I am a regular poster on this site, but I decided to post this under a different user name for privacy.

My doorbell rang this evening and I answered it. Turns out, I got a Summons from the Oklahoma County court clerk. It said I am being sued by a local collection attorney for an unpaid credit card debt and have 20 days to mail an answer to the court clerk and the attorney's office. The debt is around $7000 and I am being sued for that, interest, costs, and attorney's fees.

I (stupidly) on a credit card accrued the debt over the course of our wedding and subsequent honeymoon 3 years ago. Now I have a new little boy and a stay-at-home wife, leaving me as the primary bread-winner making in the neighborhood of $2000/month. I have other various debts and student loans.

A couple of months ago, I decided to follow the advice of a book by Dave Ramsey and get out of debt. I have cut my expenses and sold stuff to pay down my financial obligations...then this happens. So frustrating!

I'm a law-abiding citizen and don't ever find myself in such trouble so this summons was quite distrubing to me. In my mind, these are my options:

File bankruptcy.
Pros: My credit score is sub-600 already, how much more can I hurt it?
Cons: The bulk of my debt is federal student loans that cannot be discharged.

Try and fight it myself.
Pros: Per the Fair Debt Collection Practices Act the collector is required to provide me with debt validation if I request it in writing within 30 days of the receipt of their letter. http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf I sent this certified return receipt and never received validation. I have the paperwork to prove it.
Cons: Representing yourself nearly always ends in distaster.

Hire an attorney.
Pros: They know what they are doing.
Cons: It will be cheaper to just pay the judgement.

Just accept the wage garnishment mentioned in the summons.
Pros: They can't get very much out of me.
Cons: Losing 25% of my income will devastate our finances and halt debt reduction.


Any advice will be more than welcome. Thanks.

as per your post, you seem to acknowledge the validity of the debt... therefore it shouldn't be difficult for the collector to provide such validation. failure to follow fdcpa could get a collections agency into trouble, but i doubt that it will invalidate the debt itself.

imo, that removes 'fight it myself' and 'hire an attorney to fight it' from the list of good choices... if you really incurred these charge, then you owe this money.

so, to me... that leaves 'file bankruptcy' and 'accept garnishment' as your choices.

you state that $7000 is the ballpark of what you owe... what is the sum total that you are being sued for? what will be the total amount garnished from your earnings?

if you go with bankruptcy, your credit score will eventually improve. unless you want to buy a house within a couple of years, it can't hurt you that badly. sure, you'll still have to repay student loans but you won't have your wages garnished.

if maintaining credit is somewhat important, try negotiating the debt. collection agencies know that if you file bankruptcy they get nothing. they're probably high-balling the tacked on fees, etc. and will probably settle for a lower amount.

-M

If you've really read Ramsey's book(s) then you should already know your answer.

1.) File bankruptcy - I can't believe MMM said "it can't hurt you that badly" - YES, it can. And, it is a sign of your character.

2.) Hire an Attorney - If you can afford an attorney to fight a debt you admit you incurred then man up and pay your debt. Doesn't matter how good your attorney is, the judge is going to know you're a dead beat.

3.) Accept the garnishment - As with the previous two options, this is another sign of your character. Of the three, this is the only acceptable option.

This being said, I know how collections work and I guarantee you they have been calling for months if not years and sending letters of collection. All of which you obviously ignored.

$7,000 is not that much money. In the very beginning you should have told them your situation and tried to work out a payment plan.

However, if they are suing you and it is a credit card company, then obviously you stopped paying the debt all together as opposed to paying the minimum.

No matter how you slice it you're a dead beat and a good example of why the economy is where it is.

I know I'll get beat up for telling it like it is, but you gladly took the credit card, gladly piled on debt, stop making any payment whatsoever, refused to man up and try to work something out and now you have to pay the price.

Next time you read a Ramsey book, ACTUALLY READ IT.

I'd call the attorney for the collection agency (if possible) and beg for a payment plan to avoid all the court mess. Then take any extra odd job you can find, sell your garbage on Craigslist, and start delivering pizzas and selling blood on the side.

i came back to add one point... don't pay a dime until you get the validation.

-M

i came back to add one point... don't pay a dime until you get the validation.

Didn't he validate it when he admitted to racking up the debt?

I'm with BailJumper, why do so many people look for a way out of their responsibilities?

Actually, I think you only have so many days after you've been put on notice of the debt owed to request validation. If they put you on notice months ago then I think that option is mute.

I've never considered bankruptcy so I don't really know what the long term ramifications are. Personally, I'd be so ashamed to file over some stupid credit card debt that I'd look for any way out other than filing.

I also agree that fighting it in court is almost laughable. I'd imagine the debtor will go over each and every frivolous item you bought and it will only anger the court. When its over you'll still owe the collection agency, and they will be awarded court costs, attorney fees and you'll have to pay your lawyer.

I don't really think you have the option to accept or not accept a garnishment. It will either be issued or not. I guess you could quit your job, but then they will just follow you to the next one.

BJ's idea of calling them sounds good, but I doubt they will be willing to negotiate at this late hour.

Personally, you've missed your window of opportunity. I'd see about borrowing the money from relatives and working out a payment plan with them. Though keep in mind that loans can often cause lots of problems in a family.

My only thinking in getting a loan from a friend/family is that many employers hate garnishment orders. They are a pain for the bookkeeper and can lead to office gossip and a bias from your employer.

