How to fight back against Credit Card companies

Quote from: paracelsus on November 01, 2009, 02:25:29 PM

Quote from: AntiSocialite on October 28, 2009, 12:02:09 AM

Unsecured consumer debt, my friends, is a thing of the past for the vast majority of us. With the secondary securitization markets locked up for the foreseeable future, banks will finally have to charge rates that are realistic. This will have a natural limiting effect on creation of new credit lines.

Well, this isn't quite true. I have tens of thousands of dollars of unsecured debt based on unpaid hospital and medical bills. Prior to that, I had a completely blank credit report, as I haven't had a credit card since 1985 (I knew I was just not the type of person who could resist using them, so I just didn't get one). Nevertheless, because of those debts, there are a lot of jobs I can't be hired for and apartments I can't rent. So even if you don't believe in credit and don't use it, you can still be screwed by credit reports and by debt.

A couple of people have mentioned these collection agencies that buy up outdated debt and try to collect on it. These are the most unscrupulous collectors I have ever run across. Kooks. They actually threaten to put people in jail, call them obscenities, and tell all sorts of lies. I have made a couple of them stop harassing me after I reported them to the BBB. What they did next was to sell the same debt to another company. Then you have to report THEM. But it does slow them down.

It is true that if you tell them not to call, they won't, although they usually will start calling again in the few months. You have to tell them in writing for it to be "legal." I did have one collection agency (of the kook variety I describe above) continue to harass me after I sent them two letters denying the debt and telling them to stop contacting me; I had to file a complaint with the state attorney general's office to get them to stop. However, when you send a letter forbidding further phone calls, that also kind of gives them the go-ahead to take you to court. In my state, if they get a judgment against you, they can go back to the judge and get permission to seize your bank account. I suppose they could seize your customers' payments if you had a brick-and-mortar store and they got a judgment against you and then got a judge to say it was okay for them to seize your customers' payments, in which case you would have to declare bankruptcy to get them to stop. I have never heard of this happening, though, and I hang out with plenty of merchants.

There is such a thing as being judgment-proof. But it means you really can't own much or have any kind of easily garnished income, like a wage.

Just like to add my own .02 here. About 5-6 years ago I got over my head in cc debt and ended up having them all charged off, had the harassing phone calls, etc. I hired one of those debt consolidation firms to help me, but they didn't really do shit. I eventually figured out on my own that I could talk to the collectors personally and get them to settle for 25% of the debt, they but it for pennies on the dollar so that is still a huge profit for them. It was easy enough, I'd save up a chunk of change, and when I had to talk to them I'd tell them I had enough to settle one card, so whoever gave me the best offer would get the settlement, and they knew damn well I was telling the truth because I'm sure they could see my credit reports. Anyway, I settled all of them except my highest balance, which was a card that had a $7300 balance when I stopped paying, and which a collector was now saying I owed $25,000 on with back interest and fees! I refused to settle that, and they actually sued me, I was served with papers and everything. I got a lawyer who reviewed the documents and filed a counter-claim (or whatever it's called), and they immediately dropped the case. Their case was pretty sketchy to begin with....the documents consisted of copies of copies, badly recorded and with no clear history of debt, accounts, or information, as the debt had obviously been sold to numerous creditors who all failed to collect on me. I think they were simply looking for a summary judgement against me so they could try to garnish wages, I expect that most people they do that to either can't afford a lawyer (it cost me $1500) or it doesn't occur to them to do so, so the collector gets a summary judgement and then can try to garnish your wages and/or assets. But once they saw I was willing to spend money to put up a fight, they immediately dropped it. I never heard from another collector on that debt again, it was almost like they marked it as uncollectable for anyone else who might be interested since I'd put up a fight lol.

Oddly enough (or perhaps not I suppose), I am back in the same situation. I was able to actually rebuild my credit rather easily, I even had a Discover card with a 9% interest rate and a $3000 limit, as well as 5% cashback, after being sued and all that other nonsense, so don't believe the hype about your credit being ruined forever. I was able to rent an apartment fine as well, although it probably helped that I'd settled most of the debts and they had been several years old. At any rate, I'm back with the charge offs again and multiple calls a day from collectors, and just waiting it out once again. The calls eventually die off as they realize you won't answer and are a lost cause (I don't have any assets and only make $30k a year). The calls for now are still annoying though, and I'm aware that you can send them one of these cease and desist letters to get them to stop. As paracelsus stated above however, my concern is that by cutting off their ability to harass me by phone, their only option to collect then will be to take me to court, and I don't have the money for a lawyer this time around. If the worst I have to deal with is leaving my cell phone on vibrate, then I can deal with that.

Anyway, I just wanted to share my own experience there. Defaulting isn't the worst thing in the world, and you can rebuild your credit, mostly it's just all the annoying phone calls. But it's much easier and better I think than declaring bankruptcy, although it also helps not to have any assets that can be seized. Most importantly, find out a good debt lawyer and maybe touch base with them to see what they can offer and might charge, and have their number handy in case one of these assholes does try to take you to the cleaners. I can almost guarantee you that the minute they see you have professional legal counsel, they will tuck tail and run.