Credit Card Debt
Credit Card Debt questions and answers
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Q: Who would like to pay off my credit card debt for me?
Kidding.. but if anyone does have extra cash..I'd be grateful for the offer. Actually, I'd like to know advice on the best way to pay off credit card debt. I have about 10,000 in credit debt. Mostly from going through a divorce a few years ago.
A: I'm going to check your answers because I need the same help!! GOOD LUCK!
Q: I'm being sued, I have the money to pay off a credit card debt, who should I make the payment to?
A relative is going to loan me the money I need to pay off my credit debt. I'm suppose to file my appearance in court on Tues.
Should I call and make arrangements to send the payment in to the credit card company or the collection agency?
Do you think they will dismiss the lawsuit?
A: You have to make the payment agreement with the one that is suing you.
You should offer a percentage of the debt. You should stipulate in the agreement - if they agree to take a percentage, after payment, they will agree that the debt is paid and no longer collectable.
Be sure to have the agreement in writing!!!
Be sure that when you come to an agreement and when you pay that both the agreement and the payment is filed in the case file !!!
Q: What does default on credit card debt mean? do i still get charged intrest & extras in default of payments?
Sometimes i get letters from credit card debt angencies saying i owe the same balance that i had for 6 years, but sometimes shows more balance with intrestest but only one letter said this, the rest all had same balances which were 6 years ago when i was in debt of £2,000, but one letter said £6,000, i have not replied or ever gotten back to the debt credit card collectors, agencies etc, so whats going on, does default mean no intrest charges?
A: Like I've already told you, you just wait until they finally catch up with you and you're in for the surprise of your life! "Interest" won't come into it ! ! !
Q: Who is responsible for credit card debt if somebody dies? Or does the company eat it?
Say somebody has X amount of credit card debt, then they die but still have that debt to the credit card company outstanding, what happens? Does the company have to write it off as bad debt or ? Perhaps the company can hit up that person's estate. But let me pose another question then - what if that person's estate does not have enough money to cover that credit card debt.
A: The person's estate or surviving spouse, otherwise, they have to eat it.
Most credit agencies have a life insurance policy on their lenders now and don't persue the matter if you send a copy of the death certificate in to them.
Q: How do credit card debt councilors work with credit card issuers?
I've seen on t.v. how credit card debt councilors work with banks when people owe a lot of money on their credit cards. They say they can not only reduce the amount owed but also get your monthly payments down to where they are manageable. How do they do this, are there any consequences such as a reduction of credit score, and is it effective (do they really do this or is it a scam)? Also, how much do they charge? Thanks.
A: Unfortunately the ones who advertise on television are usually in it just for the money. Beware of any organization that requires an up-front fee.
If you belong to a credit union or there's one that serves your office, they will be able to put you in touch with a reliable organization.
Here's a booklet that will help you:
http://www.consumerlaw.org/initiatives/credit_counseling/content/Cconsumerfactscreditcounselin.pdf
Q: Is the SOL on credit card debt determined by the state you currently live in or where the debt originated?
Is the Statute of Limitations on credit card debt, determined by the state you currently live in or where the debt originated?
I have a debt that I stopped paying on in Jan 2002. I acquired the debt while living in Texas and stopped paying it while living in Texas. My husband is military so we have lived in Missouri for the past 4 years.
The SOL for TX is 4 years for open accounts (credit cards) and for MO it is 5 years. Either way, the SOL has run out on this debt, however I am still wondering which would apply to us since we are military? We claim TX as our home/residence.
Thanks!
This debt was sold to a debt collector years ago.
I have known others that have written cease and desist letters so I am not so sure that SOL on card debt is a "myth".
A: The collecting SOL on a credit card is not a myth.
Generally you would go by the state where you have set up residence - employment, utility bills, pay taxes, etc.
Though the creditor/collection agency can actually chose which state they want to file a suit in, if they chose to file.
Since you are out of the collecting SOL in both states, send a SOL letter that includes the fact you are out of the collecting SOL for "both" states.
You might go to the following link and read the SOL letter that is listed.
http://whychat.5u.com/nottoca.html
You can also scroll down to the bottom of that page and click on the home page.
