Please help - 170K+ in debt

[john416]

Hi everyone,

 

Even though I've just registered today, I've been reading this board religiously for a couple of weeks, so hopefully I won't ask too many stupid questions. I'll try to make this as short as possible.

 

I have tons of credit card debt, most of it unfortunately due to being screwed by business partners - it's a long story, I was the only one who had good credit, so the cards were opened in my name, etc. In the end, they all disappeared and I got left with the debt. Sad story but life goes on.

 

Total is 170K. Largest single account is ~40K, also a couple of 20-30K accounts as well. A lot of small 5K accounts, also. Unfortunately bankruptcy is not an option as my salary is too high. Pretty much all of these accounts are already charged off (very recently) and sold to CA's, whose calls and letters I've so far ignored - I haven't actually heard anything from them in the last 3 months.

 

I think I want to go in direction of disputing the accounts, and trying to get them off my credit report, and if I get sued, then negotiating with CA's and try to settle before cases go to trial. But I have some questions:

 

1) Is it better to start negotiating now, or wait until I actually get sued? I would prefer waiting, but my concern is that interest is growing on this debt. If I wait, will they sue me for the whole amount + interest? Or should I try disputing/validation letters strategy now and try to get these debts erased?

2) Disputing/validation letters: should I be disputing with CA's or CRA's?

3) Am I definitely going to get sued since the amounts are so high? Am I misguided in thinking they might leave me alone if I just ignore them and try to wait until statue of limitations runs out?

4) Similar to that - is the disputing/validation letters strategy even valid for 40K or 30K accounts? Or will they make sure to answer every letter and get all proof, since it's such high amounts?

 

Thank you so much!!!!!

[ICANHASMUNY?]

Sorry, but this sounds' like BK to me for the business.

 

FCRA and FDCPA doesn't apply to business debts.

 

 

and yeah, you're really likely to be sued, with your salary

 

try the BK forum.

[breeze]

What state? Do you own anything - assets like house, property, etc? Was the business incorporated, but you personally guaranteed the debt? I wouldn't do anything until you've mapped out the entire debt, who owns each one (for sure, not a guess). Make a budget if you plan to negotiate, because once you pay one of them the others will be at your door wanting theirs before it's all gone.

 

Since you have a job they will find out eventually. In the meantime, when you post things on here, do not use anything specific. Change everything slightly so that if someone search the internet to see if you were posting anything bout yourself, they would not find you here.

 

Don't send any letters yet. Keep your head down until you figure this out.

[JeffeVerde]

The time to negotiate was while the Original Creditors still had the accounts. Once they go to Charge-off, for the most part, those are on your report for the next 7 years. Now your debts are owned by another group - Junk Debt Buyers (JDB's). From the numbers, it sounds like you've got, maybe 15 CO's?

 

It's pretty much a certainty that the larger accounts will be asking you to join them in court. And there's a good chance even the $5k accounts will sue you (and yes, they'll all be accruing interest). Get your files organized for each account, and put together a spreadsheet. For starters, you'll want to track-- OC, Current Owner, DoFD, CO amount, Current Balance, Last action taken, Next action planned, CRA it's reported on (not all accounts will report to all CRA's).

 

What State do you live in, and when did you default on each account? That will determine how long you're a target for a lawsuit on each account (4, 5, or 6 years, depending on the State).

 

If you've been reading the boards, you should know that burying your head will not improve your situation -- start opening and organizing those letters. But you can put a stop to the phone calls. You do NOT want to file a Cease and Desist at this point, or the JDB's likely response will be to immediately file a lawsuit. Send a letter saying "It is not convenient for me to take phone calls at home or at work. You may mail all communications to me at (your name and address)". Sometimes there's a strategic value to talking to a JDB or CA. But as a rule, you want all communications done via mail, because -

1. JDBs and CA's lie
2. You want a written record
3. JDB's and CA's lie

With the amounts involved, you might want to consider a Consumer Credit Attorney. With the smaller accounts, an aggressive response might be enough to make them go away in search of easier prey. And the larger ones will be more amenable to a pre-trial settlement.

