Overwhelming Debt Mountain, Do I have time?

[Anonymous]

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@Anonymous wrote:

Thank you, I have started saving for settlement on some of them. I know it will be a long road, but hoping it will be over within a year. 

Another question and I'm unsure if I should make a new thread. Since majority of these were higher than 600, should I expect a 1099c for all of them soon or by the time tax time rolls around?

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Only if you settle for $600 or more LESS than the total owed on any individual account.

[StartingOver10]

Consider going back to your HR dept so you don't get a large lump sum back with your tax return. Have them tell you what you need to have taken out to accommodate your actual tax burden rather than paying in too much to Uncle Sam and suffering all year. if you are getting $5000 back then you paid in $5k too much which is about $416 per month extra income you can have to work with your debt. Giving Uncle Sam extra money hurts you in the long run. 

[Anonymous]

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@Anonymous wrote:

Thank you for the response. I know this sounds silly, but the reason we want to avoid court at all costs is because if our family knows of our situation (they are pretty bad off financially as well) they would willingly put themselves in deeper debt to help us. 

In your opinion do I have enough time until tax time before companies like (Midland Funding) try to sue us? I'm trying my hardest to make sure my wife is emotionally ok and trying to find some positive relief for her to see it will all be ok until then (hence being up at 4 am) searching the internet to try and comfort her. 

I thank you all for your help and please continue giving advice. I know it may sound stupid and silly, but I in know way trust myself to take proper steps with out guidance from someone or people who has already been there done that in my situation. 

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Creditors will generally hold off for at least a couple of years before sueing, even places like Midland. You have four years to collect debts in Texas (SOL), and most of the time they will wait until the third or fourth year before bringing suit.

[Anonymous]

Thank you, I will talk to them and see what they say. Our refund is usually 3, but when I said by then I might have 5k, the rest will be money we save towards the debt.

[Anonymous]

Thank you, and I know this varies, but if I start getting letters and calls how should I go about handling it? I hope this info will give my wife some piece of mind. She has been up all hours of the night just stressed out. I think this week alone she's lost a bit over 5 lbs .

[Anonymous]

Sorry for continually bumping my own thread, but I just wanted to update, since I posted this thread with a little cut back in house, we've saved about 130 dollars. I know it isn't alot, but hoping it will build up to be enough for something later. 

Does anyone have any advice on how I should start handling collection letters? I am particularly scared of the bigger jdb. 

[Anonymous]

First, breathe, relax, don't let this ruin your life.  Your credit is recoverable.  Keep saving, minimize spending, take lots of deep breaths and treat it like work.  There is a time to think about it (and plan the time) and a time to just live.

They will not take your vehicle.  They can only attach your bank account after they've already taken you to court.  If you do get taken to court, as someone said above, you will have 3-4 weeks notice (you will be served, either at home, or certified mail).  During that time you can negotiate, it costs them money to go to court, and sometimes payment plans can be made during that time.

Keep saving or send off small payments to the ones that you think are more likely to come after you legally.

Pick up a part time job, even working 1 Saturday a month at a pizza joint could get you an extra couple hundred dollars to pay towards debt.

You can do this and it doesn't have to ruin your life.

[Anonymous]

I want to re-iterate that she really should not stress about this too much. As far as the letters go, unless they specifically say they are taking you to court by such and such a day, you can pretty much ignore them, unless they have a payback plan offered that works for you. I find it extremely unlikely that any court action will be taken before tax time. If it does, it will most likely only be one creditor, and as stated you can negotiate with that specific creditor before the court date and most likely a monthly payment of as little as $50 at that point will keep any court action from taking place.
So bottomline, you really have nothing to worry about. You can hold off until tax time, at which point you can reach out to all lenders and settle some of the account, and be in a position to make monthly payments on the rest. Probably by the following tax year, if not sooner, all this can be behind you and will never set foot in a court room!
Good luck!

[StartingOver10]

Many of us here have been where you are now. That's one of the reasons we ended up here so we understand the stress involved.

It may not seem like it when you are in the middle but the collections process starts pretty slowly as pointed out above. 

When you need to move more quickly is if you get a summons.  Don't ignore a summons and don't try to dodge it, that's when default judgments happen without your knowledge.  Many times just showing up to court gets the collection co to get reasonable. But this step is way down the road.

In the meantime, you will get letters and calls. So now you are doing the right thing by planning your repayment strategy. It is a little easier to work with the OC for payments but you can get a smaller settlement accepted at a CA. Do some research on handling specific CA's - search several debt and credit websites to get different POV's for handling a specific collector. Different people will have different experiences. But you want to read up on those experiences so you can put together your own plan.  Congrats on savings the $130 this week. You will be surprised at how much money you can put together when you concentrate on it. 

If a debt is still with an OC and closed to further purchases - call up their hardship department and work out a small monthly payment. This will keep it from going to a CA. 

You can also get it with a reduced interest rate during the hardship period. When I went through it, the OC would only go out 6 months and then review the account to see if they would renew the hardship terms. But now that has been quite a while (2008) and others have more recent experience. I do remember the frontline CSR's could not work out a deal - it was only the 'hardship' department. Most of the cc's co's had hardship departments. Some were cooperative and some weren't. 

[Anonymous]

Thank you for your feedback, I think her main concern is that despite the ones we've let go into collection, we have a few others open example capital one (but no charging privleges) - we didn't want to deal with another one in collection and the minimum payment is low enough (25 dollars - we pay 30), discover (read they are most likely to sue, they dropped our apr for a year and our payment is down a bit, but no charging privileges), one bank of america open in her name with minimum payment of 25. 

Another fear is that with midland, even if they do decide to accept settlement for our other accounts such as creditone, for about 1,000 each it will take a chunk of what we have by tax time and we won't have much left for the rest. I've read that the lowest most place will go with payment plans are 50 dolalrs? Hoping there are some that will go lower if we need it as we can't afford to add more payments of 50 dollars a month. 

Thank you again for your words and encouragement. Hoping we make it through this.