http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x2818996Oh my.
Yes, yes, yes, it does seem unfair and all that, and rather draconian and unnecessary, but what primitives don't understand is that when one owes money, it's practically "callable" at any time, for any reason..
The solution to this is simply not to borrow money. Period.
If one has to borrow money to live, he's got a problem that money can't cure.
Anyway.
Contrary1 (1000+ posts) Tue Feb-05-08 12:07 AM
Original message
Credit Card Debt --Here's one I had never heard of...until tonight. I apologize for my long explanation.
My daughter and her husband have credit card debt. Until the new payment fee system came up, they were able to make all their payments. Now, they are having a hard time keeping up. Before anyone says anything about them learning to live within their means...they do. They have not used a credit card in over a year. They do not take vacations, go out to eat, or even rent movies. They do have internet, but my daughter tutors online, which more than pays for the monthly fee. Also, they have been applying for part time evening jobs. No luck yet.
Here's what happened...Their minimum monthly payment went up to $200. a month. The last three months they have only been able to pay $150. (Made on time, never late)
Tonight, she gets a call from a collection agency. The account has been turned over to an attorney for collection. She will be served papers at her place of employment on Friday by the Sheriff's if the account is not paid in full. No other warning, that's it.
The balance on the card is roughly $5,200., but they will settle for $4,120, if it is paid before the 8th of this month. They will not accept a cashier's check or money order for this settlement. It must come straight from the checking account. If it is not paid, or paid by any other means, the balance will remain at $5,200., and more fees will be attached for the lawyers, etc...
My daughter is a mess, so I asked her to call the woman she had been talking to, and give her permission to discuss it with me. I was hoping that she had misunderstood. This person was very nice and non-threatening. She told me that when this file landed on her desk, she could not understand why this was being done. So, she talked to her supervisor who told that her more of this same kind of thing was coming.
She explained that the new guidelines required that 4% of the principal was to be paid every month. Since my daughter had missed that more than once, they were calling up the entire debt. I cannot believe this. They are going after the people who are trying to pay, but fall short.
In my conversation with her, I learned a couple other things. For the most part, credit card companies are now not going after the unemployed, or those who don't make any payments at all.
They are concentrating on, in her words "Young people who have mortgages and car payments".
She also told me that California has so many repossessed homes, that there is no way the banks can hope to sell them. The displaced homeless are breaking into boarded up foreclosed upon homes to find shelter. A large percentage of these homes are being trashed, making them worth even less.
Anyway, I have to wonder what is happening here? Granted, she did not pay the "minimum", but there is a long history of paying on time. Are the credit card companies in such dire straits, that they have resorted to this? Are they hoping to cash in on the folks that can't cough up the balance in the 4 days notice that she was given?
We haven't even begun to see the nightmare that is coming.
Yeah, sure, there's a nightmare that's coming.
franksolich was reminding all of his own Democrat, liberal, and primitive friends about this years ago, but no one paid any attention to ol' reactionary franksolich, who doesn't know anything unlike smart liberals.
kirby (620 posts) Tue Feb-05-08 12:13 AM
Response to Original message
3. My understanding...
Is that the minimum monthly payments were so low that if people continued to pay just the minimum their balances would actually increase over time.
Since this was an existing balance and you said they did not use the card for the past 1 year. I wonder if they could 'opt-out'/'cancel' the card which would preserve them under the older rules? I'm not sure if that is possible.
The rule change was really to keep people from paying such a low monthly amount that they are never paying off any principal. Sounds like you daughter was abruptly impacted. I hope it works out for them somehow.
The vaccuum-cleaner primitive is absolutely correct.
This law was made to PROTECT the gullible, the naive, the wastrels, the primitives.
It was for their own good.
twenty4blackbirds (408 posts) Tue Feb-05-08 12:18 AM
Response to Original message
9. my differing view
Hi Contrary1,
I hold a differing view on your daughter's "living within their means":
Before anyone says anything about them learning to live within their means...they do.
...
Granted, she did not pay the "minimum", but there is a long history of paying on time.
To me 'living within their means' means that the credit card is paid off in full each and every time. If there's no money in the bank to pay it, then don't buy it. Otherwise this type of situation comes up when the debt accumulates.
Many financial advisors advise to pay debts first, especially the debts with high interest rates.
I'm sorry about the situation regarding your daughter's financial arrangments. You may want to advise your daughter to live with more limits, and set new habits of "living within their means".
Good luck, and all the best.
The primitives jibber-jabber about credit counseling agencies, mostly negative, and then this:
Le Taz Hot (1000+ posts) Tue Feb-05-08 09:09 AM
Response to Reply #16
43. I have to disagree.
I was involved with one a couple of years ago after my husband's business went down the tubes nd they saved our asses! They worked out a workable pay schedule, WAY lower than what I was paying monthly, they lowered my interest rates from 29.9% to 6% (except Sears who wouldn't cooperate so I NEVER shop there anymore) AND it took a month to set up everything and I didn't have to pay my creditors for that month. Also, anytime one of the cc vermin called me at my home, I'd just give the number of the person I was dealing with and they would never call again. (Unless you've been in a situation where you're TERRIFIED to answer the phone, you've no idea what this is like.)
Granted, one must do their homework VERY well as there are lots of unscrupulous people out there, but not all debt consolidators are equal. If you are drowning in debt, look into this option but, do your homework first.
notmyprez (1000+ posts) Tue Feb-05-08 01:36 AM
Response to Original message
19. That could be a bluff about the sheriff coming to her work.
I believe collection agencies are not allowed to contact people at work according to law. (And it doesn't make sense to me that a sheriff would be involved in a cc debt; "served papers" requiring what?) Of course, that could have been changed, I don't know, but collection agencies often do things they aren't supposed to do because most people don't know what's against the law and the agencies try real hard to scare people into paying. Good luck to your daughter with this whole situation. These companies are disgusting.
sfexpat2000 (1000+ posts) Tue Feb-05-08 07:05 AM
Response to Reply #19
30. It sounds like ham fisted intimidation tactics to me.
No, in most states they are NOT allowed to contact you at work.
I dunno; I think Doug's ex-wife is wrong on this one.
The way I interpret the credit law, a collector is allowed to contact a debtor at work.....until the debtor notifies the collector in writing (in a regular letter, not an e-mail or telephone call) that one is not allowed to receive personal calls at work.
But up until that black-ink-on-white-paper, a collector can call someone at work.
