Advice on delinquent credit card account...?

Question

Hello. I need some real advice. I just graduated from school about a year ago and like a lot students, I maxed out my card about a year ago. I had problems finding a job for about 3 months so I couldn't pay the monthly minimum. My card from Bank of America was maxed at $5,500. Anyhow, about 4 months later I try to make a payment to find out that my account was frozen and they had sent the account to a collectors agency. By this time the balance rose to about 6,500. So I closed the account because BOA wouldn't let me make a monthly payment. The wanted the full $6,500! I didn't know what to do. So here I am now with creditors harassing me telling me that I owe them $10,000+ !!!! How can they keep charging me interest if the account was closed, I cant use the credit card, and won't even let me make a monthly payment!!??? The creditors told me they can cut it down to $6,500 if I pay in full! I can't do that right now. I' am really trying to get this problem resolved. Help!

Ok, I called them and they are trying to settle for $7,000+ with 3 monthly payments of about $2,300. I told them I'd call them back in 3 days to see if I can come up with it but I don't think I will. Do you guys think I can talk them into spreading the payments out more?

Answer 1

Go to Mexico... Now your name is David Hernandez.

Answer 2

If they want a payment from you, they'll usually work out a payment arrangement but since it's gone to a collection agency, your chances of that aren't good. Like you said, they will expect a high payment than what you can afford. I would suggest calling a bankruptcy lawyer. I'm actuall going through a similar situation and it was in my best interest to completely wipe my debt clean instead of struggling to pay the minimum monthly payment. I owe a little more than you. You could also call a debt consolidation company, they will call the credit card company and negotiate your payments and finance charges down quite a bit. I've also done that, if you have to resort to calling a debt consolidator, you mine as well claim bankruptcy. It's virtually the same thing. I wish I would have claimed bankruptcy instead of calling a consolidator! One thing is for sure, you have to pay someone something, if it goes on for too long, they can and will take you to court and start garnishing your wages!!!!

Good Luck!

Answer 3

Wow. This is why credit cards are a bad deal. I hope you learn from this.

The account was likely sent to an "in-house" collector who actually does work for BOA. If it were my account, I would simply start sending in a payment to BOA. If they cash the check, they should credit it to your account. They can and will continue to charge interest, and maybe late and over-limit fees, so to keep from falling behind even more, be sure your payment is large enough to cover all of this. After you have made a couple of payments, and they can see that you are trying, you may be able to talk them into cutting out the fees, but not the interest.

On the sudden increase from $6,500 to 10k, ask them for an itemized statement of all charges and fees that would have caused this increase. They are likely just trying to scare you into paying them something.

If you do work out a payment plan or settlement, get it in writing. Do not let them "autodraft" your checking account, as they have been known to take more than they are supposed to. Just send them a check every month in the mail.

Good luck with it, and be happy it is so small. I had to pay off nearly $20,000 in credit card debt. I'll never do that again, and I hope you won't, either.

Answer 4

Do you understand that the CAs will hound you night and day and make your life unbearble? Can you imagine the stress you and your fiance will be under with a new baby and constant nagging by creditors who are RELENTLESS in getting money from you? Do you also realize the impact to your credit and how it will affect everything from loans to buying a house and everything in between for the next 7 years? With collection fees and court costs added in, your debt will increase substantially. While I am truly sympathetic to your situation, there is no magic answer here (and you will be getting bombarded by spammers soon offering those "answers" soon). Pay your creditors SOMETHING and pay it all the time. If you have a cell phone, get rid of it. Cable TV, you cant afford it. You are a fulltime student? Well, perhaps that is not a luxury you can enjoy at the moment. Time to grow up and take responsibility for yourself. It's not too late to act now. It's simple. Income minus expense. Your debts are an expense, just like diapers or food. And yes, they can take your assets like your car. If you loaned someone money and they didnt pay it back, wouldnt you do the same thing?? It's business, not personal. If you think this is harsh, then wait until your phone is ringing at 2 in the morning and wakes up you, and the baby. I wish you the best of good luck.

Answer 5

Don't ignore it. See if theyt'll accept a payment plan as the other answerers have suggested.

When I was in grad school, I had a Discover card that I maxed out ($2,000). I didn't make the payments at all, and, after a while, Discover stopped sending me statements. I'm thinking, "Cool...they went away..." Wrong answer. First Discover sold my account to a collections agency. Next, I get a summons (small claims court) in the mail. Yes, they sued me in small claims court. So, I had to hire an attorney and he worked out a payment plan with th collections agency. But, after the attorney and all the finance charges, I paid nearly $6,000 on a debt that was originally only $2,000.

DO NOT IGNORE THIS DEBT.

Answer 6

Collection agencies can, and often do, apply interest to accounts they own. You pay the collection agency now. Tell them how much you can pay a month, and then pay it dilligently, and on schedule. Every couple of months, call them and see if they can offer you a settlement to pay a portion of it, usually in 3 payments or less, to have it taken care of for good. The collector may not like you making small payments, but, by law, they must accept it. Mind you, they can still take you to court and sue you over it, but the payments must still be applied to your account. Unfortunately, you owe the money. They arent "harassing" you, they are asking for the money you legitimately owe them. They have laws they must follow, and anything they do in those parameters is perfectly ok. They can call every day if they want to.

Answer 7

You borrowed the money from them. You haven't paid it back. Interest starts from the time you haven't paid it back. Time is money when you borrow.

You should contact the collection agency immediately. See if you can work out a payment plan that you can stick to. Most places would rather get something than nothing.

As it is this is going to negative effect your credit and you won't be able to get other credit cards or loans easily.

You borrowed the money, you have to pay it back. Most collection agencies will be OK as long as you stick to your payment plan. Just remember that the longer it takes to pay it back, the more you're going to pay back.

Answer 8

A few things you can try...

It sounds like BOA has passed the account onto collections. Once they do that you usually have to deal only with collections. If it's just this one card I would call the company that has your account now and explain the situation. Most will take whatever you can give them or at least let you set up a repayment plan.

Find out for sure from BOA what your options are. I would definitely close this account out - you can always get another credit card down the road if you need one, but if they're treating you badly, then be done with them.

Once you know exactly what the situation is, and who you owe and what you owe, you may be able to contact a bank or credit union locally to get a personal loan or debt consolidation loan to pay this debt off.

Check locally to see if you have any debt counseling offices, they might be able to give you better ideas as to what your options are.

Irregardless, a few pointers from my past experience 1) remain calm when dealing with these people, you will probably want to reach your arm through the phone to strangle them, but don't. People are much easier to deal with if you're trying to be rational with them in a calm voice. 2) Deal with this ASAP, it sounds like you're wanting to clear it up, but don't give up and let it go because it will do BAD BAD things to your credit when you want to buy a car or house down the road.

Answer 9

You'll have to pay it back. Ask if they will settle for 5000 and make monthly payments. They will almost always settle. Just don't ignore this, you need to pay it, and use as a fairly cheap lesson in life. Best of luck.

Answer 10

First of all, tell the collection agency to stop calling you and it is illegal for them to call you after you request that they cease and desist. Secondly call them yourself and ask for a supervisor and make out a payment arrangement. They will gladly accept whatever they can get. Thirdly get a free credit report by applying to the agency directly and get a dispute resolution form and inform them that you are making payment arrangements, otherwise that will screw up your credit for life.
Dont worry, this happens to the best of us, keep your chin up and work out a resolution and keep this in mind next time you want to charge something again.

Answer 11

Contact the collection agency and offer them what you can. If you can muster 50% through a loan, they might bite.