Edited October 27, 2014 by JeffeVerde

[tmkats]

You never know you won't qualify for BK unless you contact an attorney. My wife have low six figure salary (gross) combined and I was able to file BK on my own for all of our debts since they were in our name. Excluding the house and cars it was probably close to $80K.

 

Not as much as yours, but still a lot.

 

Seek legal advice and then take it from there.

[john416]

Thank you all for responses. I am definitely changing some details.

 

1) BK is not an option, unfortunately. I don't want to get more specific, but I consulted with several attorneys and it's definitely not an option in my case.

2) 40K is a business LOC that I PG'd. There are also business credit cards in my name, but all of these appear on my CR so I thought for all intents and purposes they are considered personal?

3) I am in NY and own a house.

 

So the impression I got is usual strategies that I was reading on here - i.e. try to wait until account is resold a few times to different CA's, and then dispute/request validation, won't work because of large amounts. Is that correct? If settling with each one is my only option, that's fine.. I just want it to be over at this point. As you can imagine, this has been really difficult on me and my family. I would like to know though, if settling - does it make sense to wait, or do it now, so the interest won't keep growing?

[BlackKnight1983]

Hi everyone,

 

Even though I've just registered today, I've been reading this board religiously for a couple of weeks, so hopefully I won't ask too many stupid questions. I'll try to make this as short as possible.

 

Everyone's here to help.

 

I have tons of credit card debt, most of it unfortunately due to being screwed by business partners - it's a long story, I was the only one who had good credit, so the cards were opened in my name, etc. In the end, they all disappeared and I got left with the debt. Sad story but life goes on.

 

Sounds to me like this was an old fashion "bust out", they "unlocked" the hidden value in your credit cards and used it for their benefit.

 

Total is 170K. Largest single account is ~40K, also a couple of 20-30K accounts as well. A lot of small 5K accounts, also. Unfortunately bankruptcy is not an option as my salary is too high. Pretty much all of these accounts are already charged off (very recently) and sold to CA's, whose calls and letters I've so far ignored - I haven't actually heard anything from them in the last 3 months.

 

Bankruptcy not an option? Who told you that? You mentioned salary, are you working for someone or self employed?

 

I think I want to go in direction of disputing the accounts, and trying to get them off my credit report, and if I get sued, then negotiating with CA's and try to settle before cases go to trial. But I have some questions:

 

1) Is it better to start negotiating now, or wait until I actually get sued? I would prefer waiting, but my concern is that interest is growing on this debt. If I wait, will they sue me for the whole amount + interest? Or should I try disputing/validation letters strategy now and try to get these debts erased?

 

The sharks are swimming around your boat. Is it better to jump in now, or just throw some blood overboard?

 

2) Disputing/validation letters: should I be disputing with CA's or CRA's?

 

Both eventually, but neither right now.

 

3) Am I definitely going to get sued since the amounts are so high? Am I misguided in thinking they might leave me alone if I just ignore them and try to wait until statue of limitations runs out?

 

Sorry to say this, but yes, you're going to be sued... Probably by everyone (at least everyone that's over a few hundred bucks). The when is the issue. We'll get to that later.

 

4) Similar to that - is the disputing/validation letters strategy even valid for 40K or 30K accounts? Or will they make sure to answer every letter and get all proof, since it's such high amounts?

 

We will come up with a strategy for you, I'll have more time to post later today (I'm a business owner, and I've gone through this already).

 

Thank you so much!!!!!

[nysbadmk8]

You will be sued on a few of these debts, You can wait for it or be proactive.

 

You could start trying to settle the debts.

 

I would be much more concerned with the possible suits to come then your credit score.

[john416]

 

Hi everyone,

 

Even though I've just registered today, I've been reading this board religiously for a couple of weeks, so hopefully I won't ask too many stupid questions. I'll try to make this as short as possible.

