Sears doubling minimum monthly due!

[HowardJones]

What is the name of your state?What is the name of your state? New Jersey
I work in a classified environment. When I was younger, I had some credit problems and had to work hard to revivie my credit (my company views credit problems as risk-indicators for security clearances). I make OK money, and own two properties. With a wife in school for another year and a half, I am now VERY tightly budgeted. A home-equity loan is covering some of our cost-of-living expenses. We can make do 'till she's out and working, but SEARS has decided to double my minimum monthly payment! I planned on doing this in the future anyway, but they're making things tough NOW! I can't afford the increase. Sears maintains they're "helping me" by forcing me to attack the principal. Can I get a legal break until the wife is employed? Without an interest-rate increase or a black-eye on my credit report? Do I have any options besides pay-off the debt? I can't do it right now. Thanks MUCH!!

[Veronica1228]

Originally Posted by HowardJones

What is the name of your state?What is the name of your state? New Jersey
I work in a classified environment. When I was younger, I had some credit problems and had to work hard to revivie my credit (my company views credit problems as risk-indicators for security clearances). I make OK money, and own two properties. With a wife in school for another year and a half, I am now VERY tightly budgeted. A home-equity loan is covering some of our cost-of-living expenses. We can make do 'till she's out and working, but SEARS has decided to double my minimum monthly payment! I planned on doing this in the future anyway, but they're making things tough NOW! I can't afford the increase. Sears maintains they're "helping me" by forcing me to attack the principal. Can I get a legal break until the wife is employed? Without an interest-rate increase or a black-eye on my credit report? Do I have any options besides pay-off the debt? I can't do it right now. Thanks MUCH!!

This is the way credit card companies are now operating. Legally, there is nothing you can do. Below is an excerpt from an article as well as a link to the original article.

Credit card companies are just now responding to a 2003 federal ruling that lenders need to set minimum payments so folks can pay the balance off in a reasonable amount of time. That means increasing that payment to about four percent of the monthly balance. (Formally, about 2%)

[url]http://www.wcax.com/Global/story.asp?S=3688870&nav=4QcSd0yx[/url]

[Some Random Guy]

You better get the wife employed, because all of your other credit card companies will be following suit shortly.

[HowardJones]

I appreciate the info...and the heads-up...I'm just stunned. When the wife lost her job, we figured it would be worth the debt increases we'd sustain 'till graduation. Now, I'm terrified! I was told if I composed a letter explaining the most I could afford was (X) percentage of my monthly due, creditors would have to take it until I can get back to normal. They'd most likely close the accounts, freeze the interest or bill me at those "non-preferred” maximum rates until I pay the balances off. After all, these ARE unsecured debts. Technically, collateral is supposedly sublimated by my credit-rating. I was led to understand that in lieu of any real collateral, the lenders just have to hope like hell that our credit-ratings keep us paying them back. Man, this sucks! I know one legitimate government-sponsored debt consolidation service. Maybe I should call them.
Thanks again!

[Veronica1228]

Originally Posted by HowardJones

I appreciate the info...and the heads-up...I'm just stunned. When the wife lost her job, we figured it would be worth the debt increases we'd sustain 'till graduation. Now, I'm terrified! I was told if I composed a letter explaining the most I could afford was (X) percentage of my monthly due, creditors would have to take it until I can get back to normal. They'd most likely close the accounts, freeze the interest or bill me at those "non-preferred” maximum rates until I pay the balances off. After all, these ARE unsecured debts. Technically, collateral is supposedly sublimated by my credit-rating. I was led to understand that in lieu of any real collateral, the lenders just have to hope like hell that our credit-ratings keep us paying them back. Man, this sucks! I know one legitimate government-sponsored debt consolidation service. Maybe I should call them.
Thanks again!

I don't know who told you about the letter thing, but it is incorrect. The credit card companies do not have to accept any terms that YOU decide you can meet. They may charge off the account, but once they do that your balance due can be raised exponentially by increased interest rates, charges etc. Also, keep in mind that even though you did not secure this debt with collateral this doesn't mean that they can't get a lien against your home or a levy against your bank account if they decide to sue and seek a judgment against you. They would then tack legal fees onto the balance due.

I echo SRG's advice. Be a two income couple ASAP. You are looking at a dismal credit rating or serious legal problems if you don't meet these new minimum payments.

[HowardJones]

Many thanks again for the advice. With nothing to lose I composed a professional letter literally BEGGING the creditor to give me 'till she graduates to raise the rate...or maybe ask for a little less. Obviously they're under no obligation, but figured it couldn't hurt to ask (nicely). At the very least maybe I'll create a dialogue that might help. I should mention the wife IS employed (part-time) as a nurse-tech...More for experience, but it does net a few dollars. The program just does NOT leave much more room for working after classes, clinical and tests. This forum is great, by the way! Nice of all of you to lend your expertise to the needy : - )