Once on the home page, scroll down to near the bottom where the states are listed.
Click on both states. The statutes you would need for the SOL letter will be listed.
edit+++++
Anonymous -
As for that link you posted, I think Studly gave an excellent example by listing the FCRA statutes of the reporting SOL.
I really don't understand why you posted that link to begin with when the facts of the reporting SOL were posted in there.
As for the "proof" of collecting SOL for you (and for the OP)
If you would take the time to read the state statutes for both Texas and Missouri, you would see for yourself that there is indeed a collecting SOL, as there is in "every" state.
Texas statutes for the collecting SOL and the statutes to prohibit the re-aging of the collecting SOL
§ 16.004. Four-Year Limitations Period
(a) A person must bring suit on the following actions not later than four years after the day the cause of action accrues:
§ 16.065. Acknowledgment of Claim An acknowledgment of the justness of a claim that appears to be barred by limitations is not admissible in evidence to defeat the law of limitations if made after the time that the claim is due unless the acknowledgment is in writing and is signed by the party to be charged.
Missouri
§516.120. Within five years
And the statute that places credit cards in a 4 or 5 year SOL (the 4 year SOL would be the UCC. If the card is a store card claiming the UCC statutes is possible)
432.045: 2,3.
Anonymous, I don't want to get into a gripe match with you on this and I was not the one who gave you the negative vote. If I had, I wouldn't have seen your edit.
Q: Can credit card debt transfer to your children after your death?
An older family member of mine has a large amount of credit card debt and their only major asset is the house that they currently live in. From what I've read it seems that creditors will liquidate all of their assets including the house in order to try and cover the debt upon their death.
One of their children wants to purchase the house or assume the mortgage from them now and become the new owner. If the house is sold/transferred in this manner and no longer belongs to my older family member with the large debt, will creditors try to come after her child upon her death?
The house is located in Florida.
A: They better transfer the house before the death of this individual because you are right they will come after the estate of the deceased.
If the child purchases the house from them the seller needs to keep the money out of the banking system otherwise that money would now be the asset. But I'm sure you already know that.
Once the person is deceased the only thing the child needs to do is open the letters send a copy of the death cert. (it doesn't have to be certified unless they contact them and ask for one) and also include a note that says Deceased has no estate.
I've never after 2 1/2 yrs had any of my father in laws creditors write me again.
Q: Add credit card debt amount to new home purchase?
I have about 25K in credit card debt. I am planning to buy a 540K house. Currently I have great credit, is it possible to add my credit card debt into the home loan in order to make it a single monthly payment. What is the loan program called? I am shooting for 5 yr. ARM. Me and my wife plan to live there for about 3-4 yrs.
To add I mean to pay off my credit cards with the home loan.
A: I doubt there is a loan program around right now that will lend over 100% of the homes value on a home purchase. You can sometimes get them on refi's but they are usually loans that are attached to some type of construction or major improvements.
Value is determined two ways:
In a purchase, the Purchase price or the appraised value- whichever is LESS.
In a refinance- the appraised value.
If this is new construction, the home is probably worth alot more now than when you purchased it. You should have a lot of equity.
Right now, prices are not going up as much as they were, so if this is existing construction, you may have to wait a few months until you have enough equity to pay off the debt.
If you have cash in the bank, try to pay off that debt and get a second mortgage instead of putting that additional money as a down payment.
You can also wait until you close your loan and refinance with a second mortgage paying off your debt- provided there is enough equity in the house.
Sorry to burst your bubble, but let me show you from a lenders perspective.
You have $25,000 in Credit Cards and the average interest rate is probably 15% or greater. You are buying a house that the value is $540K, you want them to lend you $565K for a house they know is only worth $540- at an interest rate of about 6%- less than half of what you are paying on the credit cards now.
If you were to default on the loan, you get to take all the furniture, clothes, handbags, etc that you paid for using the credit cards, however they can only reposess the home that is worth $540K. If they sell it at auction for the full price of $540 (which is doubtful) they would be at a loss after the Realtor takes the standartd 6% commission (approx $32K). That leaves the bank with getting $508K for the house at best, before fees.
