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Facing Dilema

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maggie88
Valued Member

Facing Dilema

 

We, my husband and I are in our 60's. He's going to be 65 next month.  I am at my wits ends here. He barely got enough work in the past 2 weeks due to rain and the partials for unemployment were denied.

He is in construction, materials, and the work was has been slowing down t nil lately. He's panicking and so am I.

 

Bills are due and we have enough money to get by for the next month or so.  There are no credit cards debts. I have only 2 loans with payments of $600 each.  From what I am told these are considered. Lines of Credit and are with the BOA.

 

In tears and panic mode I called the Cambridge Credit Counselors on Friday. First she told me that I don't have enough debt and that they cannot take the bank debt. She did however, give me a phone number to the internal programs to call and explain my case too.  She told me she'd call me back on Monday to see what happened.

 

I've explained to her that I have tried on numerous occasions to call, write and even go in person to explain the situation. There answer was this:

  • 1. Ratio to Income
  • 2. Go to the collection department

 

 BOA does not want to hear any hardships stories of any kind. So that's stressing me out big time.  My first loan was with MBNA that BOA bought out. The second loan my husband wanted to consolidate all payments into one. It backfired really into a bad loan.  They got us hooked, gave is a high interest rate of 18.99% variable and a payment of $600 a month due each month. 

 

On Monday I am going to give this one more shot and if this fails I don't know what else really to do except either go with a counselor or bankrupted.

 

One other suggestion was given, that is to divide that balance of $28,000 onto 3 credit cards and be rid of them. Yet I fear their interest rates.

 

 

On top of it all my husband is thinking of borrowing a small amount from his 401K to tide us over for the next few months. The payments aren't bad on it. But as I tried to explain to him, what if they lay you off? You will have to come up with the $4,000 up front and pay taxes whereas before you didn't. He lost quite a bit of 401k due to the market plunge already.

 

 

No matter how hard we're trying to keep ourselves from not spending, cutting back on excessive necessities, groceries and going out.   Am I just having an anxiety attack?  Do any of you have any other solutions?  I sure could use some advice. 

 

Message 1 of 8
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maggie88
Valued Member

Re: Facing Dilema

 

Yes the both of us have IRA's.  My husband's is just sitting in the bank doing nothing and mine, although small, I am contributing monthly to it.  He has about $4,900. 

Stocks or bonds...tanked so we have nothing there.

BA is an entity that needs to be looked at rather than be given a bailout. I do hope the government does nationalize these banks. For years they have taken advantage of consumers; beginning with opening accounts and their hidden fees. Dangling carrots to young college students and getting them into a lot of debt before they even graduate.   

What you explained about your friend and her problems with BA is what I had gone through with them and was the prime reason I closed my account with them and went to another bank. 

I've been doing research on this and this is what I found:

For those of you with good credit

who fell predatory to BOA's clean sweep mailing in better times only to be duped by a phone conversation agreeing to an interest rate that afterwards doubled when the terms of the loan was received.

Even after communication, BOA fobbed me off by saying the terms changed with the interest rate as I had written cash advance check since the loan was originated.

 

They did credit some money back after the shoddy banking policies, but after many unsuccessful attempts to sabotage my credit...double billing, late fees and the more recent one of slashing my credit limit, I called to resolve and close out the account and requested to be credited the difference in interest unduly paid.....they rejected my offer.....

 

One has to wonder if BOA finds it easier to cry wolf to Government pay offs than it has over having a conscience about how they treat their customers.

 

Whatever the case, it makes for shallow ethics and sleazy banking.....they set me up to default.

 

Also this:

 

Bank of America offers a loan program that is called the Clean Sweep line of credit. This loan is for people that are in need of debt consolidation. There are many tricky aspects to this loan and after we go over the terms, you may wonder as I did, if Bank of America really wants you to ever pay this loan off.

The Clean Sweep line of credit offers a variable interest rate that can go as high as 25.49%, this is based on your credit. So the more desperate you are to get your debt under control, the higher your interest rate is going to be.

Bank of America will charge you a 3% transaction fee every time you need an advance. Most important is the fact that every time you request an advance the bank restarts your payment term. Those terms can go as long as 72 months. That is six years of your life, and in a moment we are going to look at the way MBNA or Bank of America will rack up your fees.

With the merger of MBNA and Bank of America here is what they advertise for their debt consolidation loans. You may borrow up to $25,000 to help you be able to pay off those high interest debts. You could possible get an interest rate as low as 9.49% variable APR. Remember we already pointed out that it is based on credit and you may end up with an interest rate over 25%. There is no collateral needed for this loan, there aren't any pre-payment penalties. There isn't any annual fee, and you can get a decision as soon as 15 minutes after applying. The added benefit of the loan is that you are building a re-accessible cash reserve as you pay down the balance.

