I Just Started Working With Take Charge America But Chase is Suing Me. – Mae

“Dear Steve,

Just received a summons from Chase to sue me for a debt that I owed. I notified them on last week about a hardship program that I just recently joined. I am unemployed. TakeCharge America has combined all my debts and will be making one payment from the unemployment benefits that I received. I will answer this court summons but what else can I do? I only have unemployment for income.

I thought I was being proactive by trying to pay them thru this company. If this doesn’t work, should I just file for bankruptcy? I’m at a lost.

Mae”

The Answer:

 

Dear Mae,

I took a look at the Take Charge America website and can see they look like a traditional credit counseling group. So I am assuming they placed you in debt management program.

What strikes me first is that you are enrolling in a debt management plan on only unemployment benefits. Do you have any other income that you think will be steady past the unemployment benefits? I’m concerned that launching into a long-term debt repayment strategy based on short-term only income is simply setting yourself up for failure with the DMP.

I suspect the debt situation had been brewing for a while. Chase doesn’t suddenly sue people just because they enrolled in a credit counseling program. You probably also have other debts you’ve accumulated as well and Chase is just the most pressing one at the moment since they are suing you.

What we need to focus on now is to readjust your priorities and not get freaked out about the debt situation. I know, easier to say than do. The priority right now is to make sure you can meet your necessary monthly obligations on what little income you have coming in. Next, if you have any money leftover after that you’ll need to save at least $50 a month in a savings account to start to build an emergency fund. Then, and only then, you need to look at how much money you have leftover to use for debt repayment.

In any debt repayment strategy we also need to consider the likelihood that it will achieve the goal of actually reducing the debt and accomplishing the goal of eliminating this pain for you.

So how much debt do you have in total?

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

I Just Started Working With Take Charge America But Chase is Suing Me. Mae tca take charge america dmp vs bankruptcy credit counseling ask the get out of debt expert ask the get out of debt expert
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  • Courtney Larsen

    Debt management compinies cannot help you change payments on you HELOCs or any secured loans you will still have to pay those as contracted. They do not help with student loans either. So you pay them a fee whether profit or non profit to take your monies from you to pay ther creditors and although they do not report to the credit bureaus it may or may not adversely affect your credit rating and score as the creditors will close all of your cards and will also not accept your porposed payment unless they think it is enough. In the mean time you are without credit cards and you are barely able to make it for 3-5 years. You should negotiate with your creditors directly and ask for an internal hardship program especially if unemployed on disability, health failing or child support. The whole idea of a debt management program and how they survive is to get you on a program so that the creditors still use their services. Call your creditors yourself and negotiate your own program. Is it worth you losing everything to have someone else pay your bills for you like you are a child and close all credit cards with nothing else to fall back on in an emergency?

  • Courtney Larsen

    Debt management compinies cannot help you change payments on you HELOCs or any secured loans you will still have to pay those as contracted. They do not help with student loans either. So you pay them a fee whether profit or non profit to take your monies from you to pay ther creditors and although they do not report to the credit bureaus it may or may not adversely affect your credit rating and score as the creditors will close all of your cards and will also not accept your porposed payment unless they think it is enough. In the mean time you are without credit cards and you are barely able to make it for 3-5 years. You should negotiate with your creditors directly and ask for an internal hardship program especially if unemployed on disability, health failing or child support. The whole idea of a debt management program and how they survive is to get you on a program so that the creditors still use their services. Call your creditors yourself and negotiate your own program. Is it worth you losing everything to have someone else pay your bills for you like you are a child and close all credit cards with nothing else to fall back on in an emergency?

  • Jvonutue

    All debt management companies are the same and there are none that are excluded. They do an assessment of your assets, income and budget and they try to make you live megerly so that you can pay the creditors what they ask. They are not on your side and they do not care if you can make it after you sign up or not. They try to make you cut out everything cable cellphones eating out, movies, sell cars houses and close all of your credit cards to be on their programs. Buyer beware. They work for the creditors not you.

  • Jvonutue

    All debt management companies are the same and there are none that are excluded. They do an assessment of your assets, income and budget and they try to make you live megerly so that you can pay the creditors what they ask. They are not on your side and they do not care if you can make it after you sign up or not. They try to make you cut out everything cable cellphones eating out, movies, sell cars houses and close all of your credit cards to be on their programs. Buyer beware. They work for the creditors not you.

  • Mary

    Steve,

    I used Take Charge America. They were wonderful, and I’ve been debt free for years. It’s a glorious feeling. Chase sent me threatening letters during the entire 5 years that it took to pay all creditors in full; however, they NEVER sued me. Quite obviously, it was in Chase’s best interest to accept the TCA monthly payment.

    Mary

    • Sue

      Mary I’m so glad to here that Take charge worked for you. I just finished a conversation with them and felt they would be a good fit for my situation. I also looked into a Debt Relief Management Firm “Victory Debt Relief”, they seemed good, how I have an uneasy feeling about them, like its to good to be true. They told me that they could get my creditors to cut my debt in half and even I know the charge offs will kill my credit rating compared to the debt management.

