topic Re: Things Just Went From Bad To Worse in Rebuilding Your Credit

Things Just Went From Bad To Worse

Anonymous — Fri, 03 Oct 2014 09:05:04 GMT

Hi Everyone,

I posted last week here ("I've Really Made A Mess Of Things") about how I've gotten myself into about $3,000 worth of CC debt because I didn't understand how all of this stuff works. Well, things just went from bad to worse. The GD government went and garnished my wages for some back taxes. I only found this out a few hours ago when I checked on my direct deposit and saw it and I've been basically suicidal (not even kidding about that).

I can't even contact them for another few hours to find out why I was never even notified they were doing this or if they're going to do it again, so right now I'm in absolute panic over this. The $140 they stole from me means ZERO to them but it was everything I could spare to cover just the minimum payments on these cards and now I don't even have that. So now I can't pay ANY of my cards this month and all the fees and interest are going to start racking up now and I'm NEVER going to be able to get out of this hole.

So I guess my question is what are my options? I absolutely cannot pay anything at all towards these cards, so do I just cut my losses altogether and cancel the cards so that at least the interest and late fees will stop accruing and then just pay down the final balance as I can or am I kidding myself and even if I cancel them, everything still acrues?

I just am at my wits end. This is how people go homeless - one little setback and everything crumbles and being on a fixed income, that's where I'm headed - the streets. So please, no judgment - I know I effed up BIG TIME and I can't fix this, so what's my best option right now?

Thanks

Re: Things Just Went From Bad To Worse

Imperfectfuture — Fri, 03 Oct 2014 09:55:19 GMT

First off, suicidal is no joke. Don't be on the forums. Call 211.

You have more problems than CC debt. This is perhaps best directed towards the rebuilder forums. I am on fixed income+ (additional income I've saved up), and if 140 kills you from paying the cards, you really need to think about alternatives with financial counselor.

But seriously, take care of the mental health first.

Re: Things Just Went From Bad To Worse

barbaralee — Fri, 03 Oct 2014 10:54:19 GMT

Being suicidal over debt is a serious issue. I agree with the previous poster where I would be more concerned about your mental health than the debt. If you are THAT distraught over it, just default, don't kill yourself because Comenity wants their min. Payment. If you can't pay it, you can't pay, that is all there is to it. Rent, utilities and food should come before making a credit card payment.

The interest and fees with continue to accrue, even after you cancel the cards. Also, if you are planning on contacting the IRS you may have to go to their location. A coworker is having the same issue with back taxes and he told me that when he tried to call they no longer take phone calls.

Please speak to a mental health professional.

Re: Things Just Went From Bad To Worse

elim — Fri, 03 Oct 2014 11:42:32 GMT

@barbaralee wrote:
Being suicidal over debt is a serious issue. I agree with the previous poster where I would be more concerned about your mental health than the debt. If you are THAT distraught over it, just default, don't kill yourself because Comenity wants their min. Payment. If you can't pay it, you can't pay, that is all there is to it. Rent, utilities and food should come before making a credit card payment.
The interest and fees with continue to accrue, even after you cancel the cards. Also, if you are planning on contacting the IRS you may have to go to their location. A coworker is having the same issue with back taxes and he told me that when he tried to call they no longer take phone calls.

Please speak to a mental health professional.

although i have not been garnished by IRS, i do owe (and pay monthly) 16k in fed back-taxes. i discuss my options with them every few months (the last call being 3 months ago). if you owe them, they will gladly discuss your options over the phone.

is deferment an option on any of your bills?

can you kill some other bills?

can you sell some stuff?

can you apply for any 0%/15 month BT cards?

can you get a second job today?

calling the IRS will NOT be a quick fix, even if they do anything for you... it will take months to process.

don't panic... it's just debt, acceptance will help.

don't live in the stress, live in the solution.

Re: Things Just Went From Bad To Worse

barbaralee — Fri, 03 Oct 2014 11:38:19 GMT

Belladonna, what is your income? What expenses do you have and does your job offer overtime?

Re: Things Just Went From Bad To Worse

Anonymous — Fri, 03 Oct 2014 11:39:17 GMT

If you're that concerned, file for BK.

Re: Things Just Went From Bad To Worse

wacdenney — Fri, 03 Oct 2014 12:08:21 GMT

I've had something similar happen to me before. The garnishment was expected in my case and I was fine with the 25% going to them just to have it over with. It was a bill I did NOT owe and I lost the court case because of stupid technicalities but that's a different story.

