topic Re: defaulting on credit cards in Credit Cards

defaulting on credit cards

Anonymous — Wed, 08 Dec 2010 19:54:09 GMT

I may have to default/let my credit cards go. Just to pay the minimum monthly payment is hitting close to $300 a month and because of it I'm not able to keep up all my other bills. (electric, phone, etc) I've already gone through the cutting out all un-necessary expenses. I've talked to one creditor about lowering my monthly payment. I'm trying to re-finance my car.

Is it better to just let them all go? Should I try to contact them to work out something first? Should I try to at least keep one of them?

I hate to do this but don't see any other options. My monthly income has dropped about $350 and my house payment is going up in January and my income is going down due to my medical insurance going up at work.

I've already recovered from bad credit one time and know what is involved and really hate to do this but when it means we don't have food to eat or electricity in the winter I'm not sure what else I should do.

Re: defaulting on credit cards

Creditaddict — Wed, 08 Dec 2010 20:02:05 GMT

Sorry to hear... I would try to work with all of them, but the chances of them working with you before you have missed a payment is very unlikely. But if you work with them before your 30 days late, it won't even hit your credit.

Re: defaulting on credit cards

waqaszm1 — Wed, 08 Dec 2010 20:08:09 GMT

i understand where you are coming from. lately, i have also experienced a significant reduction in income, but luckily my balances were not high. i split my cards in two categories, store cards and visa/mc/disc/amex cards. for the store cards, i paid off the cards which had really low balances little by little and when they reached a zero (0) balance, i cut up the cards so that i would not be tempted to use them again while leaving the accounts open to help with utilization.

as for the visa/mc/disc/amex cards- i am seriouly confused. i went thru a divorce in '08 - '09 that really messed up my finances. being an idiot, i got into another non-sense relationship and now this too i am afraid is headed for disaster, but this time i am trying to be careful. if i have to **bleep** my cards, i will dump hsbc, and probably bofa.

i will try my best to keep paying barclays, amex, discover, capitalone, and a local credit union. i will keep them so that when i rebound, atleast i will have good history with them to perhaps warrant a new accounts.

hsbc, and bofa - i dont care about ever getting cards with them again.

Re: defaulting on credit cards

Anonymous — Wed, 08 Dec 2010 20:08:53 GMT

Well I'm not sure that is worth it because by then you get hit with fees etc for being late/over limit.

Does anyone truly have any luck with creditors lowering the payments? I've got several low cards I'm tempted to just forget about like Capital One, Credit One, etc but I also have NFCU which I would hate to **bleep** over because they were the first to give me credit after I got my credit cleaned up.

I just don't see any other options. I've been juggling/struggling for months now and to make ends meet last month and avoid my electric being cut off I had to take out a loan from one of those loan shark type places which is making my financial situation even worse.

Re: defaulting on credit cards

Creditaddict — Wed, 08 Dec 2010 20:18:45 GMT

@Anonymous wrote:
Well I'm not sure that is worth it because by then you get hit with fees etc for being late/over limit.

Does anyone truly have any luck with creditors lowering the payments? I've got several low cards I'm tempted to just forget about like Capital One, Credit One, etc but I also have NFCU which I would hate to **bleep** over because they were the first to give me credit after I got my credit cleaned up.

I just don't see any other options. I've been juggling/struggling for months now and to make ends meet last month and avoid my electric being cut off I had to take out a loan from one of those loan shark type places which is making my financial situation even worse.

As soon as you get into an arrangement with them, the fees and all that stuff will stop and a lot of times they will waive the first one

Re: defaulting on credit cards

Anonymous — Wed, 08 Dec 2010 20:20:34 GMT

So it's better to try to work wtih all of them?? Do I just contact them and ask to cancel the card and then make payment arrangements?

Re: defaulting on credit cards

Anonymous — Wed, 08 Dec 2010 20:25:04 GMT

Is there anywhere you can cut back? When they cut hours at work, I took it as a sign doors will be closing soon (They did 1.5 months later). I made cuts, I did not and do not run the A/C or Heater (It's cold right now, even in Florida and hot as an oven when it's not cold). Turn off cable/internet and enjoy rabbit ears with open wifi. Inscribe from blockbuster, but still see my one movie a month at the $5 movie theater. Then most importantly, I went through everything I had and ask everyone I know if they had anything they do not want anymore. I pretty much have a huge garage sale on eBay, brings in $46x.xx last month and this month so far is $627.xx. While I am searching for a job like crazy, I still pay my bills and had my name taken off the lease according to our agreement in the lease (But new management refuses to follow through). Heck, I may even take up a part time job in delivering pizza if I can find a cheap van (Not going to deliver pizza in a 63 Ford).