 

Everyone's here to help.

 

I have tons of credit card debt, most of it unfortunately due to being screwed by business partners - it's a long story, I was the only one who had good credit, so the cards were opened in my name, etc. In the end, they all disappeared and I got left with the debt. Sad story but life goes on.

 

Sounds to me like this was an old fashion "bust out", they "unlocked" the hidden value in your credit cards and used it for their benefit.

 

Total is 170K. Largest single account is ~40K, also a couple of 20-30K accounts as well. A lot of small 5K accounts, also. Unfortunately bankruptcy is not an option as my salary is too high. Pretty much all of these accounts are already charged off (very recently) and sold to CA's, whose calls and letters I've so far ignored - I haven't actually heard anything from them in the last 3 months.

 

Bankruptcy not an option? Who told you that? You mentioned salary, are you working for someone or self employed?

 

I think I want to go in direction of disputing the accounts, and trying to get them off my credit report, and if I get sued, then negotiating with CA's and try to settle before cases go to trial. But I have some questions:

 

1) Is it better to start negotiating now, or wait until I actually get sued? I would prefer waiting, but my concern is that interest is growing on this debt. If I wait, will they sue me for the whole amount + interest? Or should I try disputing/validation letters strategy now and try to get these debts erased?

 

The sharks are swimming around your boat. Is it better to jump in now, or just throw some blood overboard?

 

2) Disputing/validation letters: should I be disputing with CA's or CRA's?

 

Both eventually, but neither right now.

 

3) Am I definitely going to get sued since the amounts are so high? Am I misguided in thinking they might leave me alone if I just ignore them and try to wait until statue of limitations runs out?

 

Sorry to say this, but yes, you're going to be sued... Probably by everyone (at least everyone that's over a few hundred bucks). The when is the issue. We'll get to that later.

 

4) Similar to that - is the disputing/validation letters strategy even valid for 40K or 30K accounts? Or will they make sure to answer every letter and get all proof, since it's such high amounts?

 

We will come up with a strategy for you, I'll have more time to post later today (I'm a business owner, and I've gone through this already).

 

Thank you so much!!!!!

 

) Yes "unlocking the hidden value in my credit cards" is one way to put it!

 

Definitely appreciate everyone's input. If you think my strategy is completely wrong, I'm open to anything (anything legal, of course). I would obviously prefer to pay as little as possible, but want to put this behind me, or at least to have a concrete plan of doing that and start working towards that.

[BlackKnight1983]

I'm sorry I didn't have much time to spend on this today, but I really do understand what you're going through.

 

I'd like you to read this post, as I think it has a lot of the things in it that I'd like to tell you.

 

http://creditboards.com/forums/index.php?showtopic=534584

 

Since you're most likely going to be dealing with lawsuits I think a lot of the advice I gave (and that was given by others) in that post will be helpful.

[casemodgod]

Absolutely confirm that you personally guaranteed these accounts.

 

Just because they show on your CR does not mean they are yours.

 

I had business credit on my report but I was just an AU for the card and not

a guarantor.

 

So yes, you want to see the signed documents showing your signature on that

spot / checkmark in that box etc.

 

I watched 35k in cc debt disappear once I confirmed I was not a guarantor to the account.

The CA apologized for the misunderstanding after I explained it all to them, and I never

heard anything after that. (yes, the phone worked that time, but stay off it 99.9999/100 times).

 

The ones you did PG on, well, those are amounts that you will be sued for. They won't walk a 40k

judgement, if this was 400, they would laugh it off and ignore you after some letters probably. This one

no way.

[john416]

Thank you all for your help, I really appreciate it!!!

 

I understand that there's no way to not pay anything on these debts, and I'm prepared to settle with the creditors. I guess my main question is do I do this now and "wake the sleeping bears" or wait until I get more threatening letters or sued? I think the general sentiment is the latter, but I'm very worried about compounding interest. I don't want this debt to balloon even higher than it is now, and if I can settle 40K for 50% now (I can borrow from family), instead of settling for 30% of 100K two years from now, I'd rather do that.. but it's still not clear to me what's the best strategy here.