      Thanks again!

  • http://tulsabankruptcyandconsumerlaw.blogspot.com fbc

    Allow me to clarify a couple of things, for Mae’s sake and for anyone else who is reading.

    I’m a bankruptcy and consumer law attorney. For many years, I have helped people struggling with overwhelming debt. I always try to explore other options first before recommending bankruptcy.

    That said, the typical bankruptcy client has spent the last 4 to 5 years struggling with their debt problems, and basically trying to keep their noses above the water, before they finally give up and seek bankruptcy.

    That’s too bad, because if they filed a bankruptcy case when it first became evident that they needed to do so, they would have been well on their way to have cleaned up the whole mess and gotten on with their lives. In fact, at the four year mark when they finally “pull the trigger”, so to speak, their credit would have recovered and they would be in good financial shape — everything else considered — instead of just then beginning to enter the clean-up phase through bankruptcy.

    Again, let me say that I’m NOT recommending that Mae or anyone else file a bankruptcy case. That can only be recommended by a competent bankruptcy attorney who has reviewed her case. There are other options, including the option of temporarily doing nothing.

    But my concern, based on years of seeing hundreds of people in the same position, is that Mae is going to struggle and stretch to pay these debts, only to succumb a year or two (or worse, four or five) from now.
    .-= fbc´s last blog ..Real Garnishment, Real Life: Can the Bank Really Take My Kid’s Money? =-.

  • http://tulsabankruptcyandconsumerlaw.blogspot.com fbc

    Mae:

    I’m not suggesting that you file a bankruptcy case unless you are forced into it. Temporarily suspending debt payments and filing bankruptcy are not necessarily linked.

    I am only suggesting that it doesn’t make sense to spend meager unemployment benefits on paying unsecured debt. You will need every penny you can get until you find re-employment. Hopefully, you will find employment again soon and can begin paying on this debt at that time.
    .-= fbc´s last blog ..Real Garnishment, Real Life: Can the Bank Really Take My Kid’s Money? =-.

    • http://GetOutOfDebt.org Steve Rhode

      Mae,

      If you feel compelled to try a debt management program then go with Take Charge or GreenPath, it doesn’t matter. They all offer the same terms as dictated by the creditors. Pick one and work with them.

      But you also owe it to yourself to find a local bankruptcy attorney and go meet with them. Not to file, but at the very least to learn more about bankruptcy and then, and only then, can you make a fully informed decision about what is best for you.

      Steve

  • mae

    Nope, I have high hopes that I will be employed soon. But from what I’m reading between you and FBC, it seems bankruptcy is where you want me to go. I don’t have monies for an attorney and I am presently looking to legal aid to help me find one but this is the LAST resort that I wanted to take.

    Yes, I have my basic needs taken care of and I was trying to pay as much of my debt down as possible. I have until next year and maybe a little longer before my benefits ends.

    I will speak with Take Charge again and ask them some questions that you both have brought up which was very good. If I’m not employed by the time my benfits end at least some of my debts will be less – unless I decide to go bankrupt.

    Thanks again for your responses and your concern!

  • http://tulsabankruptcyandconsumerlaw.blogspot.com fbc

    Let me add to that: I *do* think people should pay their debts.

    But they should take care of necessities first (food, housing, transportation and clothing) THEN allocate the remainder of their income/assets to paying their debts.
    .-= fbc´s last blog ..Real Garnishment, Real Life: Can the Bank Really Take My Kid’s Money? =-.

  • http://tulsabankruptcyandconsumerlaw.blogspot.com fbc

    I have to agree with Steve — I don’t think it is wise to waste the minimal subsistence payments someone receives from unemployment benefits on unsecured debt. (At least I think that’s where Steve is going with his question to Mae.)

    Unemployment benefits are intended to keep a roof over your head and food in your mouth — not pay Visa and Mastercard. Of course it’s up to you how you allocate those funds.

    I think people are often too afraid of being sued, and this fear of the unknown causes them to panic and make unwise decisions with their limited funds.

    In fact, that’s exactly what the credit card companies count on.
    .-= fbc´s last blog ..Real Garnishment, Real Life: Can the Bank Really Take My Kid’s Money? =-.

    • http://GetOutOfDebt.org Steve Rhode

      FBC,

      I think you see where I’m going here. I’m really concerned that Mae is launching into a solution with little chance it will achieve the goal of long-term payments to eliminate the debt if the underlying income it is based on is temporary or allocated for other purposes.

      I’ve never met many people able to live it up on unemployment benefits. They never seem to be enough to cover the basics and they expire sooner than one would hope.

      Steve

  • mae

    Hi Steve, your comments have been very helpful. As for me, I thought I was trying take action to end the current situation. No, I’m not fearful … just wanting to pay the debts that I brought on myself. I spoke with Chase and we are in the process of working out a solution. I will contact Take Charge and inquire about the other debts. I noticed that you commented on a company called GreenPath and how well they are. Do you think I should end the services with Take Charge and look at GreenPath for my other debts. Thanks for all your help!