Debt is no fun (been there, done that), but you really should own up to it, turn the corner and never go back. Good Luck!

Speaking as someone has played the bankruptcy game... you should only do it only if you have no way of working out a reasonable payment plan.

Bankruptcy is not the easy as pie option it use to be. The majority of debtors are placed in Chapter 13 these days. Chapter 13 means you pay all of your debts off on a wage earner plan that is set according to your level of income. Not to mention you will have attorneys fees to pay and the Chapter 13 monthly payment maybe $500 a month. During that time you cannot open any credit lines and all open credit accounts will be closed. Which may create a financial emergency if you do not have any savings.

Your best option is to call the collection agency and work something out. Simply because chances are more than likely court and/or bankruptcy is going to cost you more than the debt.

Another option you may explore is talking to a family member about borrowing the money.

Personally I would look at selling some stuff and maybe picking up a second job or your wife could pick something part time during your off hours. A 20 hour week job will pay that bill off in just a few months.

didn't he validate it when he admitted to racking up the debt?

not in a legal sense, no. under fdcpa, any collection agency must present proof that the debt is real and collectible to any person they are trying to collect from. many collections agencies attempt to collect on debt that is otherwise 'uncollectible', that is, debt that has already been cleared through bankruptcy, debt that has been settled, debt that has passed the time window of collectibility. this is why an individual is within their rights to demand proof from a collections agency.


i'm with bailjumper, why do so many people look for a way out of their responsibilities?

while i tend to agree, the op came here asking for advice rather than the ethics of repaying the debt. if the op has no realistic way of repaying this debt, then bankruptcy is a legal, realistic option. i do agree with oneforone in that bankruptcy should be a last ditch effort... if anything can be done to repay the debt, then that is probably the better choice in the long-term.


actually, i think you only have so many days after you've been put on notice of the debt owed to request validation.

i'm unaware of that requirement. i believe that the fdcpa requires a collection agency to report the validity of any debt that they are trying to collect upon request.


i doubt they will be willing to negotiate at this late hour.
completely untrue. a collection agency makes money by actually receiving payment... they receive a percentage of any successful collection. therefore, they are pretty much always willing to cut a deal.

-M

File bankruptcy - I can't believe MMM said "it can't hurt you that badly" - YES, it can. And, it is a sign of your character.

At this point, I don't think anyone needs a lecture about their character, we've all made mistakes at some point or another.

I hesitate to dispense advice but I do think that your Credit is already shot with this collection.

So, bankrupty at this point wouldn't be the worst thing to happen to you.

For someone going through this in the future, call the credit card companies before you get to this point and try to arrange payment.

Something to keep in mind for your employment.

I have to garnish employees occasionally and it's a pain, and I hate to have to do all the extra work because this guy couldn't pay what he was supposed to pay on his own ( so now I have to go get documents notarized, do the deductions and personally write out a check for this guy!) That takes time and increases my payroll labor and it doesn't make me a happy camper.

One other thing... You maybe able to settle this debt if it is a collection agency that is suing you. Collection agencies buy debt's for pennies on the dollar. Anything they can collect is considered better than nothing.

Call the collection agency and explain your situation. Stress the fact you are a single income family. If they will settle ask about payment plan and stay faithful to that payment plan. Pay it on time if not early.

If they agree to a settlement and a payment plan get it in writing before you pay and demand receipts. Once it is paid off keep all documentation forever for proof of the agreement and payment.

Whatever you do, DO NOT GIVE THEM ACCESS TO YOUR BANK ACCOUNT. If they demand it, open a checking account at another institution and use that account for paying off this debt and nothing else.

The next time you think of putting something on credit remind yourself of this situation and ask yourself. Do I really need this? How soon can I pay this off?

not in a legal sense,

Jesus! I hope you don't raise kids with those same ethics. "Yeah, you know its 100% your fault, but find any loophole you can to not own up to your responsibility." Great, just great.



I don't really think you have the option to accept or not accept a garnishment.
Priceless!


if the op has no realistic way of repaying this debt, then bankruptcy is a legal, realistic option.

Give me a break. Its $7,000. GET ANOTHER JOB! If you have two cars, sell one. You've got blood/plasma SELL IT. The problem is people these days have no idea what sacrifice really is. If you work during the day then find a weekend job doing ANYTHING. People have no problem acquiring the debt and then look for anyway out of it short of actually paying it. $7,000 is not insurmountable.


i'm unaware of that requirement. i believe that the fdcpa requires a collection agency to report the validity of any debt that they are trying to collect upon request.

I certainly do not know the law here, but I think he's in for a rude awakening if he walks into court spouting, "I want proof of my debt!" Does this mean he should now lie under oath? You actually think the judge is going to delay the case because the debtor now says he wants proof? I would imagine the debtor will show they have sent a dozen or more letters, made endless phone calls and not once did the dead beat ask for proof until now - as a stall tactic.


a collection agency makes money by actually receiving payment... they receive a percentage of any successful collection. therefore, they are pretty much always willing to cut a deal.

Give me a break. They've already filed the case and have a court date. You think they will take some lessor offer when they are now assured 100% + fees via a garnishment. I agree in the beginning they would most likely work a payment plan, but that ship has sailed. What they might do is take a lesser offer if you pay the balance off (say from a loan from a family member).


At this point, I don't think anyone needs a lecture about their character, we've all made mistakes at some point or another.