The worse part about the whole experience for me was that they siezed my bank accounts and MY OWN BANK didn't even tell me. Not even so much as an email. That meant I didn't cancel auto-drafts in time... I was still using paper checks at the time... It was a mess. I understand the bank had no choice, but they could have at least notified me. I had to close all my accounts and live on cash for awhile until it was ll over.

Just hang in there, it's really not the end of the world. There's not really much you can't come back from with time and effort.

Re: Things Just Went From Bad To Worse

Anonymous — Fri, 03 Oct 2014 12:29:25 GMT

@Anonymous wrote:
Hi Everyone,

I posted last week here ("I've Really Made A Mess Of Things") about how I've gotten myself into about $3,000 worth of CC debt because I didn't understand how all of this stuff works. Well, things just went from bad to worse. The GD government went and garnished my wages for some back taxes. I only found this out a few hours ago when I checked on my direct deposit and saw it and I've been basically suicidal (not even kidding about that).

I can't even contact them for another few hours to find out why I was never even notified they were doing this or if they're going to do it again, so right now I'm in absolute panic over this. The $140 they stole from me means ZERO to them but it was everything I could spare to cover just the minimum payments on these cards and now I don't even have that. So now I can't pay ANY of my cards this month and all the fees and interest are going to start racking up now and I'm NEVER going to be able to get out of this hole.

So I guess my question is what are my options? I absolutely cannot pay anything at all towards these cards, so do I just cut my losses altogether and cancel the cards so that at least the interest and late fees will stop accruing and then just pay down the final balance as I can or am I kidding myself and even if I cancel them, everything still acrues?

I just am at my wits end. This is how people go homeless - one little setback and everything crumbles and being on a fixed income, that's where I'm headed - the streets. So please, no judgment - I know I effed up BIG TIME and I can't fix this, so what's my best option right now?

Thanks

Ususally the GD govt sends warning and attempts to collect before garnishment... Don't avoid, call and make a deal - or you will be paying big time. I know because this happened to me. Sorry about your troubles. Call the govt and ask for a reduction as they will work with you now that they got your attention.

Re: Things Just Went From Bad To Worse

Anonymous — Fri, 03 Oct 2014 12:59:07 GMT

Hi Everyone, thank you all for your support! I just found out I've been a victim of identity theft! I called Social Security and they told me there is a court order to collect taxes from me and I had to contact the IRS. I did that and was told by them that they did NOT file a court order against me because I am on disability and in "con-collectable status" . Then he said something about my 2013 return and I said I hadn't filed since 2009 because I never made enough money on disability and he said, 'Someone filed a 2013 tax return with my name, SS #, and my former address in Oregon (I have not lived there since 2009) and that whoever this was got a tax refund in MY NAME. So now I have to make a million phonecalls to Oregon and the credit card companies, all my utiiities. I'm going to have to cancel all of my credit cards because this identity theft stuff is just too easy for people to do. This is such a nightmare.

Re: Things Just Went From Bad To Worse

BootStraps — Fri, 03 Oct 2014 12:59:59 GMT

I'm glad that you located the problem. This, even though it is a terrible experience, puts you in a place of control where you can take solid action to fix it.

Cancelling all of your cards would not be your best course of action. You definitiely WILL want to let all of your creditors know that your identity has been stolen. Place a fraud alert on your reports NOW and consider freezing your credit reports.

There is a thread about this that you might find useful:

http://ficoforums.myfico.com/t5/General-Credit-Topics/Victim-of-Identity-Theft-What-To-Do-to-Protect-Yourself/td-p/2059499

All the best to you!

Re: Things Just Went From Bad To Worse

1GaDawg85 — Fri, 03 Oct 2014 14:24:11 GMT

Don't cancel your cards, call the creditors and inform of the issue and ask to speak to someone in management if you can't get the front line CSR to do their job

Re: Things Just Went From Bad To Worse

Anonymous — Fri, 03 Oct 2014 14:30:15 GMT

I did everything I was told to do - filed police report, got an affidavit from FTC, put the 90-day alert on my credit reports and sending a form to IRS about the situation. I got a relative to help me cover the credit card payments this month, so all's calm now.