This is obviously not a favorable investment for them.
Q: How do I go about consolidating my credit card debt?
I have a good credit score, last time I checked about 6 months ago it was about 720-730. Recently I have acquired a big credit card debt, about $9,000 on one credit card (with a limit of $10,000) and about $3,000 on another one (with a limit of $5,000) for many different personal reasons. After the whole spending money ordeal was over, I was left with all this debt on my credit cards. Since then, I have cut back on all unnecessary spending, besides the obvious things like food, gas, etc. I have never been late on payments and have never been over the credit limit. I Also try to pay an extra hundred bucks on top of the minimum payment due when I can. Are there any good ideas on how to consolidate these two credit card debts and help me out with all this? Thanks!
A: First of all, consolidating the debts wont really change anything. In fact may adversely affect your credit score.
You need to do the following:
1. Evaluate you interest rates. If you are paying more than 12%, then think about finding a new credit source to consolidate. With your credit score you are probably getting teaser rate offers in the mail. (Beware of a teaser rate that rests after 6 months, as what you save wont be that much) Look for a credit card that will allow you transfer the balances for a long period at a low rate. Many cards offer rates of 5.99 or less for up to 2 years, but also check if there is a transfer fee. This can be as much as 4%)
2. If you find a good card and rate to transfer, then transfer as much as you can from the higher of the two rates you currently have. If you able to transfer all of 3000 debt, do not cancel that card. (Just make sure you dont use it) Having a zero balance and available credit actually improves your credit score.
3. Make a plan. Figure out how long it will take to pay off each card by taking the minimum payment amount (principal only, not interest) and divide into the amount owed. Lets say on the 10,000 card the principal payment is $277, that means it will take 3 years to pay off that card.
4. If both cards have the same rate of interest, but different pyoff dates, put all your extra monthly payment towards the card with the highest % to the credit line (in this case the 9,000 card as that is at 90% of your limit, vs the 3,000 which is at 60% of your limit). The lower the % owed the better for your credit score.
Finally, do not use the cards. Pay cash for everything. (This is very important if you end up consolidating to a lower interest card. Those cards will apply all of your payments to the low interest balance first, and start accruing a high rate on the new purchases. that will go on until the original amount is paid off).
Q: What is the best way to payoff my credit card debt?
I currently have around 10,000.00 dollars of credit card debt on three different cards. I am paying 29.99% on two of them, and 22.99% on the other one.
I have tried to get a card with a better rate to transfer my balances to, but the issuers won't give me one because I am using so much of my available credit now. I have not had any late payments on my credit accounts, tho.
Should I try to get a home equity loan to pay off the cards, or is that a bad idea, too?
I know that I got myself in this situation, and I am wholly responsible. I do not feel right about declaring bankruptcy, but really want to get out of debt somehow.
If I am unable to get a lower rate, then I don't see a way to rid myself of the debt. Any advice?
A: I used to work for a large credit card issuing bank, so I feel I can offer some advice.
Bankruptcy is not an option for you- unless you are unable to work hard to repay your obligation. If you are capable of working a decent paying job, you will regret bankruptcy for the next 7 years or longer. That's probably a lot longer than it would take if you sucked up some tough months and paid your bills.
It's not likely for you to obtain a credit card with a lower interest rate- at least not one which can accomodate your total debt. You don't indicate what your credit history is, nor do you indicate your credit score.
However, there is something not quite right because you indicate you're paying 22 percent on your cards. Incedentally, 29.99 percent falls into usury in most states- in other words, you're paying more interest than the value of the loan. That's considered illegal and the creditor cannot pursue collection of debt from you.
Some states allow the market to dictate the usury limit, but again, most states do not allow above 24 percent.
In any regard, there must be something sketchy about your payment or credit history if you're paying more than 8-12 percent for credit card debt.
The best two options would be a home equity loan- you can usually get a much lower rate- but consider this- are you looking to make any improvements or possibly move over the next few years?
Also, look into a consolidation loan from your bank. It's not debt management, so it won't appear on your credit report as such. Debt management companies negotiate with your creditors to accept lower payments in an effort to pay your obligation. Good for your wallet, bad for your credit score.
