Robbed From Peter To Pay Paul :(

[AboveWater]

Okay .. I posted a very general question earlier this week in another area of this Credit Card area and received no responses. I'm guessing that's because I was (kind of) all over the place on this topic and don't know really what to ask or expect.

I have had excellent credit for as long as I can remember and am really very sick about the thought of deciding not to pay my credit cards .. beginning this month. Over the past 5-6 months, I have used my Citi card quite a bit to help pay regularly budgeted items, so that I could manage the mortgage payment on my own. My self-employed husband was hurt this past winter and has not been able to work, so consequently could not provide our mortgage payments as he would have normally.

I am looking into loan modification and am getting some help with pulling all that together. But, when you look at my whole financial picture (right now) .. well, it just can't work. So .. I MUST do something about the credit card debt. I have been told, by another .. whose husband was out of work last year, that she did not pay her credit cards for 90 days. The banks would not talk to her about "helping her" until she was denliquent for 90 days. After those 90 days were up, she called her credit card companies and they took all late fee's off and adjusted the interest rates, to make her payments more doable for her. Does anyone know if what I spelled out here is true? Do credit cards operate that way?

My credit cards are:

Citi at 16.99 percent - current balance 15685.36. Last payment was $351.51. I think next statement more, because have used again.
Capital One at 17.99 percent - current balance 4954.39. Last payment was $124.
Chase at 11.24 percent - current balance 1274.46. Last payment $25.00

I am specifically wondering .. what would happen if I did not pay just the Citi card. (The largest balanced card) Someone told me (don't know if it's true?) if I let one go, I might as well let all of them go .. because an up in interest rates will follow on all of them, even if you only let one go delinquent. Is that correct .. does anyone know?

I have consistently received offers to "transfer balances" from all kinds of banks over the past years. I always tear them up and throw them out. Would I come out ahead (if they allow that large of a balance transfer .. I'm guesssing not?) by transferring to one of those cards and paying a "0" interest rate for a year. ..Okay, I guess it would go without saying that I would pull out ahead on that kind of deal .. but what is the real probablility that I would be okayed to do that? Are there any drawbacks connected to doing something like that?

Can anyone here confirm what I've indicated here to be true? Does anyone know if there is anything else I should consider .. in regards to helping to fix the situation I am in now?

Any info you might have to offer would be much appreciated.

Thanks,
AW

[bubberrand]

The basics of what will happen are your credit scores will fall (who cares), and the lender(s) will start harrassing you to make your payments. Eventually, they will charge the debt off, and most likely turn it over to a debt collector. The final act would be to sue you for default on the payments. Now, with that said, you might luck out and be able to work out a settlement instead of lawsuit, but most times the lender wants to see your financials first. Hope that helps. Check out Dave Ramsey, he's good at helping people get out of debt (the old fashion way.)

[despritfreya]

You have $22k in credit card debt. While on the grand scheme of things such is not a lot, what other debt do you have? You said your husband was injured. What about medical bills? What about business related debt? Are you a candidate for a bk? You might want to consult with several bk attnys on this issue. Not saying you should file. Only saying you should educate yourself as to ALL of you options.


Des.

[Cat Damiano]

The basics of what will happen are your credit scores will fall (who cares), and the lender(s) will start harrassing you to make your payments. Eventually, they will charge the debt off, and most likely turn it over to a debt collector. The final act would be to sue you for default on the payments. Now, with that said, you might luck out and be able to work out a settlement instead of lawsuit, but most times the lender wants to see your financials first. Hope that helps. Check out Dave Ramsey, he's good at helping people get out of debt (the old fashion way.)

Just an FYI, this member has not posted in nearly two years.

[bubberrand]

Just an FYI, this member has not posted in nearly two years.

Oops, didn't see it was that old of a post, my bad.

[Cat Damiano]

Oops, didn't see it was that old of a post, my bad.

It isn't your bad, just pointing out that since they hadn't posted in that long, they may not look at the information.

