Being sued by Cap1...

[Anonymous]

Hi, I just got served with a summons from Cap1 today and am confused with what I should do...

Before I get to my questions, these are some of the details that I feel might be pertinent to my case -- I'm basically a full-time student with no income in CA, and just about $75 in my bank account and a partially paid-off car to my name. With my academic course of study I really cannot afford to take on a part-time job, so I scrape by with the help of my relatives. This summons is for a  (now) $7000 credit card bill that went delinquent about two years ago (and so is not out of the SOL yet). On top of this, I also have several other slightly smaller delinquent credit card bills, probably totaling about $18k or so, but I have not been sued by them (yet?). I have consulted with some people who claim they understand my situation and have advised me in one way or another, but I still have the following questions I am hoping that somebody here can help me with --

• Should I file for chapter 7 bankruptcy (BK)? I've been told that doing so would 'wipe' out all my debts and let me have a 'fresh start'. I know that it leaves a black mark on my credit, but my credit is already deep down in the dumps, and allowing myself to get hit by a judgment or two doesn't seem to put me in a better position to rebuild my credit when I get out of school in two years' time. I know filing BK might not seem like the most morally just option here, but in my defense, I've learnt from my credit 'mistakes' (for e.g. I haven't had a credit card in 2 years), and aren't these laws in place for a reason anyway?
• Someone suggested that I not file BK, and just let the judgment pass. She said that I shouldn't even bother filing a response (within 30 days, and not something I can afford financially anyway) since Cap1 will win the judgment anyway. She then went on to say that I should just lay low after judgment, hope no one else sues me, and then work on repaying this judgment once I'm out of school and working. Essentially letting my othe debts lapse out of their SOL periods (4 years in CA I think). She told me that I shouldn't file BK because I don't really have any assets/property to protect, but she didn't elaborate on any other reasons. If I follow her advice and not file BK, should I bother contacting (and how, through the phone or fax?) Cap1 to negotiate some kind of settlement so that they agree to drop their case? I read somewhere that they might settle for 50-60% of the amount (which is really not something I can afford right now). Is that true?

So as you can see I'm really at a loss at what to do. Should I or should I not file BK in this case? I know it's going to cost upwards of $1000 to engage a lawyer to help me file BK, but that's a hurdle I'll tackle if I have to. I just need to know now, what the best course of action is. Thanks in advance!!

Message Edited by puppylover on 06-04-2007 05:02 PM

[sl]

I would not ignore the summons, that can lead to major problems down the road. I am not sure if at this juncture Cap 1 will listen to you but you have nothing to lose and everything to gain. Here is what I would do, I would call Cap 1 and ask for the Credit Manager in the Retention Department and explain your situation to them. Be honest and speak from the heart and see if you can work out a payment arangement. With the others - can you afford to pay anything on them?

Take it from someone who ignored the creditors at one time, they do not go away, they haunt you.

You are the only one that can really answer the question about filing BK. Sometimes it is the only way out.

Good luck!

SL

[Anonymous]

Thank you very much sL! I will definitely call them tomorrow to try and work something out. But what I'm worried about is whether or not the 22.7% interest the $7000 is being hit with will absolutely drown out the $50 or so p/m which is around the max that I can afford to pay right now (pretty much any cash that I come across right now goes towards tuition and books). And I'm pretty sure there's no chance in heck Cap1 will consider giving me a free ride (read: 0%) for the next 2 years till I'm able to work.

Does anyone else here have any experience/insight with regards to my BK question?

[Anonymous]

I agree with the previous poster. Avoid BK at at costs. Try to work out an arangement with CAP1.

That BK will stay on your record for ten long years and coming out of college, working and living you will want to make major purchases (house, car). Please try to work out an arrangement.

[sl]

Here is another thought....call a Debt Management Program and talk to them about the CAP1 situation and your situation. They may be able to work out a deal with CAP1 that you cannot. If you go that route, they zap the money once a month from your account and work with you and the creditors. Also something else to consider, if you are gradauting from college and seeking employment, I would say 75% of companies now run credit checks on their new hires. It is a lot easier to explain being behind payments on a CB than a BK. Just food for thought. Good Luck and keep us posted. Many have been in your shoes before.

[MM1234]

I was there too with SO many bills and hard times to pay them off. BK is only an option if you are getting close to being served by many creditors and there is NO way out but only after you tried EVERY WAY POSSIBLE!!

