Credit card debt

[mwhitaker]

What is the name of your state? Texas

I have 2 accounts with MBNA ($1800 and $16,000(loan)....I paid on the these accounts faithfully until we had a business loss and I had 2 major surgeries back to back. I called and asked for a lower interest rate and a lower monthly payment, but was refused. I have since stopped paying on the account (approx. 6 months) and received a call stating that MBNA could take my tax return or garnish my wages....is this true? I was told for TX. this is not true**************....how long will this affect my credit? This is the only "black mark" on my credit. Should I try to negotiate a reduced payoff and if so, what percentage? Thanks alot

[Debt Guy]

Q. I have since stopped paying on the account (approx. 6 months) and received a call stating that MBNA could take my tax return or garnish my wages....is this true? I was told for TX. this is not true

A. They cannot take your tax refund. TX does not allow a wage garnishment.

Q. how long will this affect my credit? This is the only "black mark" on my credit.

A. Negative items remain on your credit for 7 1/2 years.

Q. Should I try to negotiate a reduced payoff and if so, what percentage?

A. Yes, if you can afford it. Yes, if you think you know what you are doing. What percentage depends on about a dozen variables. MBNA uses a 3rd party collection law firm that is pretty nasty.

If you really want to pursue settlement and don't feel capable of doing it yourself, then hire a settlement professional. Some attorneys do this and there are companies that do this. Some of the companies are frauds but most are more interested in what they can get out of you instead of what they can do for you. There are a few that will look out for your interest and save you more than their fee.

Be very careful choosing a settlement company on the internet. Most of them are bad experiences. My basic advice is always the same.

1. Never ever never pay anything in advance. Most of these guys want thousands of dollars in enrollment fees and it comes up front. Once you pay that money, what is to keep them interested in you? Not much. If you cancel, then they keep all the money you paid and they did nothing to earn it. An ethical company will only charge a fee after they have produced a result that you agree is satisfactory.

2. Read the agreement carefully. Never accept any clause that pre-approves the acceptance of any settlement without your express consent.

3. Beware of anyone who makes the process sound too easy. If they want to set you up on "easy monthly payments" and it will take 3 years -- back away fast. You are going to get the bejezus sued out of you and they will just say don't worry, it is only a judgment and we will deal with it later. I would worry. You should worry also.

4. Sending money monthly to a settlement company is almost always a bad idea. If you want to save monthly, open an account at the bank. Stay in control of your money. Period.

A lot of people are negative on the very idea of a settlement company. I don't think the idea is bad but there sure are a lot of bad companies. You got to be careful.