 

Re: PG: Yes, I'm sure I personally guaranteed it, unfortunately. But if a few years pass, wouldn't it be very difficult for CA's that bought it to get my original signature/checkbox? Or since the sum is so high, they'll pull all stops to get it?

 

Also: my credit right now is ~ 600, but it will definitely go down a lot very soon. Should I get some new cards to start rebuilding my credit now, while I still can? I'm only talking about $500 secured ones, or something like that, and not planning to put more than $50 on them a month, and pay in full.

[mizliz1011]

The time to negotiate was while the Original Creditors still had the accounts. Once they go to Charge-off, for the most part, those are on your report for the next 7 years. Now your debts are owned by another group - Junk Debt Buyers (JDB's). From the numbers, it sounds like you've got, maybe 15 CO's?

 

It's pretty much a certainty that the larger accounts will be asking you to join them in court. And there's a good chance even the $5k accounts will sue you (and yes, they'll all be accruing interest). Get your files organized for each account, and put together a spreadsheet. For starters, you'll want to track-- OC, Current Owner, DoFD, CO amount, Current Balance, Last action taken, Next action planned, CRA it's reported on (not all accounts will report to all CRA's).

 

What State do you live in, and when did you default on each account? That will determine how long you're a target for a lawsuit on each account (4, 5, or 6 years, depending on the State).

 

If you've been reading the boards, you should know that burying your head will not improve your situation -- start opening and organizing those letters. But you can put a stop to the phone calls. You do NOT want to file a Cease and Desist at this point, or the JDB's likely response will be to immediately file a lawsuit. Send a letter saying "It is not convenient for me to take phone calls at home or at work. You may mail all communications to me at (your name and address)". Sometimes there's a strategic value to talking to a JDB or CA. But as a rule, you want all communications done via mail, because -

1. JDBs and CA's lie
2. You want a written record
3. JDB's and CA's lie

With the amounts involved, you might want to consider a Consumer Credit Attorney. With the smaller accounts, an aggressive response might be enough to make them go away in search of easier prey. And the larger ones will be more amenable to a pre-trial settlement.

great post.

[mizliz1011]

OP- I have the name and contact info for a great credit attorney I used who is based out of NYC and Westchester. He did a bang up job for me and is well thought of in the credit community. Contact me by PM if you wish. He knows all of the jungle and they fear him as he wins large class action suits. But he is a very nice guy and walks with the angels (but he won't lie on any documents so no stories). He only takes cases where he thinks he is added value. It will take a few weeks to get an appt, $200 consult fee if I remember, and he has been invaluable. and he answers emails .

[BlackKnight1983]

 

Thank you all for your help, I really appreciate it!!!

 

I understand that there's no way to not pay anything on these debts, and I'm prepared to settle with the creditors. I guess my main question is do I do this now and "wake the sleeping bears" or wait until I get more threatening letters or sued? I think the general sentiment is the latter, but I'm very worried about compounding interest. I don't want this debt to balloon even higher than it is now, and if I can settle 40K for 50% now (I can borrow from family), instead of settling for 30% of 100K two years from now, I'd rather do that.. but it's still not clear to me what's the best strategy here.

 

Re: PG: Yes, I'm sure I personally guaranteed it, unfortunately. But if a few years pass, wouldn't it be very difficult for CA's that bought it to get my original signature/checkbox? Or since the sum is so high, they'll pull all stops to get it?

 

Also: my credit right now is ~ 600, but it will definitely go down a lot very soon. Should I get some new cards to start rebuilding my credit now, while I still can? I'm only talking about $500 secured ones, or something like that, and not planning to put more than $50 on them a month, and pay in full.

 

 

I think a lot of this depends on your income. You obviously are NOT judgement proof.