More of the fine print that most people do not read before signing a loan document. So read it here. MBNA will recalculate your APR by adding a margin to the highest U.S. Prime Rate as published in the Wall Street Journal on the last publication day of each month. Which is how you may start at 9.49% and go as high as 25.49%. They also reserve the right to adjust your APR on a monthly basis due to changes in the prime rate. They also reserve the right to change your fees or other credit terms at their discretion.

Repayment term and payment amounts given are only estimates which may change when your APR changes, if you by chance make a late or partial payment then fees will be assessed. The three percent transaction fee is simply a minimum of $5 and there is no maximum limit. The transaction fee is added to your loan and it will accrue interest and finance charges. OH! And they let you know that there is the possibility that other fees may apply.

Based on what I have read from customers that have worked with this program and bank was that they wish they had gone somewhere else. The program though it sounds like the answer in the beginning can put you in more of a financial burden then what you started out with. Plus, I haven't seen very good reviews of the customer service that you receive.

 

 

Thank you for that advice on going to the IRA.  Now can you explain what disbursements mean on the 401K.  It's all new to us.

Message 4 of 8
7 REPLIES 7
Anonymous
Not applicable

Re: Facing Dilemma

Do you have any IRA's or Annuities that you can tap into?  

 

Any stocks or bonds you can cash out?

 

My friend owes BA 31k.  She tried to go on a payment plan (loss of income, interest rate shot up, payments more than doubled).  She had been a loyal, on time, very seldom had a balance customer for years with BA.  She used her cc every once in awhile to make a large purchase, and would pay it off, usually within 3 months.

 

For 3 months, she called BA and tried to go on a pymt plan, or come up with another plan.  They told her to forget about it.  Literally.

 

In January of this year, she tried once again to work something out with them.  She was told to let the debt go, they would NOT work with her, and  that in 8 months they would charge off the debt. 

 

Simply put, they refused to work with her, despite her repeated efforts.  The collections lady even went so far as to say since she was not working, she did not qualify for any plan or modification.  The lady told her not to bother sending in anything, unless it was the full amount due.

 

With a sad heart, and a near perfect credit score, she missed her first payment EVER in 01/09.

 

Keep trying.  Keep notes.

 

You are right about the 401k loan - if husband leaves his job - they can demand it back in full.  

 

Have you looked into getting disbursements from the 401k plan?? 

Message 2 of 8
Anonymous
Not applicable

Re: Facing Dilema

I am so very sorry to hear about your situation due to underemployment/economy. I'm really hoping that things pick up for you, and soon. I understand how scary, frustrating, and just downright stressful it is to face a loss or significant decrease in income while trying to maintain the costs of living. One would think that, given the current economic climate, that lenders would be more accomodating of responsible borrowers who are making a lions effort to continue to pay as their income and ability to pay decreases. Instead, it frequently seems like the lenders enjoy default, rather than repayment. It's ridiculous.

 

Obviously, we can't force banks to behave rationally, and respond responsibly to customers (especially in light of them borrowing money from US... grrrr!), but getting your situation a little more exposure just might help. At least, I recently suggested this to a friend recently, and it did the trick:

 

Look up the SEC filing for the lender that you need to work with. If you can't find it, PM me and I'll send it to you. You can just Google the bank name and "SEC filing". Find the name of the one of or more of their senior executives. Record the name(s) and the direct mailing information for the Executive Offices. Next, go to the United States Dept. of Treasury homepage, find the "Contact Us" link for the media relations department. Call the number, and ask who you can make a complaint to about a bank. Work through this process until you talk to someone who can can give you a full name.

 

Send a letter to the BoA senior executive(s) overnight (if you can afford to, otherwise, try to send it certified mail). Make certain that it's going to their Executive offices listed in their SEC filing. When you construct the letter, prominently cc the individual that took your complaint from the U.S. treasury department, using this (public) mailing address: Office of the Treasurer, in addition to one of your Senators.

 

In the body of the letter, explain that you've been an excellent customer of the bank for whatever number of years is applicable for your situation. Briefly explain your current financial difficulties, and put emphasis on the fact that your DH is still employed, but "underemployed" due to the current economic climate. Explain how you very much desire to meet your obligations and not default. Add that you believed, based upon this blurb from the BoA website that they would work with you in developing a more affordable payment plan that would allow you to repay your debt:

 

Relief Starts with a Phone Call

Everyone goes through difficult times, and that's when you need someone on your side the most.

 

Finally, briefly explain your specific experience with following their directions for borrowers having difficulties, in detail. Explain how you have made a reasonable attempt to get assistance, but that none was offered. Reference the TARP funds that this lender received, and very kindly as if they will assist you in modifying your loan as a responsilbe lender would.