    • http://GetOutOfDebt.org Steve Rhode

      Mae,

      You skipped ne question I asked. Let me ask you, so what is the plan on making payments once the unemployment runs out if you still have not found a job? How much longer will your unemployment last?

      Steve

  • Pamela

    Hello Steve,

    I am so glad I found your blog. I just signed up with USA Debt Rx. They have not started taking money out of my account yet. With the information you provided I am going to close my checking account and cancel my contract with them. I will then try and negotiate with Chase and Bank of America. I owe $17,000 between the two accounts and am now two months behind. Bank of America said they work with GreenPath. I am going to call them tomorrow and make an appointment.

    My problem was being late and then the intrest rate went up to 26%. I could no longer make the monthly payments. I think I am going to send what I can and work with GreePath to get a lower interest rate.

    • http://GetOutOfDebt.org Steve Rhode

      Pamela,

      I know the folks at GreenPath and they are a lovely group of people with very efficient systems. Let me know how things go for you. Stay in touch.

      Steve

  • mae

    Steve, my debt is close to $18,000. Take Charge did look at my necessities as well as allowed $40.00 to be saved. That meant almost one unemployment check is going toward my debts and the other one for living expenses. I have no car payments and no mortgage. If I stop paying anything on my debts won’t that encourage more lawsuits?

    • http://GetOutOfDebt.org Steve Rhode

      Mae,

      Will others come after you if you stop paying, yes. But that’s not the issue here.

      Let me ask you, so what is the plan on making payments once the unemployment runs out if you still have not found a job? How much longer will your unemployment last?

      What are you most afraid of here, disappointing the creditors, being in collections or taking action to end the current situation? Something is holding you back from seeing the bigger picture and I suspect it is a fear or belief.

      Steve

  • http://cccsok.org Jennifer Wallis

    In response to Mae and the following comments: If you signed up with a debt management company and Chase sued you two days later, it was not in response to you signing up with a debt manaagement company. The legal process would have started a while back. I do know that some creditors will file suit once they find out that you have signed up with a debt settlement company but not usually debt management. FBC, if we have clients that are just starting on our program and get sued, we do not walk away. We can actually contact the creditors and sometimes get them to accept payments instead of garnishing wages. Often, we are successful at getting the accounts pulled back from legal if the clients pay through our DMP. The creditor may have them sign an agreed judgment (allowing them to garnish if the client misses payments). The bottom line is that you should at least call your creditor (or ask the debt management company to call) because you never know if you have any options to stop the lawsuit. If you can, bankruptcy may NOT be necessary.

  • http://tulsabankruptcyandconsumerlaw.blogspot.com fbc

    Mae – I’m sorry to tell you that your situation is all too common for people that I see. These debt management companies take advantage of people who are desperate and then walk away when they get sued.

    You should go find a competent bankruptcy attorney today. Contact your local bar association to get a referral or do a search on Google for local bankruptcy attorneys. As Steve said, that doesn’t necessarily mean that you will have to file a bankruptcy, but these are the guys and gals who know what to do. Ask them for their advice.
    .-= fbc´s last blog ..Real Garnishment, Real Life: Can the Bank Really Take My Kid’s Money? =-.

  • mae

    Thanks Steve. Should I put a halt to the DMP program before they begin taking out my monies. Yes, I readily admit I was behind because my debt was unfortunately larger than my income. Once I was laid off it became even worse. I learned from my mistakes and was trying to rectify it by trying to make arrangments to pay my debts with one payment. Unemployment benefits only comes twice a month, at this point, I have only one check to live off of and it is definitely living bare. I have learned, once I’m out of debt, that’s it for me. However, I would like to know if I should just stop the DMP before they start processing any monies and call my other creditors to let them know. All my creditors were notified beforehand of what I was trying to do to get their debt settled. I assumed as long as they were going to get paid, they would be satisfied. How will sueing me get them their monies, when I have no home, not presently working, nor monies in the bank? At least they would have received payments from the DMP. Are these companies that horrible that the credit card companies don’t want to work with them?
    Thanks again Steve for your help!
    HUGE HUG!

    • http://GetOutOfDebt.org Steve Rhode

      Mae,

      From what you have shared I seriously doubt that a DMP is going to resolve your debt problem for you. I think you need to speak to a bankruptcy attorney before you pay anyone anymore money to deal with this for you.

      The issue here is you are looking at this as an individual process and it’s not. Creditors deal with these issues in bulk. People who fall into a certain bucket get X. In your case that’s sued.

      Big hug right back at you.

      Steve

  • mae

    OH MY! I just signed up with a debt management company and 2 days later was being sued by CHASE. I thought I was doing the right thing, trying to pay off all my ceditors with one payment, but it seems this is NOT the best route. Should I put a halt to this right now and talk to an attorney instead!

    • http://GetOutOfDebt.org Steve Rhode

      Mae,

      Talking to a bankruptcy attorney does not mean you are going to file bankruptcy, just go and get information. If you got sued two days after entering a debt management program that tells me you were fairly well behind by the time you entered. The DMP is not going to stop the suit now.

      Steve

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