Yeah right Karried, Heaven forbid character actually counts for something. Instead, lets all hold hands, tell the dead beat it will be okay and lets explore ways of screwing the creditor.

How about don't air your dirty laundry if you don't want others to tell you how bad it stinks!

Yeah right Karried, Heaven forbid character actually counts for something. You're right. It does count for something and it explains why credit card companies have so very few people willing to support their way of doing business.

Wow. Someone comes on the forum to ask for advice, and gets a character check by some no name hiding behind a screenname when that person probably is already stressing and feels like crap already. Great attitude there!

Situation sucks, things happen where income drops and we get behind on our debt payments. Sure there are things within our lifestyle that we can change to make do with what we have. Sometimes people intentionally turn a blind eye because it is uncomfortable or they just don't know what to do. Trashing them on a message board doesn't really solve anything except making sure your name is mud and word is worthless.

I had a roommate go through a similar thing with a local attorney office and a credit card that they couldn't pay. I would assume it is the same law office since they have a knack for filing a ton of lawsuits in the area. Even after they went after the judgment, they still were willing to discuss payment options because they realized there was no way they were getting their full payment.

Like others have said, probably ask for validity of debt and then start talking to them. But i'm no lawyer, so don't use that advice to trump that of someone who has a legal background. :)

Even someone with great character can find themselves in an unfortunate situation and sometimes it's not of their doing and it gets out of their control. There are a lot of variables.

Character: the aggregate of features and traits that form the individual nature of some person or thing.


I personally think it's of poor character when someone reaches out and needs and asks for help, to kick them in the teeth when they are down.

Have the stay at home wife take a night job, you take the nightly parental duties. Piece of cake. You could knock out 7grand in a couple of months, then back to the idyllic family arrangement.

I started raising my kids alone when my little girl was 17months old. Its not easy, but it beats garnishment.

Character does count to your employer. Especially if you plan on going anywhere with your company.
Its kind of hard to recommend someone for a supervisory or financial role when they have a garnishment on their books.

You spent the money foolishly (starting out a marriage by running up debt on the wedding and honeymoon - just really, really dumb) then made additional choices that got you in over your head. That is not intended to be an attack on your chracter - it is a description of something that a lot of us have done. Makes for a sucky life. It sounds like you are trying to get sensible about your finances and I wish you luck. Try to avoid bankruptcy - I assume you want to own a home, someday. Now that this is in court, they have you over a barrel. Either get an attorney or call the attorney who filed the claim to see what you can work out. Again, good luck. I'm glad I'm not that young, anymore!

Thank you to those who have decided to offer constructive suggestions rather than just continue to point out the obvious and insult me. Maybe you misunderstood the point of my post. Yes, I f*cked up. I am not trying to weasel out of paying what I owe, I am trying to pay while not letting my kiddo go without food, clothes, and diapers. I made a mistake and now I am trying to make things right. It can't hurt any of you (bailjumper) to get off your high horse and offer some usable advice so someone who trying to reverse their bad life choices.

Jesus! I hope you don't raise kids with those same ethics. "Yeah, you know its 100% your fault, but find any loophole you can to not own up to your responsibility." Great, just great.

I'm not trying to get out of it, just to pay it in a reasonable way where I can still provide for my families basic needs.


Give me a break. Its $7,000. GET ANOTHER JOB! If you have two cars, sell one. You've got blood/plasma SELL IT. The problem is people these days have no idea what sacrifice really is. If you work during the day then find a weekend job doing ANYTHING. People have no problem acquiring the debt and then look for anyway out of it short of actually paying it. $7,000 is not insurmountable.

I moved to a cheap 1-bed apartment (for a family of three) in a seedier area of town to save money. I carpool to work and sometimes ride a bike. I have sold many household items. I sold my truck last weekend. I don't eat out. My wife buys clothes either on clearance or at consignment sales. A second job is on the horizon. I know what sacrifice is like...but I'm doing it to get out of debt. It's called "dynamiting the log jam". Sound familiar?


I certainly do not know the law here, but I think he's in for a rude awakening if he walks into court spouting, "I want proof of my debt!" Does this mean he should now lie under oath? You actually think the judge is going to delay the case because the debtor now says he wants proof? I would imagine the debtor will show they have sent a dozen or more letters, made endless phone calls and not once did the dead beat ask for proof until now - as a stall tactic.

You should probably educate yourself here.


Give me a break. They've already filed the case and have a court date. You think they will take some lessor offer when they are now assured 100% + fees via a garnishment. I agree in the beginning they would most likely work a payment plan, but that ship has sailed. What they might do is take a lesser offer if you pay the balance off (say from a loan from a family member).

Yes...they will take a substantatially reduced amount.


Yeah right Karried, Heaven forbid character actually counts for something. Instead, lets all hold hands, tell the dead beat it will be okay and lets explore ways of screwing the creditor.

How about don't air your dirty laundry if you don't want others to tell you how bad it stinks!

I dont' really care for your condescending tone. You have obviously never been in this position (a "dead beat" as you so lovingly put it)...and for that congrats. Nobody said I shouldn't pay and neither did I.

Honestly, unless you're only making $7,000 a year it makes no sense to file bankruptcy for such a low amount. Plus it will wreck your credit for 7-10 years. Yeah, this collection company has probably wrecked your credit right now but a collection action could be off your record in as little as 3 years. Three years is nothing, versus a decade which will seem like an eternity. I'd say rule out bankruptcy.

