Quick Answer: Bank of America’s 27.99% interest rate is legitimate, as credit card companies can legally charge high rates to risky borrowers. The debt expert recommends either stopping payments to enter collections or filing bankruptcy, since the unemployed 60-year-old borrower has limited income options to sustain the $285 monthly interest payments.
“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”
Every weekday I read the enforcement actions, filings and fine print the outlets skip, and turn them into the one or two moves that actually improve your position — a rate worth moving for, a fee you can refuse, a deadline to beat before it costs you.
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Dear Yvonne,
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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, , what you decide to do.
Before You Sign Anything: Run any debt relief contract through the free Contract Decoder to spot hidden fees and unfair terms. Check the company’s complaint history with the Scam-O-Meter.
Compare Your Real Options: Most debt relief companies won’t tell you about all your options — especially the ones they can’t profit from. Credit counseling has a 21-27% completion rate. Settlement resolves about 1% of enrolled debts fully. Bankruptcy has a 95% discharge rate — and protects your retirement. Take the Find Your Path quiz for a recommendation based on your actual numbers.
Yvonne,
Steve has given you some great advice. Bankruptcy may be your best option. Contact a couple attorneys in your area. The good ones will require that you to provide them with a complete view of your assets, liabilities, and living expenses. This is required so they can thoroughly evaluate your situation and determine which type of bankruptcy will help you, if at all.
It is a lot of work on your part. However, you will then have a better picture of your financial position. Bankruptcy may not be appropriate. We have had to tell prospective clients that bankruptcy is not appropriate.
In your own analysis, you may find that you could liquidate some assets, as Steve has mentioned. Avoid liquidating retirement funds. Take a look at your possessions. As an example, maybe you have a car you are making payments on that you really do not need. Could you sell the car, purchase outright reliable transportation, and redirect the car payments toward your credit card debt?
You may also find, when you look at your budget, that you have other expenses that you could live without. Eliminating them would improve your financial picture.
Please consider talking to some bankruptcy attorneys. The process will help you even if bankruptcy is not an option.
Best of Luck.
Jeff Jackson