Need Help - Can't Pay 1st Financial Card - Won't accept settlement.

[thebear22]

Hi, was hoping someone might be able to give some advice on what to do with a 1st Financial Bank credit card we have open that we can no longer pay.  Due to job issues and medical issues, we ran up 14k on the card, which has a 30% interest rate.

I've been scratching and clawing to make the minimum payment (which is basically all interest at this point), but I just can't do it anymore.  I do have one open option, which is to take out a 401k loan, but I can only pull 7k.  We called them early today (we've always paid on time, but payment is due in a few days) and asked them if they would be willing to reach a settlement agreement for that amount.  However, they wouldn't accept anything less than the full balance and only offered to take off a 37.00 fee from the 14k.

So my question is, do I just stop paying it and wait for them to offer a settlement?  If so, can they sue me and take my house or anything like that?  How long can they keep charging late fees/over limit fees?

I regret that is has come to this, I want to pay them back, but at 30%, it's just killing me financially long term.  I have exhausted all budget options or other sources of cash, and I'm out of ideas on what to do.  The people on this site have been great to me before, I'm hoping someone might be able to give some advice on what to do.

Thanks!

[Anonymous]

Have you gotten it escalated to someone higher than the CSR that picks up the phone or their immediate manager?

[thebear22]

Yes, they transferred us to the collections department and said they were the manager of that department.

[Meanmchine]

"Back in the day" you were able to request a "special arrangement" where banks would re-negotiate your apr and min payment for a short period of time.

I dont know if that is still an option these days.  Maybe a ccc intervention is something to explore

[DrZoidberg]

Why don't you open a Citi Simplicity card or a Slate for 0%. Or do a personal loan for 8-10%. Sounds like you want to have the debt forgiven instead of re-structuring.

[creditguy]

Don't really know what options you have with this bank because every bank is different, I am sure they must have some type of program to offer people some type of relief during rough times, after all it's in their best interest to if they want repayment instead of a charge off.

Of course there is no guarantee they will help or what the terms may be, I've seen banks talk to you once you've fallen behind on payments but not before that because the late payments demonstrate you are indeed in some financial hardship. Other than applying for some balance transfer cards or a personal loan I don't see what options you have otherwise.

If you do let the debt go in hopes of receiving a debt settlement, keep in mind they may never offer a settlement offer and decide to sue you to recoup their money. Once they obtain a judgment against you they cant just take your house, and would likely never even try to, they could however garnish your wages and or seize your bank accounts and this all varies state by state. A lien could possibly be placed on your home but it can't be taken away. Ultimately bankruptcy may be an option if you really hit rock bottom, but try everything possible before considering that, I know your in a tough spot and you certainly aren't the first person to be in this situation nor the last, there will eventually be some light at the end of the tunnel, best of luck to you.

[StartingOver10]

I don't know about this specific bank, but most have a "hardship" department that is not the collections department AFAIK. 

You do have to get through the first layers of CSR's and that can be a feat unto itself, but the hardship department usually works outs reduced interest payment and reduced payments for X months. It varies, but I remember 6 months and then having to go through the process again at 6 months. The idea is to get you on your feet and then get back to normal. Naturally, the card is closed to future purchases but the interest rate is substantially reduced so you actually make headway. 

Try again to get to that department. 

If that doesn't work - you may have to just cut that card loose (shut it down - stop payments).

Is this your only debt? Or are the medical bills mounting and other debt looming?

This would be the time to sit down and prepare a budget to see if you need to file Bk or just work on that one debt.  

[Appleman]

I agree on at least looking into a BK and seeing if you can get a reset. You need legal advice that you will have to pay for unfortunately.

I am pulling for you job wise and medically and hope things turn around. You have made a strong effort to do the right thing but I fear it will be difficulty to make any progress on a 30% loan. 

[Anonymous]

One other option is to talk to someone from NFCC.  They offer low- and no- cost for credit counseling.  They would be able to help you with the numbers and see if BK is a good option or not, or maybe have better leverage negotiating with the bank.

And it's totally loony but I have heard most banks won't work with you until you're already behind.  I'm really sorry for your situation, I can relate from usury payday loans from years ago, I wish I had known then about options.