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Member
Ellen_C
Posts: 14
Registered: ‎04-06-2013

Stopping Payments

I hope to file for BK7 soon but haven't yet met with an attorney. I currently have 3 payment plans in place with Discover, Citi, and Chase (through a collection agency)- all credit card debt. The payments add up to approximately 45% of my monthly income. I've tried very hard over the last two years to meet my obligation to these banks by living as simply as possible and paying utilities every other month. Also, I will not be able to pay my property taxes for last year (final date 8/3 tax sale) if I continue to pay on these cards. In fact, I will still have to beg and borrow to come up with the total. I want to stop the automatic payments to these banks so I can use that money for property tax and to retain an attorney. I absolutely cannot get a loan because of the collection (Chase) on my credit report. Friends have paid my property taxes the last two years. I can't ask again- at least for the full amount. I think that by stopping the payments I will be able to have about half of the taxes.

 

Aside from the property tax issue I can no longer pay this amount of money toward these debts and the banks won't budge on the payment plans. At the end of the month I have nothing. I can't save anything- I can't even afford to buy shoes. My car is very old and needs regular repairs. So, I have made the decision to see an attorney about bankruptcy but I'm paralyzed with fear and severely emotionally stressed. 

 

Can someone give me advice about stopping credit card payments before a BK? Also, will it matter that these aren't regular payments, that they are a plan (accounts are closed). Will they take legal action sooner? Can you guess how long I would have before they file suit? I already have one lawsuit brought against me by a collection agency but it apparently has stalled since Sept. 2012 - listed as "Strike from call - allowed". 

 

Frequent Contributor
shols44
Posts: 397
Registered: ‎11-03-2012

Re: Stopping Payments

Few questions. How much is your total debt? What is your income and monthly expense? These are the basic questions to answer to see if it is worth filing BK and if you qulaify for Chap 7 BK. At first blush, it seems your bills outweigh your income and you could easily qulaify for Chap 7, but you need to talk to a lawyer. The first visit is free so just do it. 

 

Now, if you are going to file BK, stop paying your creditors. Just stop. You can save that money and use it to hire a BK attorney. Also, with every payment, you are extending the CRTP which means the baddies will take longer to drop of your reports. 

 

What your lender does after you file is completely irrelevant. It doesn't matter at that point. Just make your decision, take a deep breath and let the process play out. 


Starting Score: 501
Current Score: 706 EQ,TU 689,EX 686
Goal Score: 720

Frequent Contributor
Countingpennies
Posts: 464
Registered: ‎02-14-2013

Re: Stopping Payments

I agree, stop those CC/CA payments, save money for an attorney. Any good attorney will tell you to do that. Make a few free consultation appts. with some BK attorneys. Look for some that specialize in BK, not legal generalists. There is no obligation until you sign the retainer agreement. You can ask questions, ask about fees, payment plans, and ask about best way to handle your property taxes. They won't get too specific until you actually choose one, but make a list of questions you have now, and you can compare the responses, before choosing.

You have plenty of time before the CAs start taking legal steps. The calls will start immediately, so prepare yourself for that. Some attorneys will say just refer the calls to them, after you sign with one, of course.
Member
Ellen_C
Posts: 14
Registered: ‎04-06-2013

Re: Stopping Payments

Total debt is approximately 27K. This includes Citi, Discover, BoA, Amex and IRS (on payment plan).

 

Income 25K/yr. Three part time jobs, all low pay.

 

Monthly expenses (if I paid them all- and I don't) are 1000 not including CC/CA payments which total about 600. Amex is current and not on payment plan though it is maxed. Expense total does not include property taxes (1600/yr)- it is only utilities, food, gas, etc.

 

Yep, I qualify...

Member
Ellen_C
Posts: 14
Registered: ‎04-06-2013

Re: Stopping Payments

Countingpennies, thanks to you and Shols44 I straightened my spine and made the first call today and cancelled a payment plan. It was ridiculous. The conversations were reminiscent of conversations with collection agencies. The first person was very helpful, nice and understanding. She transferred me to her "supervisor" who was quite the opposite. Initially, I requested that my payment plan be adjusted, though my intention was to cancel any further payments. The supervisor flatly refused to make any changes to my plan. I told him that I wanted to pay but the payment they required was just way too high and I could no longer continue without an adjustment- more conversation- and still he refused to make a change. That's when I told him I would be quitting the program and would consult an attorney. It seems that the money isn't the most important thing. It's much more important that they get their own way. 

 

Thank you to both of you for giving me that shove in the right direction. I feel a bit better having taken the first little step forward.

 

 

 

 

Frequent Contributor
shols44
Posts: 397
Registered: ‎11-03-2012

Re: Stopping Payments

Just breathe easy. Glad you've made the first step. You will qualify easily. Consider this as a fresh start. Let us know how things go. Once you retain an attorney, it's smooth sailing from there.

Starting Score: 501
Current Score: 706 EQ,TU 689,EX 686
Goal Score: 720

Frequent Contributor
DrJim
Posts: 350
Registered: ‎10-26-2009

Re: Stopping Payments

How are you making these payments?  Are they a direct pull from your account?  If so, be careful.  I was working with someone who was on a payment plan, accidentally sent a check for $300 instead of $325 and the folks she was paying said she had defaulted.  They pulled $14K from her checking account that only had a few hundred dollars in it leaving a huge negative balance.  I know it doesn't sound possible, but I saw the account, and went to the bank with her.  She ended up getting a 5 year loan with Lendmark to make up the balance.

 

Be careful when dealing with these folks - they are brutal



Starting Score: TU 672 EQ 654 10/20/09
Current Score: TU 775 EQ 783 EX 795 Dec 2013
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Member
Ellen_C
Posts: 14
Registered: ‎04-06-2013

Re: Stopping Payments

Yes, the payments are automatic. Now I'm terrified...

Member
Ellen_C
Posts: 14
Registered: ‎04-06-2013

Re: Stopping Payments

My bank is going to stop payments for this CC on any amount over one cent. The stop lasts for six months and costs $37. I will have to do this every time I stop automatic payment for a plan. Fortunately, I only have three of these payment plans.

Member
Ellen_C
Posts: 14
Registered: ‎04-06-2013

Re: Stopping Payments

So, I stopped all of the payments in order to get together enough money to pay my property taxes- and I made it with a little help from friends. I made my first call to an attorney this afternoon only to hear him say that I can't file for chapter 7 because I don't have a mortgage on my condo. He said that I would have to file for a 13 and my payments would likely be around $500/mo- which I can't afford on $1200- 1300/mo. The condos in my building are probably only worth 40 to 45K- mine would be less because I have had no upgrades at all the windows are bad and the heat and A/C doesn't work.  I thought people didn't lose their homes in bankruptcy unless it involved a foreclosure. Here I am, 62, working low pay jobs 7 days a week, no money at all, debts around 30K, sole support of another adult, no health insurance and I can't even file for bankruptcy. But rich people can file for bankruptcy... Any suggestions?


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