 

The worst thing in my opinion is if all of these creditors came at you at the same time.

 

As for opening cards now? I'm not so sure it would help you. First, secured cards might be garnish-able (not positive on that, someone raised the question in a post recently). Second, any non secured cards will probably be closed on you (adverse action), that's what happened to me.

 

If you are tech savvy, I suggest the Neat Receipts scanner. Scan everything you get, and file it by name of creditor. These debts may change hands a few times. Everything is valuable, even if you don't understand (or see) it's value now. Neat has an online service for $15 a month that will back up your docs. Cool thing about it is I can send a saved doc via my smartphone to anyone (accountant, lawyer, wife) from anywhere at anytime.

 

I worried a lot about the compounding interest with this debt. I think MizLiz can help advise you about how this works. She's been through a lot, and I'm sure she can help you.

Edited October 28, 2014 by BlackKnight1983

[BlackKnight1983]

 

The time to negotiate was while the Original Creditors still had the accounts. Once they go to Charge-off, for the most part, those are on your report for the next 7 years. Now your debts are owned by another group - Junk Debt Buyers (JDB's). From the numbers, it sounds like you've got, maybe 15 CO's?

 

It's pretty much a certainty that the larger accounts will be asking you to join them in court. And there's a good chance even the $5k accounts will sue you (and yes, they'll all be accruing interest). Get your files organized for each account, and put together a spreadsheet. For starters, you'll want to track-- OC, Current Owner, DoFD, CO amount, Current Balance, Last action taken, Next action planned, CRA it's reported on (not all accounts will report to all CRA's).

 

What State do you live in, and when did you default on each account? That will determine how long you're a target for a lawsuit on each account (4, 5, or 6 years, depending on the State).

 

If you've been reading the boards, you should know that burying your head will not improve your situation -- start opening and organizing those letters. But you can put a stop to the phone calls. You do NOT want to file a Cease and Desist at this point, or the JDB's likely response will be to immediately file a lawsuit. Send a letter saying "It is not convenient for me to take phone calls at home or at work. You may mail all communications to me at (your name and address)". Sometimes there's a strategic value to talking to a JDB or CA. But as a rule, you want all communications done via mail, because -

1. JDBs and CA's lie
2. You want a written record
3. JDB's and CA's lie

With the amounts involved, you might want to consider a Consumer Credit Attorney. With the smaller accounts, an aggressive response might be enough to make them go away in search of easier prey. And the larger ones will be more amenable to a pre-trial settlement.

great post.

 

 

Indeed.

 

Let's not forget:

 

4. JDB's and CA's Mis-speak.

5. JDB's and CA's Forget (when it's to their benefit, otherwise they have a perfect memory).

6. JDB's and CA's Cheat and Break Laws (knowing they usually won't get caught).

7. And of course, JDB's and CA's Lie.

[Phreedom]

I wouldn't open any new accounts right now. As Jeff said, the time to negotiate was with the OC but since they've apparently sold the accounts to the bottom feeding bunch, that strategy won't help. I don't know how much they'll be included to negotiate the debt given that you are still inside SOL, likely not much.

As suggested, wait it out and monitor your local courts to make sure a default judgement doesn't slip past you. If they file, your best recourse may be BK.

[BlackKnight1983]

I wouldn't open any new accounts right now. As Jeff said, the time to negotiate was with the OC but since they've apparently sold the accounts to the bottom feeding bunch, that strategy won't help. I don't know how much they'll be included to negotiate the debt given that you are still inside SOL, likely not much.

As suggested, wait it out and monitor your local courts to make sure a default judgement doesn't slip past you. If they file, your best recourse may be BK.

 

Problem is, OP said above that he doesn't qualify for BK due to income.

[Phreedom]

I'm not a BK attorney but I would think he could qualify for a 13?

[BlackKnight1983]

Thank you all for responses. I am definitely changing some details.

 

1) BK is not an option, unfortunately. I don't want to get more specific, but I consulted with several attorneys and it's definitely not an option in my case.