Okay, I think you should pay back the amount you owe, but I think $7,000 is probably way more than you originally owed. "The juice" has been running quite a while and the credit card company and attorney have just thrown a bunch of bogus charges on top of your original amount to get to that amount.

If it were me, I think I'd call the credit card company directly and ask to speak to a manager as soon as someone answers. Then tell the guy your situation, that you're in collections and just received a letter from an attorney. I would probably be honest with them and be very cordial and tell them you don't disagree that you owe them some money, but that you really need to see something in writing explaining what all it is that you owe. Have them fax it to you today. Explain to them that you mailed a certified letter a while back asking that they do this and they never did. Explain that you are willing to come to some settlement with them but that you need to see the list of charges and have a discussion about it and the time frame for repayment.

It is possible that you may be able to negotiate that $7k down to a much smaller amount. It is also possible to work out a deal where you can repay it over a period of time rather than "tomorrow." Don't deal with the slimebag collections attorney unless you have to and then repeat the same tactics above. At worst you're stuck paying back the $7k, but if you're lucky you can get this down to maybe $3500. The main monkey wrench is the attorney... if he wasn't involved I am pretty confident you could pull this off. Not sure how it will go with him involved but I'd give it a try. Good luck!

Honestly, unless you're only making $7,000 a year it makes no sense to file bankruptcy for such a low amount. Plus it will wreck your credit for 7-10 years. Yeah, this collection company has probably wrecked your credit right now but a collection action could be off your record in as little as 3 years. Three years is nothing, versus a decade which will seem like an eternity. I'd say rule out bankruptcy.

Okay, I think you should pay back the amount you owe, but I think $7,000 is probably way more than you originally owed. "The juice" has been running quite a while and the credit card company and attorney have just thrown a bunch of bogus charges on top of your original amount to get to that amount.

If it were me, I think I'd call the credit card company directly and ask to speak to a manager as soon as someone answers. Then tell the guy your situation, that you're in collections and just received a letter from an attorney. I would probably be honest with them and be very cordial and tell them you don't disagree that you owe them some money, but that you really need to see something in writing explaining what all it is that you owe. Have them fax it to you today. Explain to them that you mailed a certified letter a while back asking that they do this and they never did. Explain that you are willing to come to some settlement with them but that you need to see the list of charges and have a discussion about it and the time frame for repayment.

It is possible that you may be able to negotiate that $7k down to a much smaller amount. It is also possible to work out a deal where you can repay it over a period of time rather than "tomorrow." Don't deal with the slimebag collections attorney unless you have to and then repeat the same tactics above. At worst you're stuck paying back the $7k, but if you're lucky you can get this down to maybe $3500. The main monkey wrench is the attorney... if he wasn't involved I am pretty confident you could pull this off. Not sure how it will go with him involved but I'd give it a try. Good luck!

Good advice!

Good advice!

Thanks. I think I may have been channeling Dave Ramsey a bit there. :-)

Most of the others' advice aside, I agree with DaveSkater. Is there any way at all your wife could take on a job - part-time/night/online - even something to tide you all over.

It might not be the most ideal situation, but could help out and save the major issue and potential humiliation of a bankruptcy.

Someone also noted the possibility of negotiating a payment plan. If you can come to that, or even work with a Credit Counseling service (there's a good non-profit one out of Tulsa - DON'T go to a "hired gun"), they may be able to provide you additional help.

Whatever you do, AVOID the bankruptcy at all costs. Even if you have to get a second job if you prefer that your wife stay not-working, that may also help.

Personally, I think it takes a pretty big person to own up to their mistakes. It takes a bigger one to admit to as much on a quasi-public message board, even behind an "anonymous" name. Those who came only to point fingers at you have much to learn about humility.

I am not trying to weasel out of paying what I owe, I am trying to pay while not letting my kiddo go without food, clothes, and diapers.

Give me a break kiddo, 3 of your 4 proposed options were just that, an attempt to weasel out of paying. Even your 4th was waiting until a judge forced you to pay.

I notice you've never addressed the fact that collection agencies sue as a last resort. So, obviously they've been trying to collect for some time with no response from you.

Don't give us that trying to feed and dress my kids routine. In Oklahoma you don't need a job or money to feed or dress your kids. We give out food stamps and WIC like crazy. If you can't get that there are literally dozens of places (mostly churches) that will provide free food and clothing.

Also, yes, I throw stones when I think they need to be thrown and couldn't care less what the people here think about it. Get over it. But mixed in there was advice that I haven't heard anyone else claim to be absurd.

If you really took David Ramsey to heart a couple of months ago then you would have contacted all those you owed money then and not after they've sued you.

Did you really have to post to a public forum to come to the mature and correct conclusion? If so, that is very troubling.

Here, I'll even provide an answer that will satisfy the liberals amongst us... Wow, that really stink. Shucks, you gotta hate those credit card companies and their evil, evil ways. You're trying really, really hard and all they can do is try to starve you and your family. I'm sure you're doing the best you can and how dare they expect your wife to get a job or for you to have to spend one extra second away from your family working a second job. Don't worry yourself one bit. Either call and offer them $100, offer to pay $2 a week or tell them you're going to declare bankruptcy. Nighty nite.

I am the only one that sees the irony of someone with a screen name like BailJumper questioning character?
:LolLolLol

Give me a break kiddo, 3 of your 4 proposed options were just that, an attempt to weasel out of paying. Even your 4th was waiting until a judge forced you to pay.

