bankruptcy vs settlement

What is the name of your state? NJ
hi Ladynred and empowerment
Im from NJ.
Im a hard working father of 5. My wife works part time and has had credit cards that i did not know about and some that i did. None are joint accounts. She has put us $16,000.00 in debt with these cards. As of about 1 1/2 years ago i have known about these balances and have been trying to help pay them off. But we are getting nowhere. With the interest and finance charges we are getting NOWHERE. I have always paid for what i have and do not like to charge except for our mortgage which in itself is a big charge i guess. She has about 8 cards and most are 3 months or more behind with 2-3 in collections now. I have been reading your posts about bankruptcy and settlements and the differences with them. My parents can lend me about 80% of what my wife owes and it will not hurt them financially. I can pay them back faster at no interest or charges. I would rather pay as much of what we can of what she owes than go the bankruptcy route---my preference i guess. I saw the remark about a settlement offer . Do i first send it RRR without discussing it with the creditors over the phone. They wont speak to me anyway until my wife gives them permission verbally-not my accounts i guess. Funny how they ask you for payment but they wont talk to the spouse about it[non-account holder]. Anyway do i send an RRR letter stating my settlement offer and that they send me a 1099-C AND to completely clear the item from my credit report and get it back in writing from them? Is that how it should be worded? I read it all but am still a little confused. Any help in exactly how i should word this letter would be appreciated. Thank you. Have a great day. Bri-kid

Hi
Could someone please help me with this question? I have heard that credit card companies can raise your interest rates to 40% legally if they think you are going to cancel your card and you cant do anything about it. Should I offer them a settlement for my wifes credit cards over the phone or by RRR mail as in my previous post? Can anyone help me? Id rather not go the bankruptcy route but I dont want MY credit ruined for my wifes mistakes. I need good credit for mortgage refinance , car purchase, etc.
Thanks

[Ladynred]

First, YOUR credit cannot be ruined by the state of your WIFE's credit. NJ is NOT a community property state. Unless the accounts are joint, then it would affect your credit.

If you're going to make settlement offers for her, do it IN WRITING ONLY. Doing such on the phone is pointless.. you have no proof later that you ever had an agreement. CA's have very convenient memories and will 'forget' everything you *thought* you had an agreement on.

You can find some sample settlement letters at [url]www.creditinfocenter.com.[/url] You want to negotiate for DELETION of the collection entries and, with any luck, you can get 'paid' or 'paid as agreed' out of the original creditor. You definitely do NOT want 'settled for less than owed' on her reports.

I would not mention settlements to the CA's, they do not own the accounts at this point in time. Just send the CRRR letters to the original creditors. Start low, give yourself some negotiation room. How much they'll actually take depends on how long the debt has gone unpaid. Hers are relatively 'fresh'.

However, she IS only 3 months behind on these accounts. That means the original creditors still own the accounts and the CA's are only go-betweens. At only 3 months behind it is unlikely that ANY of them will settle. Once the accounts get closer to charge-off (6 months of non-payment), the OC's MAY be willing to settle just to get SOME money. Don't expect them to take much less than 60-80% though. A few will make a one-time offer of 35% settlement prior to charge-off.

Hi
Thanks for all your help in this response and all the other posts you have made that have given me knowledge and direction in this problem. Thank you so much. God bless you all that give advice here.
Bri-kid

[JETX]

Ladynred said, "First, YOUR credit cannot be ruined by the state of your WIFE's credit. NJ is NOT a community property state. Unless the accounts are joint, then it would affect your credit.

If you're going to make settlement offers for her, do it IN WRITING ONLY. Doing such on the phone is pointless.. you have no proof later that you ever had an agreement. CA's have very convenient memories and will 'forget' everything you *thought* you had an agreement on."
*** She is correct in that your wife's debt cannot affect your credit file. However, since that is the case (and you have no standing with the creditor), any offer that YOU make to settle the debt will very likely be ignored. I would suggest that your wife make the offers to settle, or at the very least, she notifies the creditor in writing that you are allowed to be 'involved' in her debt.

And, LIR, before you say it.... I know that a debt collector can contact the spouse of a debtor, but the spouse cannot 'negotiate' a deal with the creditor or agent.

[Ladynred]

No argument there, JetX FTC doesn't consider a spouse to be a 3rd party. Original creditors generally won't talk to anyone besides the account holder anyway.

I should have said that the poster's 'negotiations' should at least LOOK like they're coming from his wife.. her name, sig, etc. Where the money actually comes from.. well.. OC could care less !!