[shaytala]

I'm going to chime in here because I happened to see your post. I've been down the road that you're facing and perhaps my own experience will help you. I was greatly helped by this forum...absolute lifesaver in guiding me through a loan modification which was successful with Chase. I got into trouble due to lost employment and prior to had carried a nice Fico score in the 800's. Because I'm a person of good moral character I just did everything possible to keep paying the credit cards. I reached the point of no return because while I've never abused credit before, I was using the credit cards to survive. When the payments got too large I went to the largest one and explained everything and frankly they had absolutely no mercy--could care less. First they wouldn't talk to me until it was 90 days late. Then they said they needed x payment "the minimum we can accept". Well that minimum was more than I could or would pay. Those words are engrained in my brain!! I reached a decision that day--a hard one--but I gave up my fight to keep my good name with that company. It was a forced decision in that my top priority was to qualify for a loan modification and the payments of all the credit cards would have made my ratios off and thus not get the loan mod. So all 4 of the credit cards were stopped at the same time...never made another payment. I kept one card that had originated about 15 years ago...only had a $2K line of credit and was very manageable. That credit card debt was all sold off to collection agencies. I of course received many calls for a period of time which I never answered.--not one. Got letters from CA's and think I responded to a couple stating "you guys would love me to make even the smallest payment which I won't do". "The original creditor was offered lesser payments when my intent was to honor this debt and repay it--and I was told the payment I wanted to make wasn't enough". "They had their chance and their chance is gone." So every few months I may get a letter from a new CA that has taken over the account. Ignore them all. I'm not the least bit interested in ever trying to settle with them. My loan modification worked out fantastically with a small house payment. Although the bank did not initially forgive any debt on the house (just deferred it) about 6 months after the loan was in place I got a call out of the blue from the lender saying they had indeed now waived debt of about $180,000. By the way I did something I didn't think I could ever do...I rented out 2 bedrooms in my house for additional income I needed to get the loan mod...did this for two years and just took back my whole house in October of last year. So life is pretty good...I use my debit card for purchases...rarely use that little 2K credit card. I'll just wait out these credit card guys until the statute of limitations is up and they will go off my credit. Important that whatever you do.....don't make even $1 of payment as this will restart the clock as to the statute time. My cards were around $40K and I think yours were less. My advice to you......don't even look back on these credit cards......it's not the end of the world! You need to keep your mental health and concentrate on survival and keeping your home. That's first priority. I wish you the very best of luck.

[sysmosafe]

Perfect. I thought that way. Now I am starting renting two bedrooms at my home. it was just started yesterday. This has been the same projection since last year. I truly believe it is the right way to go. Thank you for your post. I figured I was alone now I see that is not the case.

[shaytala]

[QUOTE=sysmosafe;478577]Perfect. I thought that way. Now I am starting renting two bedrooms at my home. it was just started yesterday. This has been the same projection since last year. I truly believe it is the right way to go. Thank you for your post. I figured I was alone now I see that is not the case.[/QUOte
Interestingly...even though I was successful on my loan modification I do have two rental homes in another state that are under water. They are rented and they both have 2nds. Since my credit is trashed and I've ignored the credit cards (ie can't get a loan or refi) it never dawned on me until the past couple of weeks to just stop paying the seconds on those two properties, let them go to writeoff status and then work to reach some agreement with the lenders.

The lenders have received payments faithfully for about 7 years on each house and the loans are interest only (the 2nds). So they've gotten a fair share in my opinion. I'm more than a little ticked at the first lender on one of them because the per cent is 9% and I've never missed a payment with them but they refuse to consider me for a refi. Don't you think common sense would say if I've paid the loan at the higher rate and have a track record...I would probably pay the loan at the lesser rate. Before going down the trail I have the past 3 years...no particular opinion about "lenders".
Now I'll be very honest............have great contempt for them. I'm going to strategically look out for myself and I consider the choices I make strictly business decisions to put "my company" ME in the best shape possible.

Good Luck