I notice you've never addressed the fact that collection agencies sue as a last resort. So, obviously they've been trying to collect for some time with no response from you.

Don't give us that trying to feed and dress my kids routine. In Oklahoma you don't need a job or money to feed or dress your kids. We give out food stamps and WIC like crazy. If you can't get that there are literally dozens of places (mostly churches) that will provide free food and clothing.

Also, yes, I throw stones when I think they need to be thrown and couldn't care less what the people here think about it. Get over it. But mixed in there was advice that I haven't heard anyone else claim to be absurd.

If you really took David Ramsey to heart a couple of months ago then you would have contacted all those you owed money then and not after they've sued you.

Did you really have to post to a public forum to come to the mature and correct conclusion? If so, that is very troubling.

Here, I'll even provide an answer that will satisfy the liberals amongst us... Wow, that really stink. Shucks, you gotta hate those credit card companies and their evil, evil ways. You're trying really, really hard and all they can do is try to starve you and your family. I'm sure you're doing the best you can and how dare they expect your wife to get a job or for you to have to spend one extra second away from your family working a second job. Don't worry yourself one bit. Either call and offer them $100, offer to pay $2 a week or tell them you're going to declare bankruptcy. Nighty nite.


You have clearly demonstrated that you in fact have no idea what you are talking about. I can admit my mistakes and failures, but you obvioulsy live a perfect life. Good day to you sir and enjoy the ride into the sunset on your oh-so-high horse.

Back in town for a couple of weeks and made me think of OKCTalk. This thread is really sad. Everyone makes mistakes. I don't think UpTheCreek is asking for anything more than simple advice in a desperate situation. Maybe you've never been there, BailJumper, but with a screen name like that - 'ya gotta wonder and one other thing - if the Wall Street bankers get billions with their irresponsible behavior, I don't think you have any room to throw in remarks just for "liberals." We've seen who gets the bailouts and who George W. Bush made it much harder for with his bankruptcy "reform." The capitalists always come out ahead. There's lots of false talk of "socialism" but it's really nothing more than 'state capitalism'. The public assumes the risks and vague promises and the private owners walk away with the money. Some things never change.

UpTheCreek, I don't know that you would even qualify for bankruptcy in the traditional sense. Bankruptcy "reform" that was brought about under the last administration pretty much threw what most people think of "bankruptcy" out the window. Chapter 7 is a definite no-go for $7,000. The "reform" was made as a gift to the credit card companies (the banks...the same ones we are bailing out now) and amounts like yours will simply be given a payment schedule - not tossed out. So, it's best to work it out before going the bankruptcy route. Something else that's very important --- Yes, bankruptcy stays on your credit report for ten years...however...about 15 years ago mortgage companies and others were allowed to include an all-important question on loan applications which makes that ten year rule of no consequence many times. The question is "Have you ever declared bankruptcy?" My advice would be to not even consider it and do whatever is necessary to stay out of the courts, and especially in Oklahoma. They favor big business and that's just the truth.

It sounds like you're making the sacrifices and doing all you can do. If worse comes to worse, hire an attorney to draft a compromise proposal of some sort that would allow for lower payments and then - keep your end of the agreement. Sometimes the old letter-from-an-attorney thing holds more water with business and it wouldn't cost you a lot. Good luck, my friend. It sounds like a tough time. We've all been there (or most of us) and life is one big lesson. This is one exam you'll want to forget, but one day this, too, will only be a memory.

I agree with solitude.

Working something out yourself is best but it may be too late. Your lender will be pretty certain of at least garnishment returns. But that route is not necessarily great for either party so there is definitely room to negotiate. Your ability to negotiate will be greatly enhanced if you have a knowledgeable and experienced attorney representing you.

Then if you are left with no alternative at all the attorney can help you move into bankruptcy. But it is not a good experience, creates new problems of its own for you, and does not solve all of your existing problems.

I think there is a lot of competing interests going on that have been brought up by this thread. On the one hand, you have a young person who got in over their head, the way so many of us have.

On the other, with the credit crunch and overall bad economy, there is a lot of resentment if anyone defaults on institutions that supply cash - and there are a lot of us who will end up picking up the slack - which just goes back to the fact that what we do as individuals affects other people. I think there is some real resentment that this poster talked about options that put himself first and society and the credit card company last. Thing is, as a culture, we are frequently no longer taught to own up and pay our bills (which works as the perfect incentive to keep from getting into trouble in the first place). We are taught when times get tough to do the "smart" thing instead of the "right" thing. Which irritated some on the board but this person is not doing anything or suggesting doing anything that our cuture is not encouraging him to do.

Here is a pretty good example of the great divide on the credit problem. We feel for the individual who messed up - as people of course we have sympathy - but that mess-up ultimately is going to fall on us, too, if he doesn't own up and pay his bills, in full. Which really isn't fair. And to hear someone try to deal with this in a "smart" way is aggravating. But that is what we are teaching young people to do. So this person is coming in, has gotten himself over his head and quite intelligently asked for advice. He got good advice and I personally hope he takes it.

But that doesn't change the fact that a lot of people have done the same thing and it hurts the economy and it hurts us in our OWN pocket books. Again, is it fair to the rest of us? Of course not. But I don't think a lot of people think about it in those terms. Those of us who think going into debt for a wedding and honeymoon is the height of irresponsibility (people used to save for years so that they could afford to marry!) just shake our heads. And when it becomes our problems because someone defaults - yes - it is frustrating. We as a culture aren't asking ourselves the right questions and if we did, we wouldn't be in this mess.

