Zwicker & Associates Wants Me to Pay More Than I Can Afford

“Dear Steve,

I got in over my head in debt. Of course, that is why I am writing you. So, about two years ago I was on a debt management plan, with Incharge debt solutions. I had to drop out after paying off one credit card and paying down a bunch more. Than about six months later I reapplied and all but two cards are in repayment or paid off. I think I only settled one card, and it wasn’t a huge amount of money.

Anyway, I had purchased repairs on my teeth and a downpayment for my daughter’s braces when I was earning about forty thousand a year (for a family of three living in Hawaii). So, I barely made debt payments then. Now, I earn about twentyfive thousand and prior to this month I was only earning about eleven to fifteen thousand. I am paying about 25 to one credit card I owe less than two hundred on, I am making a 576.00 dollar car payment (tried to refinance, but wasn’t accepted) and it’s upside down so I can’t rid myself of it without serious consequences. I owe 18,000 and mostly the interest is paid, now I have three more years till the vehicle is paid.

I also owe about eight hundred to Capital one and I’m paying that on time every month. I owe about four hundred dollars in prescriptions and ER visits. My only REAL problem is the teeth I owe for. I owed about 3800…now I think it is paid down to about 3000. I paid 100 a month for three months. Then Zwicker wanted me to pay “more” cause they “couldn’t keep me at 100” cause “It won’t be paid fast enough”.

This debt was to GE credit and was charged off and sold to Zwicker. Begining this month I started trying to pay 150 a month. Attempting this maxed me out. Now I’m charging to my mother’s credit card for gas and food or bouncing a few things and winding up with 25 dollar bank fees.

I agreed to pay for “two more months” but paying this much is killing me. I want to try to pay a hundred dollars a month for the next few years. Zwicker won’t do it, and makes me make a new agreement every three months, as if my financial situation is suddenly going to get significantly better.

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I expected it to make marginal improvements that probably won’t keep up with the price of gas. I feel like they bully me into paying more than I can afford. Can I withdraw my agreement to pay 150 May and June and tell them I need a month off (I need to pay for my daughter’s child care expense for the summer) and start back up with 100 dollar payments in June? Can I write them a letter that says, I’m a single mom that only makes 24,000 dollars a year for a family of three and your making me chose between feeding my children and paying you? and offer to pay 100 a month?

Also, when I look at my credit report, it doesn’t seem like the accounts that were charged off are reflecting my recent payments or that they were paid by settlement or in full. I think my credit score is about 550. It used to be perfect, but I filed bankruptcy six years ago and then lost my job three years ago and well….I can’t seem to live within my means, even with the best efforts?”

If we were to distill the situation down the issue here really isn’t Zwicker and Associates but that for whatever reason your income has dropped below a point that allows to meet your base obligations. By the time someone says they are having to put basic food on credit cards that’s a clear sign you are way underwater.

I think the reality is that regardless of your desire to pay Zwicker there is no way you will be able to and still afford the childcare you need for the summer.

Promising to make a payment which is not sustainable is not a path to debt freedom. It just sets you up for failure. But I bet you see the already and don’t need me to tell you.

I’m not sure what type of bankruptcy you filed six years ago but I would be it was a chapter 7 bankruptcy. In that case you would not be eligible to file a chapter 7 bankruptcy again for two more years. However you could file a chapter 13 bankruptcy now to get protection from your creditors and wage garnishments.

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Without some legal protection from your creditors any creditor could sue you and go for a judgment and wage garnishment. It appears that in Hawaii only 5% of the first $100 of monthly disposable income may be garnished; 10% of the second $100 per month; and 20% of anything over $200 per month.

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Of course in your situation, any garnishment would be a terrible result and leave you in a worse spot. Because of that I think you should click here to find a local bankruptcy attorney in your area and discuss a chapter 13 bankruptcy with them.

Outside of a legal intervention to stop actions by your creditors the only other logical option is to increase income through additional wages or additional benefits. I would strongly suggest you use our public benefits finder page and discover what benefits you may be eligible for and not claiming.

Any benefit program you can qualify for would result in an economic equivalent of you earning that much more money.

The bottom line here is that we have a situation where sticking your head in the sand and ignoring it is not going to make things better. In fact I would bet that all that would happen is that you’ll not be able to continue your payments, Zwicker may sue you and go for a wage garnishment, and that would be the worst possible outcome.

Please talk to a local bankruptcy attorney and come back and let me know what they say and you decide to do.

Please post your responses and follow-up messages to me on this in the comments section below.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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