I am just listing what I am doing for ideas for you, there are options and I would do everything possible to make sure everything is paid. I would call the companies up first and ask if anyway possible to have minimum payment reduced until things get better, then I will pay X amount when things do. I would show them if I was you that your trying and do not want to default.

Re: defaulting on credit cards

Anonymous — Wed, 08 Dec 2010 20:30:48 GMT

I appreciate all the advice/suggestions. I've already done all I can to cut back on stuff that we don't need. We have a pretty lean budget to start with. I'm currently working OT but that won't show up on my check until the end of the month. We never eat out. We don't buy clothes, go on trips, go out anywhere really so there is not a lot to cut. I've sold some stuff on eBay/Craigslist and have more stuff I plan to sell. Sold some old gold jewelry but all this is getting me is $100-$200 here and there which gets us caught up a bit and then the next month we are in the same place.

My hours weren't cut back but I was receiving extra income each month that nearly covered my car payment that I won't be receiving now. Then with my house payment going up (my house payment is only $383 so I don't think we are living beyond our means as rent is easily $500-$600+ even for a cheap place) and my income going down due to my health insurance going up at work I think things are going to be worse not better.

I was asking for the best way to deal with the credit cards.

Re: defaulting on credit cards

Anonymous — Wed, 08 Dec 2010 20:36:17 GMT

Hi savvyguy! Welcome to the FICO forums. I'm sorry that you've joined us under trying circumstances, but I'm glad that you found us all the same.

@Anonymous wrote:
Well I'm not sure that is worth it because by then you get hit with fees etc for being late/over limit.

Does anyone truly have any luck with creditors lowering the payments? I've got several low cards I'm tempted to just forget about like Capital One, Credit One, etc but I also have NFCU which I would hate to **bleep** over because they were the first to give me credit after I got my credit cleaned up.

I just don't see any other options. I've been juggling/struggling for months now and to make ends meet last month and avoid my electric being cut off I had to take out a loan from one of those loan shark type places which is making my financial situation even worse.

I don't have to tell you that you should avoid default like the plague. If, at all possible. Unfortunately, you won't be able to just forget about any credit card that you stop paying. A short walk through our Rebuilding forum will reveal the ugly truth that Capital One (for example) will almost always sue you before the SOL expires. You'll end up paying more than you owe now. You could be sued, and garnished.

But, I understand your situation. Have you read the FTCs Knee Deep in Debt? That's a good starting place for researching your options. Like Creditaddict already mentioned, it doesn't seem that lenders are willing to work with you until you're already missing payments. But, that shouldn't stop you from trying, and trying again... and again, if need be. Also, have you talked to NFCU about the possibility of a consolidation loan? <-- Not something to consider lightly, and you'll need to have the discipline not to accumulate balances that you can't PIF, along with your monly installment payment if this is feasible.

You mentinoned in your first post that you've cut out everything that you could, but I'd strongly suggest that you have another look, and cut deeper if there's any possible way. Is a 2nd or 3rd job a possibility? You're a homeowner, have you considered taking in a renter... or, moving out of your home, renting it out, and finding less expensive housing? Is there anything you can sell?

ETA: I was typing while you were posting, so I see that you've already made deep cuts in your budget & considered the cost of renting vs. staying in your home.

Re: defaulting on credit cards

Anonymous — Wed, 08 Dec 2010 20:43:27 GMT

Ahh, well if no where to cut then I do not know. I will keep an eye out on this thread as should others. Because many people may be in the same boat in near feature. Your also right on rent, mind is $812.50 a month for a 2/2. Rent is not cheap in Florida and moving is not truly an option (well hard). Is there anyone you can hound that owes you money (I am, she owes $700+)?

(Before anyone asks why I applied for credit, all the recent ones I received is in a sock locked up)

Re: defaulting on credit cards

Anonymous — Wed, 08 Dec 2010 20:59:23 GMT

I didn't expect to be in this mess. As with a lot of other people un-expected expenses came up etc and when it comes down to paying my electric bill vs paying CC it seems that I should be paying electric bill and not CC. But CC messes up my credit and electric bill doesn't.