What is the right thing to do? What is the smart thing to do? Well, sometimes, once you get in to deep, the question is, "What is the only thing to do?" This person has relatively few options at this point. The horse is out of the barn and in my opinion, it is better to get a few dollars back that none at all. He will have screwed over some other people (ultimately, others pick up the tab) but if he learns from it, picks up the pieces, ends up not making the same mistakes, ends up starting to make more money and paying more taxes, donates to charity what he doesn't end up paying this time, he can make it right down the road and I hope he considers that a moral obligation.

I am using him as an example. Seven thousand dollars seems like a lot when you are standing in his shoes but it is not worth ruining his credit over. Especially if he makes a personal commitment to remember that he owes a certain amount to society in general and pays it back when he can.

Don't mean to be pounding on this person . He is simply behaving the way he has been encouraged to behave, no matter how shortsighted and detrimental it is to society. And he wants to fix the problem. Just because he is asking the smart thing to do vs. the right thing to do doesn't mean that he hasn't thought about what the right thing is. He is just getting advice, which makes perfect sense.

Give me a break kiddo, 3 of your 4 proposed options were just that, an attempt to weasel out of paying. Even your 4th was waiting until a judge forced you to pay.

I notice you've never addressed the fact that collection agencies sue as a last resort. So, obviously they've been trying to collect for some time with no response from you.

Don't give us that trying to feed and dress my kids routine. In Oklahoma you don't need a job or money to feed or dress your kids. We give out food stamps and WIC like crazy. If you can't get that there are literally dozens of places (mostly churches) that will provide free food and clothing.

Also, yes, I throw stones when I think they need to be thrown and couldn't care less what the people here think about it. Get over it. But mixed in there was advice that I haven't heard anyone else claim to be absurd.

If you really took David Ramsey to heart a couple of months ago then you would have contacted all those you owed money then and not after they've sued you.

Did you really have to post to a public forum to come to the mature and correct conclusion? If so, that is very troubling.

Here, I'll even provide an answer that will satisfy the liberals amongst us... Wow, that really stink. Shucks, you gotta hate those credit card companies and their evil, evil ways. You're trying really, really hard and all they can do is try to starve you and your family. I'm sure you're doing the best you can and how dare they expect your wife to get a job or for you to have to spend one extra second away from your family working a second job. Don't worry yourself one bit. Either call and offer them $100, offer to pay $2 a week or tell them you're going to declare bankruptcy. Nighty nite.

Dude, get a life. Someone comes asking for advice and you have to throw your cheap shots in. I guess you've never made a mistake and asked for advice huh?

Don't mean to be pounding on this person . He is simply behaving the way he has been encouraged to behave, no matter how shortsighted and detrimental it is to society. And he wants to fix the problem. Just because he is asking the smart thing to do vs. the right thing to do doesn't mean that he hasn't thought about what the right thing is. He is just getting advice, which makes perfect sense.

I don't understand. Encouraged by who??

My guess is that Bailjumper is still living off the earnings/success of mommy and/or daddy their for he has never had a financial crisis.

I don't understand. Encouraged by who??

I have read about a ton of articles advising people what to do if they get into trouble on debt. Not one of them says to just pay up - they all tell ways to minimize the consequences. You've read them, too. It is just the mindset we have.

I have read about a ton of articles advising people what to do if they get into trouble on debt. Not one of them says to just pay up - they all tell ways to minimize the consequences. You've read them, too. It is just the mindset we have.

To be fair, the credit card companies are doing everything they can to maximize the consequences to the consumer, so of course people have to fight fire with fire. These are companies whose predatory practices have brought them to the edge of federal regulation.

Dont listen to bailjumper he has a bug up his u know what, judging people and talking to them like they are scum without knowing the person!!! I hope everything works out for you UPTHECREEK. A lot of us younger families are having some problems right now, hang in there, whatever you do, dont get a loan to pay that money off, and for extra stuff do be ashamed to get some help ther is churches that will help familys with some food and clothing, you guys are really going to struggle i know you mentioned you are the only worker in the house (believe its no point for your wife to have to work with young children daycare cost are crazy). how old is your boy? my son is 2, i believe we still have some size 12 month-2t clothing, we where planning on putting some in a garage sale next month, but if you need it for your son just contact me privately. Just trying to help

My guess is that Bailjumper is still living off the earnings/success of mommy and/or daddy their for he has never had a financial crisis.

Actually, I haven't lived off my parents since I moved out and went to college at 18. Which is exactly as it should be. I know what debt is. I worked various jobs while going to college and lived with 3 other roommates to keep costs down. I certainly didn't get married, start having babies and rack up debt and not pay it back while trying to go to school and get my act together. I bought my first home at 21 and took on $72K in debt. To do that I said no to credit cards, babies, and new cars.

You may not like my tone, but I defy you to find fault in my advice.

It is perfect advice. There really is a simple tried and true formula for getting ahead but a lot of young people completely ignore it and then act surprised when things don't work out. Actually, I don't think they "act" surprised. I think they are genuinely surprised because they simply have not been taught what to expect and they don't understand the value of delayed gratification.

