I was laid off over 2 months ago, my husband 7 years ago and still out of work. I have a Discover loan in the amount of 23,000 interest rate 10% payment 479 per month. I called to see if they have a hardship program and all they did was tell me to turn down my air conditioning unit to save funds and pay my bill. I haven’t missed a payment yet, but now it is a questions of food/insurance/mortgage verses this payment.
Do I call again? Do I now stop paying them? I can’t afford next months payment. Do you think they will work with me on a settlement?
Kari
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Kari, I understand your situation because I am living it myself. I lost my job 2 years ago and have been searching for one ever since. I am 63 years old and have spent my whole working life in a management position. Now, if I get an interview, they say you are over qualified. In other words I am too old. So for the past two years we have been using my credit cards to supplement the income I’ve lost. The monthly obligation to my American Express became so high that I knew I would no longer be able to continue the monthly payment. I called them before it was late and explained my situation and that I would be mailing what I could but that the amount would be far short of what was due. I asked if there was anything they could do to help me out for at least the next 6 to 9 months. Their response was that I have been paying on time and at least the minimum if not more so there was nothing at this time to help me but to call back after the bill was past due. I called four days after the bill was due, explained I paid a good faith amount, but still they could do nothing to help me. Needless to say they have been calling me every other day for the payment. Each time I explain my situation however they still can’t help me, not even for six months. Finally, after two months past due, (which was what one of their callers told me to do) I was transfered to their collections department. I explained my situation, out of work two years, can’t find employment, husband had cancer surgery and we have to pay medical bills, exhausted 401K, having to use credit to pay for necessaries like food, gas and clothing. Her response was “we can’t help you because of the excessive amount of charges that have been made to the account. WHAT? So now my excellant credit will be effected because I waited like they said to be able to make some sort of arrangement and now past due plus interest has made it impossible for me to come close to catching up.
Sorry to dump my problems on top of your problem, just wanted to let you know you are not alone. I think this resembles predatory lending.
Good luck!
I’m in the same boat with several credit cards and loans myself. I just sent them hardship letters explaining my situation. I will pay them when I can, but my life comes first. Without food, shelter, electricity, and clothing; what’s the point in paying for anything?
That’s why bankruptcy is part of the law to give you a second chance and a fresh start.
Hi Kari, I’m so sorry for your current situation. I know someone who owed discover $5k. He didn’t pay it for 6 months and they actually served him court papers.. If you can get into a debt consolidation plan, then do that quickly. They might be able to negotiate a lower monthly payment for you based on your income and expenses. Good Luck!!
I’m in a similar situation. Lost a great paying job in 2005 and am now making about 1/3 of my previous salary. Unfortunately, the bills didn’t adjust accordingly and now we are in debt to the tune of about $62k. My arrogance convinced me I would find a job in the same salary range and now we have maxed out almost every card we have. Not late on any payments but our debt to income ratio is not good and we barely squeeze by each month. About 1/4 of the debt is Discover who is charging me a very high interest rate for a customer who always pays and usually more than the required minimum. In fact one card was a 0% interest introductory rate and at one point I had received a letter advising the rate would be 0% until paid in full. Unfortunately, I cannot locate the letter to confirm anything. Could have paid it off at one point but with 0% interest for the life, why? I’ve considered debt settlement but am a contractor for the military and could run the risk of loosing my required clearance. In calling Discover I get about the same response you do. I have always paid my bills and honestly am not trying to get out of doing so. However, they are pushing me that direction very hard. My prayers are with you.
What a stressful situation. I’m sorry you lost your job.
Discover is notorious amongst all CC companies for their aggressive policies concerning settlement. No matter how you try to settle with them the odds are good they will sell your debt to an attorney who will come after you. Once attorney/vultures own the debt you have a better chance dealing with them and making a deal to pay it down. Since your credit is already negative with them, there is little to lose, IMHO. I would call their bluff…stop paying and let them move the process ahead. If you can’t make a deal with the attorney’s then threaten to put it in a bankruptcy whether real or not and see how you do. You can always file as a last resort. Given the employment situation, I don’t know why you haven’t spoken to your accountant and attorney yet at least for guidance and advice.
