 1) they'd have to sue you, 2) they have to win (they would), 3) you'ld have to not make a good faith effort to pay the judgment, 4) then they'd go BACK to court and file for a lien, and 5) when you sold your house, they'd get repaid from the profit of the sale.

Same thing for garnishments, and the freezing accounts is BS. They're not the IRS.
So now he said he sees it as either find a way to pay the huge lump sum monthly to CCCS for about 3 and a half to 4 years -- or chapter 7. His take was the handling it ourselves was not going to do anything but cost more.
It's not an either or, and chap 7 is going to ruin your life cause you'll lose any house and cars you don't own free and clear. Chap 13 MAY be a necessity *IF* one of these companies actually sues you, but not before then.

How much it costs isn't the point - you have the debt, you owe the debt - so if you can pay the debt you have a moral obligation to do so. BUT if you CANT pay the debt, and you'll never be ABLE to pay the debt, then there are ways to settle this over time that will hurt your credit but end up costing you a lot less.

If I can increase my hours and keep them up there and keep on paying all I can toward the debt -- but as was pointed out to me what I am sending is not covering the late charges on 3 of the accounts.
More on this later...

I will see what DH says once he thinks more about it. He asked me to call and get the current cost of attorney and filing fee that is $2,099. A gigantic sum from where we are today.
You are not bankrupt. A bankruptcy attorney will tell you otherwise. Car dealers will tell you that you need a new car, too. Don't make it true.

Probably the only comforting aspect is that now my husband is interested at least -- and it doesn't feel as much only on me.
And that is awesome!

Now - for the later:
Would you and your husband be willing to give us a full financial picture? I think the two of you need an honest, UNBIASED review of your situation, and the people here on FV are not gonna pitch you to credit counseling, bankruptcy, or some other program that capitalizes on your misfortune (yes, bankruptcy lawyers DO GET PAID to do bankruptcies...)

If you would be willing, then please give us in painful detail the following:


  • Your monthly net income, total (ie; after taxes)
  • A list of your debts - balance, interest rate, and minimum payment on each - ALL debts - house, car, credit, the dog, whatever
  • Status of each debt - are you late, how late, etc.
  • Your expenses - how much do you spend each month on non debt expenses like food, shelter, clothing, cars, etc.
  • Your assets - what do you own that's worth anything - house, cars, etc. Let US take a look - I have a feeling your situation LOOKS a lot worse than it might actually be. But I might be wrong - we need real #'s to be sure
Might ask for more too - but that'll do for a start.

If you're willing to give us this, and seriously willing to *consider* any advice you get - some of it will be painful btw - then I promise you, nobody's gonna come down hard on you or tell you anything but the best we possibly can.
 
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#31 ·
Greenbo -- thank you for your reply.

In the past what has happened is DH and I could not agree on actions like get rid of the new car (& payments) or drop the gym so we did just little things to trim the spending but not enough.

I have been studying like crazy trying to figure out how much time we might have to increase our income before we might be looking at leins/freezes/court scary stuff. I can't seem to find out enough information except for about things like debt management, walking away, and bankruptcy -- but that middle ground that I wanted to be on where I do all I can to pay as much as I can each month on the accounts while trying to work our income up higher -- the do it yourself approach seemed doomed because one or the other of us wasn't willing to give up the new car or the gym or the cable (examples).
So, I imagine by sharing the numbers it will be painful. But standing between debt management (which we can't afford) and bankrupcty (which neither of us wants to do but we've got one creditor calling daily and tacking on hideous late fees/interest) I will post numbers here and see if there is something that I could see differently.
I have written letters stating my unemployment and pledging to pay the small amount I can to the creditors. It's just like an avalanche of late fees etc.
So, I will open another reply to put income and expenses but will list the accounts numbered. The regular household expenses I'll be as detailed (break things down where in some cases they are bundled).
And I thank you in advance for giving it a look.
 
#32 ·
If you prefer, we can do this privately via private message. I understand that putting this stuff out there can be scary.

You really really are months and months away from any kind of legal action, if they ever even pursue it. If your debt is pretty evenly distributed and it's all different banks, none of them are going to sue over an average of $3,500 owed to them. It's not cost effective.

If you owe one of them more than 10k, they may sue, but they'll be real goobs for a long time before then, and when they are, you just tell them, 'Look, I didn't intend to short you, but we can't repay you now. We want to repay you, and intend to, one day, but if you sue us, we will have no choice but to declare bankruptcy, and then you won't get anything, cause we've got nothing.'

They're going to do everything they can to SCARE you. Most of what they'll say to scare you is total bull.
 
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