I feel bad for them, actually. A lot of parents have not done their job and young people are being bombarded with cultural advice that is flat out stupid. The prolonged adolescence we've structured into our society does a horrible diservice to our young people. The bright ones will figure it out but they will be dealing with difficult financial setbacks at a time when they should be making small but significant steps in the direction of financial security. And the pressure to keep up with their peers who want nice homes and furniture and vacations is intense. At my age, I honestly don't care if I have new furniture. At 23 - 25 - sometimes that gives a thrill like one of those compulsive people who stalk the shopping channel. They want stuff and fun times and those things bring them happiness. But that stuff just turns to crap in short order. All kids want those things and that is nothing new. Unfortunately, instead of teaching them to resist it the way we used to, as a culture and as weak parents, we've encouraged them to give in to reckless consumption.

More long walks, less movies. Let your parents hand off their cast off furniture before you go buy new. Buying new furniture is like throwing money down a hole in the ground. Just live a little simpler and save.

The ability to delay gratification used to be a hallmark of being middle class. Not any more, is it? One could measure their success by their savings. Now it is how much is left on their credit limit. We have all become miniatures of the whole economy. :(

well said usg'60

Bankruptcy does not always mean your whole credit card balance is discharged. Sometimes, your debt is merely restructured so you can manage the payments. So, anyone who might say otherwise, bankruptcy does not necessarily mean getting out of paying your debts. You can stop passing judgment now.

Something else you should know - a lot of collections agencies out there are not aboveboard. I would absolutely demand proof I owed them the money before I paid it to them. There's a strong possibility they could be trying to collect the money fraudulently and by trying to be a stand-up guy, you could get taken to the cleaners. Just because someone says you owe them money doesn't necessarily make it so.

I can speak from experience on that. I had a collection agency try to collect a bill from a hospital which I had already paid to the hospital. I don't think there was an intent to defraud... just a typical billing screwup. Hospital billing always seems to be a nightmare.

There's a strong possibility they could be trying to collect the money fraudulently and by trying to be a stand-up guy, you could get taken to the cleaners.


I had a collection agency try to collect a bill from a hospital which I had already paid to the hospital.

Jeesh, did either one of you actually read this guy's version of events. He doesn't deny he owes the charges. Actually he admits to racking up the debt. He was simply considering giving them the run around - to which I called B*ll Sh*t.

File bankruptcy.
Pros: My credit score is sub-600 already, how much more can I hurt it?

As Dave Ramsey says, don't worship at the alter of FICO, so a FICO means nothing to Dave Ramsey. Yes, we are taught that debt can be "good" and used as "leverage", etc. Look how well that methodology is doing for Wall Street and other investors these days...now you can't change your past, but going forward, buy everything with cash and don't worry about your credit score, etc.

As Dave Ramsey says, don't worship at the alter of FICO, so a FICO means nothing to Dave Ramsey. Yes, we are taught that debt can be "good" and used as "leverage", etc. Look how well that methodology is doing for Wall Street and other investors these days...now you can't change your past, but going forward, buy everything with cash and don't worry about your credit score, etc.

That's true. Dave was on Fox News recently and he made that exact point. He said his own FICO score is low because he doesn't have credit card balances and pays cash for everything. Interesting.

Dont listen to bailjumper he has a bug up his u know what, judging people and talking to them like they are scum without knowing the person!!! I hope everything works out for you UPTHECREEK. A lot of us younger families are having some problems right now, hang in there, whatever you do, dont get a loan to pay that money off, and for extra stuff do be ashamed to get some help ther is churches that will help familys with some food and clothing, you guys are really going to struggle i know you mentioned you are the only worker in the house (believe its no point for your wife to have to work with young children daycare cost are crazy). how old is your boy? my son is 2, i believe we still have some size 12 month-2t clothing, we where planning on putting some in a garage sale next month, but if you need it for your son just contact me privately. Just trying to help



What a nice gesture Jesseda!! :congrats:

As Dave Ramsey says, don't worship at the alter of FICO, so a FICO means nothing to Dave Ramsey. Yes, we are taught that debt can be "good" and used as "leverage", etc. Look how well that methodology is doing for Wall Street and other investors these days...now you can't change your past, but going forward, buy everything with cash and don't worry about your credit score, etc.

Bad analogy. Wall Street was repackaging debt as securities and selling it.

There is such a thing as 'good debt.' So long as the debt is producing more income than it takes, it's a good debt. Many businesses wouldn't function without being able to borrow money. Most folks wouldn't be able to go on to higher ed without borrowing money. A house is good debt if you can afford it as it's generally a better deal for your money and you build equity.

I don't think Dave Ramsey talks enough about good debt.

Of course you shouldn't worship a FICO score.. but it does help in things like getting better loan terms and lower interest rates on big purchases.

A high FICO tells the lender that you are responsible and chances are good that they will get their money back ... it's a tool for them to help in their decision to loan you money.

Plus, it's convenient when you want to get in and out buying a car or anything else for that matter. Instant loan approval, gotta love it.

Of course, ideally, we'd all pay cash for big ticket items but often times, that's not possible. Used to be, by the time you save enough money to pay for a house, it's usually appreciated and the rate of inflation out paced your savings.. so yeah, a high FICO score can be very helpful.

Jeesh, did either one of you actually read this guy's version of events. He doesn't deny he owes the charges. Actually he admits to racking up the debt. He was simply considering giving them the run around - to which I called B*ll Sh*t.