Discover very rarely sells to debt purchasers. Instead, they typically *assign* the accounts for litigation while retaining ownership. Big difference! FYI, many people have been able to negotiate DIY settlements in the 40-50% range, prior to the charge-off deadline. After charge-off, there is major risk of litigation with this creditor, which often translates to much higher settlement percentages. They do frequently offer a 0.99% APR program over 60 months, which sometimes includes a waiver on fees and interest. This program usually becomes available when the account is in the 90-day late range.
Charles –
They are actually after my mother who is 90 and on Medicaid/Medicare w/no assets nor income. I had made a deal with them to write it off and then she got served. (I accepted it naturally – she’s in a home). Right across the top of the form attached with the service paper is a line that says “Date Purchased.”
Clearly they can’t get anything anyway – I am not responsible though I did have a card to use – so what can they do? Try to get her estate? There is none. I explained this to the paralegal and she said they would let me know there intentions. I presume they will go county court, sue, I will respond the same way as I have in the past.
Shad3748, I was responding based on the original post where Kari was asking about a loan still in current standing. In your mother’s case, it sounds like the debt is much older, well past charge-off? If you “made a deal with them to write it off,” did you get that in writing? If yes, you should be able to get the suit dismissed on that basis. From your description, it sounds like she is judgment-proof anyway, so this is apparently just a debt purchaser who routinely files lawsuits to see what shakes loose from the money tree. A lot of those judgments go uncollected because they are attacking people with zero resources. You do need to be aware that a judgment creditor can still grab funds from a bank account, unless the only source of funds being deposited into that account are protected (i.e., social security income).
Charles –
Nothing in writing. I heard nothing from them for over 18 months.
I agree it’s a move to shake the tree as you say. Her income, is in fact, only SS + a kicker because she has no assets and receives an additional $200 or so per month for living expenses also through a SS/DSS program.
So I’ll respond in writing when served with court papers and then let it go.
Thanks very much for your professional critique of the situation. I went to your website http://www.zipdebt.com and found it quite informative.
Glad to help. You may also want to seek assistance from a NACA attorney (www.naca.net). Debt purchasers often violate one or more FDCPA rules, and sometimes it’s possible for an attorney to get them to dismiss the suit on that basis.
Kari,
There should be a program available to you through Discover for you to liquidate your debt. I, too like you have credit debt with Chase and they have a program called “Balance Liquidation Program” where you are set up in a program with a low interest. google the program. Hope this helps
Hello Kari,
Without knowing more about your situation we can’t tell you specifically what to do, but given your current income situation, what likely makes the most sense is to let the credit card go. Falling behind on payments will open up your options to either have the interest rate reduced, or settle down the road if your income improves.
However, given your concerns about affording the basics, it doesn’t sound like simply lowering the interest rates or settling the debt is a realistic option and you should consult with a bankruptcy attorney to explore that option.
You can find a local BK attorney to speak with for free by following this link
Bankruptcy Attorney Directory
Kari,
You did the right thing in contacting Discover and you may want to try again, this time asking asking to speak to a supervisor or asking to speak to someone in loss mitigation. Give them every chance to help you but recognize that many creditors refuse to consider relief for a debtor who is current on payments. If you miss next month’s payment they may be more willing to talk.
If they refuse you need to consider your options quickly. If you can afford a slightly lower payment you might be a candidate for a debt management plan. Call a credit counseling agency for assistance. If you cannot make a somewhat lower payment you may have to consider bankruptcy. Your circumstances suggest that you might qualify for a Chapter 7 filing and if so it is likely the Discover debt would be erased. See an attorney for specifics.
You can consider settling the debt. Considering the response you got asking for a hardship plan, I doubt that Discover would easily eliminate 40% or 50% of your debt. The debt settlement companies that do this seldom have success until the debt is charged off and the creditor has given up on collecting the entire amount. Even then the creditors are more likely to sell the debt to a collection agency. I would not suggest entering into an agreement with a debt settlement company but you can tell Discover you are unable to pay the debt and try to get a settlement. If they agree to a settlement plan you must be able to meet the terms so don’t bother accepting a plan you can’t handle.
Good Luck!
Just FYI, the process of settling an account prior to charge off was covered in this article. It might be helpful.
https://getoutofdebt.org/43105/how-to-settle-bank-of-america-credit-card-debt