A consolidation loan will pay your creditors in full while you make payments to your bank. Your bank will most likey ask you to close your accouts, which is good because you won't generate further interest, and your accounts will show as "paid in full as agreed". It will also cut off any temptation you may have to use your cards as credit becomes available, since they'll be closed.
Once you pay off the debt, you're in the clear to re-apply for new cards, and you will be in better position for new rates.
Make certain to ask if you pay more than the monthly amount whether it goes to principal or to interest. If it goes to principal, pay as much as you can above minimum each month. You're going to have to suck it up and grow up a little- live frugally and poor.
I also suggest not opening more than one card. A good rule of thumb is to live below your means, that is if you plan on saving for the future. If you can't pay in cash, (a house or a car being two exceptions) you don't need it right now.
The advantage of a consolidation loan over a home equity loan is that you're not using the equity (or your home) as collateral.
Good luck.
Q: Can you include credit card debt in a bankruptcy?
I have a friend in FL that is filing bankruptcy. I thought they passes a law a few years ago that stated you could not include credit card debt in bk. Is that true? They are telling me that you can include credit card debt.
A: All consumer debts can be included in a bankruptcy. It's just a lot harder to file chapter 7 now.
First you have to go through 6-months of credit counseling and then take whats called a means test to determine weather you file chapter 13 or 7.
If you make over the average annual income for your State, you are forced into a chapter 13.
Q: Credit card debt and 1099c forms. Once you file taxes will your credit card debt with company be gone?
I recieved a 1099c form from a credit card company for a settled credit card debt. The amount is for $10,000. I only make $31,000 per year. Will I end up owing on taxes due to being in a different tax bracket?Will the debt finally be gone?
A: Yes, you owe taxes on the $10,000 settled debt. What the government means that you had a windfall by not paying the $10,000 settled debt.
Q: How do you consolidate credit card debt if you do not own a home?
I owe about $12,000 in credit card debt and I wanted to make that my year's goal to pay it off, but a lot of the websites I find require that you own a home, or charge a huge interest for someone to "negotiate" with your creditors to bring down interest. Does anyone know of a good resource where I can just consolidate the debt and make one reasonable payment?
A: You can go to a bank for a signature loan. Enough to pay one or two cards. By taking out the loan you may pay 12% interest; and retire a credit card at 23% interest. Make the payoff of your loan over 3 years and place the extra monthly cash against another card, the highest interest payment.
OR Pay the minimum on all your credit cards and the balance into savings. Look for a house, when you find a place you can afford to buy YOUR RENT MONEY WILL WORK FOR YOU. The purpose is credit control not the "castle of your dreams".
Q: How do I consolidate my credit card debt?
My wonderful , but obviously money happy boyfriend has accumulated around $13k in credit card debt. He has 4-5 credit cards, one with a balance of $7k. He does not own a house. We tried the bank where he has his truck loan through, but he cannot get a loan because he has no collateral. What can he do now? We want to start moving in the direction of marriage and a family, but not with this looming over us. What is the best way to resolve this issue?
A: Best thing to do is to ask your existing card holders to consolidate the others. I did this once with Discover and they swallowed all the other credit balances and lowered the rate. You can then concentrate on paying aggressively on that one card and get the balance paid off more quickly.
This technique works only if you are lowering your rate AND continuing to make the same total payment. That way you pay down the principal more quickly.
Q: What is the best solution for credit card debt?
What is the best solution for credit card debt?
I am way in over my head, I have 6 credit cards and I'm over $40,000 in debt. I have tried to take out a loan at the bank to consolidate but i got turned down. I need HELP!
A: You have heard it before. Pay minimum on all your cards. Take the smallest amount you ouh on one and double or triple the payment. When it is payed off cancel that credit card. Then take on the next in line. Put the money you were paying on the one you just paid off and apply it plus the payment you were making on that card. The hard part is the first card, after that it begins to gain speed. The main thing is not to use the cards any more, leave them at home. If you do not have them you can not use them. And to cancel them as soon as you make that last payment.