I read it. All of it. Did you read my post? Do you keep up with the news? Are you aware of all the so-called collections agents that run around representing themselves as owning your debt when they do no such thing? Are you aware of how many so-called collections agents who use bullying and other illegal tactics to collect debts from people, regardless of whether they actually own the debt or not? I think our OP is entitled to proof that he does indeed owe the money to this particular company before he plunks down a dime in their direction. To do otherwise would be extremely foolish. That's not avoiding responsibility, that's BEING responsible.

You'll notice I did not recommend for or against bankruptcy. I don't know enough about finances to be able to offer that kind of advice. I know what I have done in the past (and it was not bankruptcy). But I do know about consumer protection. If you would even consider handing over money to a collections agent without them proving you owe the debt to that company (whether you think you owe it or not is beside the point), you need to sit down and do some reading this weekend. You're just spoiling for someone to clean out your bank account.

Back when you did business with people you saw face to face, getting out of debt "legally" was the kiss of death because no one would trust you to stand behind your debt. The "smart" thing was the "right" thing. Not anymore. Be that as it may, the poster admits this is his debt. Insisting that they "prove" it is just a delaying or negotiating strategy. Goes to character, I suppose. Plenty of people would do exactly the same thing.

when you ask for an entity to validate a debt, you're not just asking not only to 'prove' the debt but to 'prove' the amount of debt claimed. it would be unwise to start paying on something without first determining how much is actually owed... as already discussed, collection agencies typically add on junk fees, inflating the amount claimed to be owed by an individual... once the first payment is received, the person paying implicitly agrees to the amount claimed by the collection agency. therefore, there's less room for negotiation. so... asking a collection agency to validate a debt that you already know you owe is not weaseling out of anything... it's a wise decision.

-M

And doing the smart thing is what it is all about. Doing the right thing is secondary.

i see... you're suggesting that it's 'right' for debt collection agencies to tack on bogus fees and pretend as if that's the amount actually owed and therefore it's the 'right thing' for an individual to take this third party at its word when it's really just pulling an amount out of thin air.

-M

Actually, I was only addressing personal responsibiility and ethics. Don't put words in my pen, please.

so it's not a mark of poor character for somebody to request validation from a debt collector, even if they know they owe a debt.

-M

If it is done to delay or as a strategy when they know they owe the debt, I think it is morally bankrupt bull****. If it is done to actually confirm a disputed debt, no problem.

ok... and if a person knows they owe, but wants the amount proven? -M

I've always thought it would be interesting if we had a sabbatical year and a jubilee year as per Deuteronomy. In the sabbatical year all debts were forgiven. In the jubilee year all property reverted to original family possession. As far as I know the latter never was practiced.

Both of these mechanisms had societal benefit.

ok... and if a person knows they owe, but wants the amount proven? -M

They are working the system to gain an advantage. Why else would they?

If you are looking for absolution for this, you won't find it from me. And trying to put me on the defensive because I have moral scruples about this strikes me as odd - what societal benefit is there to having people game playing instead of promptly holding up their end of the bargain? And at the end of the day you have to consider - Would you rather lend to someone who thinks it is the ethical thing to do to pay back their debt with the least amount of game playing, or someone who takes the money and makes you work to get it back? How is that good for business?

Interesting, to me, that there is even a discussion about this, much less an argument. If you think this is proper, I think that simply is your way of doing business. I'm not trying to change you. Clearly, you think it is more important to play "smart" than to play "right." A lot of people share your ethics.

The fact that I think it is fairly reprehensible shouldn't matter to you, at all. It would be a little late in the day to start worrying about morality once you decide to take the path you are advocating. Clearly you don't share my values and that is your right. Again, I'm not trying to change your behavior (because I know I can't), But I wouldn't lend to you so it is not my problem. I think it undermines business principals, in general, and that drives up costs but there isn't much I can do about that.

Still, I am astonished that ANYONE would try to talk me out of my scruples. The only possible reason I can think of would be to try to convince yourself that what you are advocating is just fine. It doesn't matter what I think or what I believe. If you think what you are advocating is proper, that is your choice. When people have different values, you just have to do some self examination and trust that your own are proper. The world is full of all kinds of folks and that will never change.

they are working the system to gain an advantage. why else would they?

so... do you deny that collections agencies pad the amounts they are trying to collect?

-M

Sorry, ECO, but taking the credit card company's side in this robs you of any morals whatsoever in many people's book. They are not now, nor ever have been, about doing the "right" thing. They work the system to their full advantage and that appears to be okay with you. The consumers are just supposed to roll over for that type of behavior apparently. I find it extremely egotistical for someone to think that's a morally superior position.

This has been implied but not said directly. Is it not possible to pay a collector and then the original creditor say We did not authorize that collector to collect for us, they scammed you because you still owe US? I thought that was why you asked for proof. It seems prudent to make sure that the collector is actually collecting for the creditor.

I'd been kinda watching this from the sidelines because I was curious to see if the OP could actually get the credit card company to say exactly how much he owed. A couple of years ago, I tried to pay off a credit card and it was impossible to get them to give me a final amount. All they kept saying was, "If you'll authorize us to access your bank account, we can take the payment out immediately. Otherwise, we can't tell you exactly how much you owe." I've talked to other people who have had problems with their credit card company holding their check at the front desk for 3-4 days until it was late and then adding a penalty fee for the payment being late. So this person started sending their check in a week earlier, but the credit card company began counting it as an additional payment on the previous month, then would turn around and bill this person for another payment for the upcoming month. Of course, he had to pay it or else his interest rate would have gone up to around 30%. It's all a scam to get direct access to your bank account, IMHO.