 

Obviously, YMMV with this approach, but I've found that if you can get above the first few layers of customer contact, that you can get to people who usually have a more vested interest in not drawing negative attention to themselves. In my friend's case, she received a call from an individual in the Executive Offices the exact same day that her overnight mail was received, and it took three days for her problem to be resolved fully.

Message 3 of 8
maggie88
Valued Member

Re: Facing Dilema

 

Yes the both of us have IRA's.  My husband's is just sitting in the bank doing nothing and mine, although small, I am contributing monthly to it.  He has about $4,900. 

Stocks or bonds...tanked so we have nothing there.

BA is an entity that needs to be looked at rather than be given a bailout. I do hope the government does nationalize these banks. For years they have taken advantage of consumers; beginning with opening accounts and their hidden fees. Dangling carrots to young college students and getting them into a lot of debt before they even graduate.   

What you explained about your friend and her problems with BA is what I had gone through with them and was the prime reason I closed my account with them and went to another bank. 

I've been doing research on this and this is what I found:

For those of you with good credit

who fell predatory to BOA's clean sweep mailing in better times only to be duped by a phone conversation agreeing to an interest rate that afterwards doubled when the terms of the loan was received.

Even after communication, BOA fobbed me off by saying the terms changed with the interest rate as I had written cash advance check since the loan was originated.

 

They did credit some money back after the shoddy banking policies, but after many unsuccessful attempts to sabotage my credit...double billing, late fees and the more recent one of slashing my credit limit, I called to resolve and close out the account and requested to be credited the difference in interest unduly paid.....they rejected my offer.....

 

One has to wonder if BOA finds it easier to cry wolf to Government pay offs than it has over having a conscience about how they treat their customers.

 

Whatever the case, it makes for shallow ethics and sleazy banking.....they set me up to default.

 

Also this:

 

Bank of America offers a loan program that is called the Clean Sweep line of credit. This loan is for people that are in need of debt consolidation. There are many tricky aspects to this loan and after we go over the terms, you may wonder as I did, if Bank of America really wants you to ever pay this loan off.

The Clean Sweep line of credit offers a variable interest rate that can go as high as 25.49%, this is based on your credit. So the more desperate you are to get your debt under control, the higher your interest rate is going to be.

Bank of America will charge you a 3% transaction fee every time you need an advance. Most important is the fact that every time you request an advance the bank restarts your payment term. Those terms can go as long as 72 months. That is six years of your life, and in a moment we are going to look at the way MBNA or Bank of America will rack up your fees.

With the merger of MBNA and Bank of America here is what they advertise for their debt consolidation loans. You may borrow up to $25,000 to help you be able to pay off those high interest debts. You could possible get an interest rate as low as 9.49% variable APR. Remember we already pointed out that it is based on credit and you may end up with an interest rate over 25%. There is no collateral needed for this loan, there aren't any pre-payment penalties. There isn't any annual fee, and you can get a decision as soon as 15 minutes after applying. The added benefit of the loan is that you are building a re-accessible cash reserve as you pay down the balance.

More of the fine print that most people do not read before signing a loan document. So read it here. MBNA will recalculate your APR by adding a margin to the highest U.S. Prime Rate as published in the Wall Street Journal on the last publication day of each month. Which is how you may start at 9.49% and go as high as 25.49%. They also reserve the right to adjust your APR on a monthly basis due to changes in the prime rate. They also reserve the right to change your fees or other credit terms at their discretion.

Repayment term and payment amounts given are only estimates which may change when your APR changes, if you by chance make a late or partial payment then fees will be assessed. The three percent transaction fee is simply a minimum of $5 and there is no maximum limit. The transaction fee is added to your loan and it will accrue interest and finance charges. OH! And they let you know that there is the possibility that other fees may apply.

Based on what I have read from customers that have worked with this program and bank was that they wish they had gone somewhere else. The program though it sounds like the answer in the beginning can put you in more of a financial burden then what you started out with. Plus, I haven't seen very good reviews of the customer service that you receive.

 

 

Thank you for that advice on going to the IRA.  Now can you explain what disbursements mean on the 401K.  It's all new to us.

Message 4 of 8
maggie88
Valued Member

Re: Facing Dilema

Yes that was my whole understanding as well at this time, which they would be willing to work with the mainstream that is hurting just as much as they are. Evidently BOA doesn’t feel they’re hurting at all. In fact they gave their executives a nice fat increase before receiving their bailout.  Now there is a possibility that BOA and a few others are going to be nationalized.