Someone mentioned here about filing bankruptcy. I've always heard that's the worst thing you can do to your credit score. But I'm in such a pickle, there's no way I can pay off these cards anytime soon. Let's say I did do bankruptcy as a last resort - does that mean they take all my credit cards completely away from me? If that's the case and I can't get credit because of the bankruptcy, how would I go about rebuilding my credit score? It seems like a win-lose situation. Has anyone gone this route?

Re: Things Just Went From Bad To Worse

Anonymous — Fri, 03 Oct 2014 14:41:17 GMT

You'd have to rebuild with secured credit cards. Bankruptcy should be absolute last resort. Call your credit card companies, let them know about your situation and try to work out a payment plan or deferred payments for a little bit until you can afford min. payments again.

Re: Things Just Went From Bad To Worse

nightglider — Fri, 03 Oct 2014 14:48:45 GMT

@Imperfectfuture wrote:
First off, suicidal is no joke. Don't be on the forums. Call 211.

You have more problems than CC debt. This is perhaps best directed towards the rebuilder forums. I am on fixed income+ (additional income I've saved up), and if 140 kills you from paying the cards, you really need to think about alternatives with financial counselor.

But seriously, take care of the mental health first.

While I can appreciate your goal in encouraging OP to obtain mental help, we already know the cause of this issue. In my area, the mental health professionals were at one point getting overwhelmed with patients with depression. Many of those patients were found to be having financial problems and were referred to a financial advisor.

In this case, getting help with financial issues is the best thing OP could've done.

Re: Things Just Went From Bad To Worse

jamesdwi — Fri, 03 Oct 2014 14:49:04 GMT

@Anonymous wrote:
I did everything I was told to do - filed police report, got an affidavit from FTC, put the 90-day alert on my credit reports and sending a form to IRS about the situation. I got a relative to help me cover the credit card payments this month, so all's calm now.

Someone mentioned here about filing bankruptcy. I've always heard that's the worst thing you can do to your credit score. But I'm in such a pickle, there's no way I can pay off these cards anytime soon. Let's say I did do bankruptcy as a last resort - does that mean they take all my credit cards completely away from me? If that's the case and I can't get credit because of the bankruptcy, how would I go about rebuilding my credit score? It seems like a win-lose situation. Has anyone gone this route?

all your cards are closed, you will have no credit, but no payments, you may be able to re-establish credit in a few months, but then you will have AF's, and APR's that north of 23% most likely over 30% for low limit cards, and you will most likely be locked out of prime cards for 5 years plus, possibly 7 or 10 years, your existing lenders will black list you for years, some may forgive you after 3 years, but others won't for 7 or even 10 years. Filing bankruptcy isn't cheap, it will be at least a few hundred to have a paralegal file the papers, plus court costs. Figure at least $500... some will let you make payments, for your limited debt problem it could cost you the same as paying the credit cards for 6 months but the credit implications could end up costing you far more in additional costs long term.

My advice is to ride this out, make the minimum payments as best you can, work hard pay it down you will come out of this stronger, and your lenders will forget your problems after 6 months perhaps a year of possitive behavior, if you file bankruptcy they won't forget for 7 or even 10 years.

Re: Things Just Went From Bad To Worse

taxi818 — Fri, 03 Oct 2014 15:07:39 GMT

You mean you can Barstow 140 from friends to post at least minimums. No way I blow them off. Sell or pawn something. I feel ya. But geez.

Re: Things Just Went From Bad To Worse

jsucool76 — Fri, 03 Oct 2014 15:19:32 GMT

Definitely don't declare bk for 3000 in debt. Maybe if it was 300, 000 but 3k isn't worth a bk

Re: Things Just Went From Bad To Worse

baller4life — Fri, 03 Oct 2014 15:27:22 GMT

@jsucool76 wrote:
Definitely don't declare bk for 3000 in debt. Maybe if it was 300, 000 but 3k isn't worth a bk

+1000

Re: Things Just Went From Bad To Worse

Anonymous — Fri, 03 Oct 2014 15:34:04 GMT

@jsucool76 wrote:
Definitely don't declare bk for 3000 in debt. Maybe if it was 300, 000 but 3k isn't worth a bk

Seriously..

I'm about 9k in debt sitting on 0% cards..

It's all relative though....

If i was $140 short it'd make about as much difference as a possum's pecker.

Re: Things Just Went From Bad To Worse

dabrian — Fri, 03 Oct 2014 15:34:19 GMT

It's only 3k. Don't think Bankruptcy is the way to go here.