2) 40K is a business LOC that I PG'd. There are also business credit cards in my name, but all of these appear on my CR so I thought for all intents and purposes they are considered personal?

3) I am in NY and own a house.

 

So the impression I got is usual strategies that I was reading on here - i.e. try to wait until account is resold a few times to different CA's, and then dispute/request validation, won't work because of large amounts. Is that correct? If settling with each one is my only option, that's fine.. I just want it to be over at this point. As you can imagine, this has been really difficult on me and my family. I would like to know though, if settling - does it make sense to wait, or do it now, so the interest won't keep growing?

 

 

I'm not a BK attorney but I would think he could qualify for a 13?

 

I would think so as well, but the atty's OP consulted with say no (you would think they's mention it if it was possible)

[Redfoot]

I'm not a BK attorney but I would think he could qualify for a 13?

Perhaps there was a recent one that precludes that.

[goturtlego]

There is no guarantee they will even settle. So be careful if you try and negotiate and admit to the debt. Just because it's a lage sum it doesn't mean they will file immediately. I had a $20k debt that sat since 2009 and they filed suit (and lost) just last year. How long ago were these accounts opened?

 

DO NOT open new accounts. You really want to stay low. They watch your credit reports and see what new lines of credit/loans you're getting and that triggers them to file suit even faster.

 

NO to BK...are you worried about including/giving up assetts or something? A BK really is in your best interest.

[JeffeVerde]

There is no guarantee they will even settle. So be careful if you try and negotiate and admit to the debt. Just because it's a lage sum it doesn't mean they will file immediately. I had a $20k debt that sat since 2009 and they filed suit (and lost) just last year. How long ago were these accounts opened?

 

DO NOT open new accounts. You really want to stay low. They watch your credit reports and see what new lines of credit/loans you're getting and that triggers them to file suit even faster.

 

NO to BK...are you worried about including/giving up assetts or something? A BK really is in your best interest.

Good point, turtle. The CA's subcribe to a "Collection Score" service from the CSR's, that alerts them when there's activity in your file. While your big accounts are already on the radar, the 5k accounts are in a big bin with 10's of thousands of other accounts, and might not float to the top - unless you do something that gets the CA's attention.

[john416]

There is no guarantee they will even settle. So be careful if you try and negotiate and admit to the debt. Just because it's a lage sum it doesn't mean they will file immediately. I had a $20k debt that sat since 2009 and they filed suit (and lost) just last year. How long ago were these accounts opened?

 

DO NOT open new accounts. You really want to stay low. They watch your credit reports and see what new lines of credit/loans you're getting and that triggers them to file suit even faster.

 

NO to BK...are you worried about including/giving up assetts or something? A BK really is in your best interest.

 

I understand BK7 is in my best interest, and believe me, I did everything possible to make it happen. It's just not possible with my income. I consulted with multiple attorneys, and they all say the same thing. I really don't want to provide more details, but they all said the same thing: there's 0 chance in my scenario for me to file BK7. If I lose/quit my job, yes, but I don't want to do that as I need to provide for my family.

 

BK13 is an option, but I don't think it's the best choice for me. I would need to pay ~ 2000/month, (again, consulted with multiple bk attorneys) and I would be shackled for 5 years. If I get a tax refund, a bonus, a raise, quit my job and get a better one, additional income from consulting on the side - I can't do any of that under 13, all that extra income will go towards payment plan. I don't want to be in that situation, I want to actually have incentive to make more money and strive for a better future.

 

So as much as I would've LOVED to declare BK7, it's just not in the cards for me... I need to figure out the optimal strategy to fight this.

[Phreedom]

John, you are in a tough spot. If you sit back and wait to see if/when anyone files suit, they'll be MUCH less inclined to negotiate once that process begins. Then again, they may not file suit but I think the odds are against you.

At this point, the only other option is to negotiate the debts down while dangling the "I may file BK if i can't get this debt down to something I can afford"