I don't have anyone I can get money from. My parents helped me out a couple months ago but only with a few bills and so that never really got me caught up. I don't really have anywhere for a renter to sleep if I took one in and not sure I want some strange person living in my house with my things. We do have a friend that will be moving in in the future that will help pay some bills/expenses but that isn't possible for a little while yet.

I work 9-10 hours a day plus Saturday and have a one hour commute each way so it doesn't leave a lot of time for a 2nd or 3rd job. My car payment is a big one if I could get rid of it but as soon as I paid it off my car died (would have cost thousands more to fix than it was worth) so I had to take on a new car payment. My milage is pretty high on it (long commute) but not quite underwater yet but not sure trading it in would be any better. Need a reliable car to get to work.

Re: defaulting on credit cards

hedgeclipper2 — Wed, 08 Dec 2010 21:02:43 GMT

Sorry you are in the situation you are in. It sucks. I have been there.

But, most creditors are willing to work with you IF you contact them before the problems start. Maybe they could reduce your interest rate for a while so your payments will matter more. I know most of my creditors did this. They reduced my interest rate and told me I couldn't charge on the cards anymore until they were paid off.

I would just keep calling and being as nice as possible. People often forget how far being nice goes

I wish you all the best and I hope you do not have to damage your credit in the long run. However, you are right, electricity comes first!

How good is your credit? Is there any way you can get a low interest card and balance transfer to this card?

Re: defaulting on credit cards

haulingthescoreup — Wed, 08 Dec 2010 21:03:00 GMT

Just a quick comment --even though your utility company doesn't report your regular activity to the CRA's, if you get behind, they might, and if they send you to collections, they definitely will.

Re: defaulting on credit cards

hedgeclipper2 — Wed, 08 Dec 2010 21:06:18 GMT

Also, I know its kind of hard to post details about financials due to embarrassment or whatever reason....BUT....if you posted some of the cards you have that you want to reduce rates on there may be some people on this board that have had similar problems and can lend insight or techniques and information that could be helpful. Just a suggestion

Re: defaulting on credit cards

Anonymous — Wed, 08 Dec 2010 21:08:02 GMT

My credit is in the low to mid 600s now. It would be higher but my utilization is high on all my CC. I've finally gotten it up in the last 1 1/2 years. I still have some old charge-offs on my CR from 4-5 years ago from Merrick, Household Bank, etc that are pulling me down.

Re: defaulting on credit cards

hedgeclipper2 — Wed, 08 Dec 2010 21:09:43 GMT

By any chance are you a member of Navy Federal Credit Union? Or any other Credit Union that you have credit products with? They often have killer rates on balance transfers. I just transferred a home remodel onto my NFCU card at 2.99% which saves alot of money in the long run.

Re: defaulting on credit cards

Anonymous — Wed, 08 Dec 2010 21:13:54 GMT

I am a member with NFCU...car loan, LOC, 2 CC. But they won't increase my CC limits. So not sure what else I can do. I guess I could contact them and see what else they can offer me. The local CU I have a CC with only offers $500 limit for people with less than stellar credit.

Re: defaulting on credit cards

hedgeclipper2 — Wed, 08 Dec 2010 21:15:44 GMT

I would definitely call them. They are very pleasant to deal with in my opinion.

It is a breeze to do refi's with them too. Maybe you could refi your car loan to squeeze out a little more money? Just a possibility.

I hope I am being helpful, lol.

Re: defaulting on credit cards

Anonymous — Wed, 08 Dec 2010 21:40:08 GMT

Yes you are being helpful. I've tried in the past with them and they said they can't re-fi just to lower my monthly payment.

I'm not too hopeful because they declined me to increase my LOC by $500.

Re: defaulting on credit cards

hedgeclipper2 — Wed, 08 Dec 2010 21:38:55 GMT

That seems weird. Especially since you aren't totally upside down in the car. Are you a member of any other credit unions that could get your payment reduced?

Also, you didn't say anything about your house, but a QUICK way for easy income is to rent a room in your house if you can. It's what I do (I use the money to save and spend on vacations and things I wouldn't normally buy with my own money, haha)