Dealing with Debt Consolidation

[NJGrandma]

What is the name of your state? New Jersey

To make a long story short, I have two credit cards (both issued by Cross Country Bank) - stupid yes, as I now found out they are charging 29% interest. I fell behind on my payments for about 3 months - due to personal reasons (moving, etc). They then demanded an immediate payment of $400 on each account. I told them I could not do that, and they threatened me with legal action. Not knowing where to turn, I made the mistake of enrolling with Debt Management Consolidation. I began with a monthly payment of $244, the following month I got a call stating they now needed $266 a month, and now they are telling me I need to pay them $300 a month. Meanwhile, I just received a statement from the credit card company showing that they received a $90 payment on one account, and to that they added a $6.00 participation fee, a $50 opening balance adjustment, a $35 late fee and a $35 overlimit fee, plus an additional $118.90 in finance charges. At this rate, I am now further behind than when I started.

Can you suggest any alternatives. Is bankruptcy the only way out of this mess. I am single, a grandmother (still working), but not making a whole lot of money.

Thanks for any help you can give!!

 

[Ladynred]

What you're running into is all too typical of these scam 'debt consolidation/managment/negotiation' companies

The bottom line is, its only going to get worse as long as you stay with them. They are skimming a LOT of money off the top and sending not even the minimum payments to your creditors - hence all the extra fees and finance charges.

You're best bet ? Get OUT of the debt managment scheme, and start by contacting the credit card companies and see if they'll put you on a hardship program. They only last 6 months to a year, and I hear CCB is NASTY to deal with. They've recently just been fined by the Feds for violation of the bankruptcy laws !

Depending on how much you owe, you could wait it out until the accounts charge-off (by now your credit is trashed anyway) and then see if they'd be willing to accept a settlement. They may even accept less BEFORE charge-off. Your other alternative is bankruptcy, especially if there's no hope of catching up on these accounts.

 

[NJGrandma]

Thanks so much for your quick response!

You are most correct in referring to CCB as slime! They went so far as to help themselves to $100 out of my checking account without authorization, since they had the banking account information from previous transactions! I did manage to get that money returned by sending a nasty certified letter to them and informed my bank not to honor any other transactions from them.

My last correspondence with CCB shows one account balance as $4584, and the other as $2435. They then ask for an immediate payment of $268 on one account and $511 on the other. There is no way I can come up with that kind of money. I must admit that back in 1990 I did file for bankruptcy and had my debt erased, and CCB was offering me a chance to rebuild my credit (ha!). What would be the consequences, if any, from filing for bankruptcy again. I cannot go through wage garnishment, as our company is undergoing drastic force adjustments (layoffs), and I could be out of a job at any time. I find that I am robbing Peter to pay Paul, and this is causing me a good deal of undue stress.

Again, thanks so much for your help!

 

[Ladynred]

First, you ARE eligible to file for BK again at this time. The consequences would be the same, basically, as they were the last time, except the attitude towards bankruptcy has changed a LOT in the last 13 years. 1.6 MILLION cases were filed in 2002 !

CCB has been under fire a lot for its questionable practices, so you're going to have to be tough, yet careful. I don't know how readily they sue, which is the dicey part. I'd at least make a try for the hardship program, unless that demand for so much money WAS their hardship program. If that's the case, I'd tell 'me to take a flying leap !

BK for only 2 credit cards would be a lousy way to have to go, espcially since your last bankruptcy only just recently fell off your reports. 6K's not a lot of debt, is there any possibility of getting a loan, at a better rate, to just get RID of CCB ??

 

[NJGrandma]

Thanks again for your quick response! Not sure if that last offer was considered a "hardship" response or not. It only says it is a final offer for "reinstatement" of charging privileges. So I will try giving them a call, and remember to take a blood pressure pill before dialing!!

I too, feel that 2 credit card bills is not a lot of debt, but I'm not seeing any light at the end of this tunnel. As for taking a loan, with my past history, do you really think anyone would loan me this money? I haven't tried, but I didn't think I would stand a chance! I do appreciate your taking the time to answer me, perhaps I will sleep somewhat better tonight! Keep up the good work, I have seen your responses to others!

 

[adevine]

When you talk with the bank, do you talk with whoever answers the phone. I {also a grandma} had this problem a few years back and I asked and had to keep asking for the bankruptcy or hardship department and talked with someone higher up. These people were a lot nicer and set me up on interest free hardship programs. I don't know if the creditors still do this or not. I did tell them, I was trying to avoid bankruptcy, but if I couldn't set up some sort of plan, I would have to.