When all these loans were freely being handed out like candy to the consumers to buy homes, I remember one young banker telling us that, we as banks were leaving out a another group of people that in the past were ignored; the ones who had no real equity to get loans.  It was a whole new entity that they want to reign in and give out money too.

No we cannot control these banks and their greed or tell them how to run their businesses. But we can become savvy to their unethical banking habits and beware.  This is why we are all in this mess in the first place…GREED.

I really appreciate this help you suggested and have printed it out. I am going to try this as well.  It cannot hurt.   

[[[Reference the TARP funds that this lender received, and very kindly as if they will assist you in modifying your loan as a responsible lender would.]]]Could you explain what that TARP fund means? I’m trying to learn as much as I can.  It really felt good to hear some more advice and hear others that have had similar problems.  It’s miserable when you feel alone and can’t speak to live people or get the help you need.  The stress of this may cause my cancer to come back and I’m trying hard not to let this all get me, or my husband down.   Thanks both of you.
Message 5 of 8
Anonymous
Not applicable

Re: Facing Dilema

1.  The idea to go to the next level of management with BA is a good suggestion.

 

2.  IRA's can be drawn on, without penalty, if you are 59.5 years old.  You said both your and your husband are 60+.

 

Consider not contributing to the IRA for a short time until you feel you can afford to.  

 

Use any contributions to pay down the debt.

 

3.  Check with husbands company about how to get disbursements from his 401k plan.  He is over 59.5 years old, so there should be no penalty for that.  The company may have an internal rule that says he needs to officially retire first before he can access the funds.

 

4.  Good luck with BA.  I have done battle with them for years and usually win.  My friend decided to let them swallow the debt.  She has nothing for them to collect - no job, no house, no car, no bank accounts.  She was cash only, unless their was a big purchase.

 

BA asked for a total of 4 disbursements with round 2 of the bailout money.  I have no sympathy for them.

 

Keep feeding your faith.   

Message 6 of 8
maggie88
Valued Member

Re: Facing Dilema

First I wish to thank you for helping me with this issue.  I had to come here and let you both know my results this morning. This morning I sharply made the phone call of dread to the BA and hoped for the best.  I was a nervous wreck, not to mention scared.  The young woman I reached had begun the conversation with a harsh attitude problem at first and was quite impatient with me.  I asked her if I could speak with a loan officer about my accounts and a hardship.  She asked me, what hardship you are going through. I explained the situation; and then the so call $100 lecture of “why?”   My reply was the economy for one, lost of hours of work for both of us for another.    What do you want done, she asks?  I told her either your bank works with me with my payments and the interest rate, one or the other, or I take these accounts and put them into bankruptcy.  You cannot take blood from a turnip. I was at my wits end with her attitude, but maintained my own. Suddenly the attitude takes a complete turnaround and I get, well what we can do for you madam,  is put you on a “SPECIAL REDUCE PROGRAM.”   Would you like me to send out the forms or would you like to do it over the phone.   We did it over the phone  I was then transferred to this dept. They asked basically for the same questions as a credit counselor would ask. Like, what’s your monthly income, phone, cell phone, other accounts if any, car and mortgage/rent payments etc?  

Then they figure out what you can pay and afford according to the information given.  The young man to whom I was speaking said that I shouldn’t have been given this  second loan. Then ask questions as to what the purpose of that loan was for and I remembered  who the loan officer was. I did, looked on my notes and told them it was a woman.

 When I gave him the name, he said okay we know who this is and by the way she was fired from the company for giving out these loans to folks who could not afford them. The best they could do on the larger loan was lower the interest rate, but drop the payment only $67.00 because it’s still high.      The special reduce program goes like this:1.     The accounts are closed down.  It will reduce your fico score, but once you make payments that will rise again.  No money can be taken out of this account.2.     This will be for 60 months, 5 years3.     Payments must be paid on time. If you miss a payment or default, the account goes back to the original state and interest, plus late fees. According to the information given I was told this:1.     On the MBNA account bought out by BA for $22,0002.     The interest rate  will go from 12.99%  to now a 4.75%3.     The payment on this will go from being $600 a month to now $430 a month On the second loan given:1.     The amount of $27,0002.     The interest rate of 18.00%  will now be $4.25%3.     The payment of $600 a month will be $520.00 a month.

 

This was a far cry from the treatment I received via phone call and in person.  I can't ask for anything better I suppose.

 

I will however continue to look into things and make others aware that they are not alone or up against a wall and that a consumer does have some rights.

 

Thanks everyone

Message 7 of 8
iamrayl
Regular Contributor

Re: Facing Dilema

maggie88, 

 

Glad BOA came around and are now working with you.  If at first you don't succeed, always keep calling until you talk to someone that has a sympathetic ear.   Good luck.

Message 8 of 8
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