Any suggestions???

I had one credit card. Good credit. Lost job. Consolidated old car loan into credit card and owed $12,000. Placed on hardship plan at $170 a month. Could not manage an exact day per month to pay the $170 and was dropped for beiing late too often. Chase Bank willing to settle for $7000. Did not have it. Fees and interest compiled and they sold to a collection agency. Debt reported at $18,000 now. Collection agency has called as representatives of agency lawyers. I have not returned one call or responded to letters sent to me. I live in Massachusetts.
Does anyone know what my consumer rights may be, if any?
What can the collection agency do to me? What can I expect? Do I have any recourse?
I have only my home with equity left over. However, I cannot possibly pay more per month on a mortgage. I am at 4.6% now and the % rate would only be greater. I have an old car and truck. No toys. I am rather frugal and broke!
Can anyone help?


Loralee Choate said…
Oy, vey. You may want to gather everything up and go to credit restructuring. Unfortuanately, they can only help the most if you have a lot of credit card debt. You also may consider bankruptcy. I had to do the latter due to horrific business partners. It sucked to do but mainly because we didn't own our own home. They can take you to court and get leins on your property and garnish wages. You could also be responsible for court costs if that happens so I would truly act on it now. I understand not returning calls and letters. I've been there, but it ends up hurting you more.

You really need to get some professional advice here.
Michelle said…
in SA the next step would be a summons to appear in court i think, if you don't attend they'll seize an asset to cover the debt (no matter how old it is). or throw you in jail (like we have any room left in THERE!) if you do get a summons-the best thing is to go and plead poverty and hope you get a good judge. maybe. not sure. google for help-there are lots of sites about that! but just don't do nothing....
Tim said…
Well, my home is a protected asset under the Homestead Act. They cannot place a lien upon my home or hope to collect based on my home's worth. Bankruptcy isn't the way to go in this case. They can't garnish my wages because that would be too laughable. My credit rating will suffer but that is something that I'll have to live with.
Its too bad that credit cards won't suspend interest and fees and allow you to pay off a debt at a pace that you can afford. Instead, they raised my actual balance from 10 to 13,000 dollars to $18,000 and then sold off to a collector.
Suspend interest and fees? Ha! That's how these crooks make all of their money. My only suggestion other than bankruptcy is buying a lottery ticket and hope for the best. Good luck...
Anonymous said…
Tim, I'm sorry to hear this - I'm currently paying off debts that accrued much like yours. I too didn't open the letters or answer the phone. You need to take action because this will make you very very very sick. Firstly, in the UK we have a Citizens Advice Bureau. They offer free advice for any problems. I went to see them and they did a fair bit of contacting the bank for me and got them to hold off payments and other good things. There must be something in the US that does this type of thing. Find them and go to see them. Here's what I did.
1. Ignored everything from letters to telephone calls. I just could not handle it. I was too embarrassed to tell friends. I was on my own with this. If you have not told anyone, identify someone you can and tell them. My life would have been much easier.
2. Do not give the bank your mobile phone no. They will use it 30 times a day and at this point there is no safe place for you. If they already have it and are doing this, try to get a cheap second phone on pay as you go. Trust me - this is a big relief being able to use a phone.
3. Eventually they WILL get to speak to you. When they do they will threaten you with all sorts of damnation and terrible things.
4. Tell them your circumstances.
5. Tell them you have no money.
6. Tell them when you expect to get some money. Give yourself a lot of space on the date cos they will call you on that date and if your money is late, you will have to explain yourself all over again.
7. Insist that they cease the interest/fees. Work it right and they will do this. Mine did it for 6 months. **As soon as you have this conversation, send them a letter detailing your monthly income and outgoings to show them how much money you don't have left at the end of it'. Use up every penny.
8. Always remember you have control. They want your money. This is your power.
9. My account still ended up with a debt collection agency (I'm a very poor student that could not find work over the holidays).
10. My debt agency is very friendly. For them, this is a last ditch attempt to get some money from you and they will bend over backwards to do whatever they can to get it. I now deal with someone called Rob and I have his direct line so I don't have to deal with anyone else.
11. Once you have established contact with an individual, get their full name and direct line. Believe it or not, you have formed a relationship with this person so they will be easier to talk to next time you call them or they call you.

Advice for dealing with the banks:
- Be firm with them. They use a lot of bullying tactics and here in the UK there has recently been in the news a lot of bad publicity on banks because their constant hounding was literally driving people to suicide. This is how bad they can get. I used this info to my advantage. One day they caught me on a bad day and this is how the conversation went. I told them VERY firmly that I'd already told them several times I had no money and why did they keep calling me 10, 20, 30 times a day when they already knew that. I told them to call their dogs off and give me a break. They started to argue back about my debt and I interrupted them saying 'Yes, yes yes! I already know about the debt but there's not much I can do about it if I have NO MONEY.' The conversation ended with them at a dead end and saying they'd make a note on file and then hanging up. I didn't get a call for fortnight.

When they ask if there is someone you can borrow the money from tell them you already are doing to subsidise your daily living costs.

Absolutely under no circumstances take out any more credit cards or loans - I haven't done this but when I looked around the rates were stupendously high. Don't even go there.

If you absolutely can't imagine doing any of this because of your fear, get drunk, really drunk, open the letters just to get the telephone number of the collection department, not to read their threats and call them up when you are drunk. Tell them this is currently the only way you are able to deal with them. Tell them you are a wreck and want to get it sorted. If you do this, you only have one shot so make sure while on the phone, you arrange a good repayment plan THAT SUITS YOU, you get their telephone no., address, your account no. everything.
My friend did this years ago and she came away very happy and relieved at the end of the call.

Alternatively, call them up (sober) answer all the security questions and tell them you are going to hand them over to a friend who will handle the call for you. They will do this if you tell them. If they argue saying they cant do that for security, tell them you have depression/on meds and that you are not fit to take the call but you want resolution and that they have your permission to talk to your friend. Make sure you brief your friend very well about how much you can afford and not to go over it.

The road is long and the debt is a mountain, but at the end of the day all the bank wants is their money and communication.

The best advice is stay calm, keep your health and be firm in your dealings. Send them letters about your circumstances and seek advice and help from friends and advisory agencies.

Good Luck, Tim - I really do hope you get this sorted. Just remember that it will eventually be gone.
Mystic Wing said…
Hard as it sounds, I might be tempted to give up the house in order to get debt free, and take a small apartment to make ends meet. This could be pretty hard, especially if it is a family home, but then again, a house is a pretty big burden.

I don't know the amount of your mortgage payment, or your income, but it seems to me that I've heard that Mass. is pretty good when it comes to hardship assistance. In MInnesota, anyway, my brother qualified for decent welfare assistance when he fell on hard times.

For most of this, it would be a blow to the pride. On the other hand, I'm guessing you paid plenty of taxes to Mass. over the years. Is it so unreasonable that you should be assisted now that you're in difficulty?
Nicholodeon said…
I went through this back in the 1980s. I used to answer the phone in Spanish...or answer it and say, "Hello? Hello? Is anyone there? I can't hear you...(repeat) I will have to hang up." Then when it rang again I let it go thru to the ans machine.

This was in Calif. In those days the advice was to take the calls or return the calls. But I agree with other readers...get some professional help with this. And to cut expenses, buy rotgut scotch instead of those high-end single malts you enjoy so much!