Yvonne wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.
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“Dear Steve,
I can not get Bank Of America to lower my interest rate. It is a whopping 27.99%. The interest I am paying on 9800 is around 285. I am now unemployed and 60 years old. Very hard to find a job at that age, that pays anything. I’m lost on what to do. I have called and also written the bank, no response from my letters and little help from my phone conversations. No way at this point to get another credit card to pay off this existing one without a job. Very frustrated, the inappropriate advantage to the underdog. I did not see this coming.
Yvonne”
The Answer:
Dear Yvonne,
Unfortunately your options are limited due to the lack of income. Without any income it would be foolish to promise to enter into any payment plan since it is probably unaffordable and not sustainable.
You have a couple of options, none of them wonderful.
- Stop paying and do nothing – If you can’t afford the payment or you have to borrow to make it you might want to consider stop making payments. This is going to land you in collections and you’ll get calls about it, and you might get sued but if you do you can invoke the next option.
- Bankruptcy – If there is no reasonable expectation that you will be able to land a new job and repay this debt you could explore bankruptcy. I’d suggest that you find a local bankruptcy attorney and schedule a free bankruptcy consultation so you can go in and learn more about what bankruptcy would mean for you. Bankruptcy will stop collections and lawsuits, legally close the door on this debt and sever your obligation to it.
- Drain an Asset – You could siphon cash from some retirement plan you might have but that is just foolish. You are nearing the end of your income producing years and whatever cash you have managed to save, you need. As long as that cash remains in your retirement accounts it is protected from your creditors.
This situation is brought about because Bank of America decided to raise your interest rate and make the payment unaffordable, they have been unresponsive in listening to your requests and now they have left you with few great options.
Let me know, in the comments section below, what you decide to do.