So far CAP 1 started it but others will follow. Especially if you are not paying anything at all. Even if you send $20/month you may be able to save your chances of getting these summons. But I wound NOT let these try and pass.

Only you know if BK will help you. Technically you may be a candidate for it....but realistically Im sure you'll need some credit in the next few years once done with school.

Do you have anything to SELL and use to pay down the CAP 1? You may have to dig deep and sell off many things. OR - can you ask family for a loan of 1/2 the CAP 1 bill. You mentioned they helped you with some money. Maybe paying off 1/2 will let them remove the suit.

With summer months can you work 2 jobs and pay down some bills. Can you switch to PART TIME Student and work some hrs here and there.

The Debt managment plan is an option and having that on your report will hurt it a bit but not as much as a BK. ... but you will need to have $$$ avail to pay the bills they negociate for you.

If you do go with a Debt Managment place, pick a real one, not the ones that are FEE based or advertised on the Internet Spam or Late night TV.

Many of us have had some credit issues like this so hang in there....

Message Edited by MM1234 on 06-05-2007 07:11 AM

Message Edited by MM1234 on 06-05-2007 07:12 AM

[Anonymous]

yes by all means do not ignore the summons.  Answer and still go to court, even if they do win.   If you don't they will automatically be awarded a default judgment and will seize everything you own, possiblibly your car.    If you show up, you at least have a shot with the judge working out a payment plan or something.   You can try calling Cap One but more than likely they will just tell you it's in the attorney's hands, but it's worth a shot.

Also this is a very very good forum to go to for some advice   http://forum.freeadvice.com/forumdisplay.php?f=84   Not that you won't get good advice on here but this forum specializes in people that are going through the exact same problem.   Many good experts are regulars on this board.   I strongly recommend you post your situation there.   Many legal expets chime in.    Good luck and let's us know how you come out of it.  

[Cory]

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puppylover wrote:

Thank you very much sL! I will definitely call them tomorrow to try and work something out. But what I'm worried about is whether or not the 22.7% interest the $7000 is being hit with will absolutely drown out the $50 or so p/m which is around the max that I can afford to pay right now (pretty much any cash that I come across right now goes towards tuition and books). And I'm pretty sure there's no chance in heck Cap1 will consider giving me a free ride (read: 0%) for the next 2 years till I'm able to work.

Does anyone else here have any experience/insight with regards to my BK question?

I probaly shouldn't say this, but I will file BK chapter 7. Unless you have someone whether it be a family member, spouse who can loan you the money to pay those bills. You owe a lot of money.

Like you said, they might haunt you down until you pay them. And I know they will. And they won't stop, no matter how long it takes.

My sister pay is being garnished from a debt in 1995. They caught up to her this year. They were diligent.

Cory

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[Anonymous]

I was in a similiar situation this last Fall Semester. I was served with a citation stating that I was being sued by Citibank. First verify that all the information filed in the suit is correct. You can challenge any discrepancy, even the amount your are being sued for. If you are a student at a big college or univeristy, your school may have a free legal services department. Fortunately my school had a great legal services department. They agreed to take my case free of charge. My FREE lawyer then tried to correspond with the adverse attorney forcing them to make sure that I was cleary the person that had aquirred the alleged debt. My lawyer explained to me that usually collection companies will file a whole bunch of law suits at one time. It can be very difficult for them to repsond to just one or two questions from a single law suit. Sometimes it is not worth the bother for them to do all the research. My lawyer asked them that if they couldn't prove it was indeed me they were trying to sue, they needed to cancel the law suit by filing a "non-suit." That's exactly what they did. And now I am free and clear. I think most collection companies hope that you don't file an answer to their summons. That way, the court is forced to file a default judgemnet; meaning you owe that money and then they (the collection companies) can be more aggressive in collecting assets and such. I hope evrything works out for you. I remember that sinking feeling when I opened my front door...

[Anonymous]

I was in a very similar situation a year ago. I did receive calls from attorneys but i never responded. However, I did end up settling the debt for less than full amount a couple of months later, August 2006. I was a year out of college and was already in trouble.

But i was fortunate enough to have friends who let me borrow money from them to pay off this debt. I did that and now i am almost done paying them back too.

I would say that see if you can have a few people give you personal loans. Once you find people to give you money and that they trust you, call up each creditor and say that you dont have the entire amount but ask what is the best they can do to settle this debt. They will ask how much money you have, say that you have nothing (which is the truth), and say that you are trying to get loans from somebody you know. Hopefully it can work for you too.

Good luck