Hi Ladynred and JetX
One more question if you dont mind. Both of our names are on the mortgage. If my wife is sued is there any way the creditors can put a lien on our house or we can lose it? Thanks again for all your help. I really appreciate it.
Bri-kid

[Ladynred]

Its unlikely they could force the sale, it would take them a LOT of effort, and money, to do so. They could, however, place a lien on the property IF her name is on the deed. The fact that her name is on the mortgage doesn't mean much.

How much equity do you have in the property ?

[JETX]

I agree that it is unlikely that they would force a sale of the property, but it can be done, and has been done.

The writers post gives a total debt of $16k, apparently on several cards. The likelihood of a lawsuit and judgment would depend on the creditors involved and the amount of debt to each card. But, a judgment is not out of the realm of possiblity (and could be probable).

If a judgment is obtained, the creditor can take some pretty strong actions to enforce the judgment, such as seizing non-exempt property and assets and even wage garnishment. Granted, these actions can only be taken against the specific property of the debtor, but can also be done against jointly owned assets.

If you want to be able to talk about the account and make changes have your wife send a letter in writing. At the company I work for the collector is allowed to settle at 80%, I personally do not give settlements to those that just want to get rid of the credit card debt unless they have tried alternatives prior to trying to settle, have you asked the creditors about payment plans that lower the interest anywhere from 12% to 0%, and lower your monthly payment, and stops penalty fees. Have you tried a debt management company where they consolidate all your credit cards and you pay one monthly sum to them and they pay your creditors, interst at 0% and no penalties. If you are trying to settle lower than 80% then you must fill out a financial profile, and show that there is no possible way you can afford to make any payments even if you did a payment plan or debt mgt co. The lower the % you go the higher up in the management chain it goes for approval.

[Ladynred]

Debt management/consolidation/negotiation companies are 99% SCAM and will usually make things WORSE rather than better. These scam artists charge huge fees, mishandle money, misrepresent the truth of how their 'programs' work, and flat out LIE about how long it would take to pay your debts thru them. There is also the fact that creditors are NOT obligated, in ANY way, to work with these companies and you cannot force them.

Most creditors will offer far less than an 80% settlement WITHOUT any financial statments - all those companies want is all your private information - and they are NOT entitled to that kind of information without a court order !!!!

Have you spoken with the administrator about getting rid of that guy? He's confusing the posters with egit questions.

Hi Ladynred Kevinss
Firstoff could you tell me who issues the 1099-C? the credit card co. or the gov't? the card co. told me it is up to the govt according to how much you make and all.The govt sends it to you at their discretion. They are sending me it in writing with the settlement offer i made them but they wont budge on their reporting of anything but SETTLED. Its not their policy to change it {Disc].
I spoke with 2 of the major card companies that she has cards with with her permission given to them to do so. They both flat out refuse to negotiate a settlement at all. I started at 60% and went up to 80%. Theres no way I can pay it all or keep up with the payment plans they want. I also asked if I pay off the one for $4000 would they at least drop interest and finance charges on the $6000 one and they said no they only negotiate to a card holder if they are terminally ill. Well I may be after this is all over. I wont say the card co. name but they have initials CB-and they never sleep.SHe gave me 3 more little cards and the total is up to over $19000 with the old statements being updated and the 3 cards she forgot to tell me about. I dont have more than a few thousand in equity in my house . The little cards will negotiate somewhat with either no interest , only what she actually spent or borrowed[cash advance], etc but the biggies wont. I told her to at least talk to a bankruptcy attorney and see what he has to say. They dont want to work with you at all and that p---es me off because its as much their fault as hers. They extended all that credit to someone who had little credit and a part-time job. If youre married you should only be able to get credit if you BOTH sign for it. This is what can comew out of it and is so damaging. Thanks for your help and your advice. Im hoping shell at least talk to the attorney but I really dont want to not pay her bills that seems seedy but when they wont work with you at all************** Take care and thanks. Oh by the way, the big card holders said theyd keep reporting me to the credit agencies and in time would sue herand maybe garnish her wages.
Thanks Bri-kid

[bigun]

First of all, the 1099C is issued by the financial institution with of course, a copy to the IRS.
Secondly, am I to understand that these cards ARE not in our name and you're not joint on any of them? And, they are threatening YOUR credit.
Order your reports and whle waiting their arrival, get down on your knees and pray that they were stupid enough to do so. Let us know. Ladynred and I can hook you with enough lawyers that you'll likely be an owner of that cc company.
BTW, is CB Cross Country Bamk? If so, contact the AG in New Jersey. The AG in New york and Mn. have already sued CB over their collection practices. The New Jersey AG has shut down a Jersey collection agency called National Check Control. The time may be right to file a complaint about their credit reporting threats.

The agency's lying to you to try and confuse you. Good thing you came here, eh?