Hello,
I currently have excellent credit (735/735/750 are my 3 scores). My issue is that I have a balance of $35,000.00 with bank of america (14.9 APR,had a zero apr for 1 year-introductory rate), I've called them 7 times to work out a more comfortable payment or lower my APR b/c as it stands I've been paying around $800 a month for 5 months now and truth be told my outstanding balance is hardly effected. They won't do a thing for me. I tried to refinance my house but was denied due to my house value dropping by over one hundred thousand. I recently got scammed by Siler Financial who promised to help and did nothing but take $895. from me. I contacted Clear Point financial and b/c my interest rate isn't above 16% they can't help. I've tried contacting different debt solution companies and so far the best offer is from first federal financial who say that I have to pay $450 a month for 48 months that will go in a trust and their lawyers will settle my debt, keep the collection calls away and my account will display a closed but settled with the credit bureau. They charge 10%. My issue is that I think I can do this myself without having to pay anyone anything. I can save $800. a month and with my income tax money I will have around $15,000.00 to negotiate with in exactly one year from now. I'm not afraid of the harrasment calls from third party collection or any threats. I also believe that in one year from now Bank of america would have written off the charge and the collection company would be willing to settle for a third of the balance. Should I do this myself? If I'm sued could they garnish the difference owed from my pay? Please advise. Thank you. Marilin G from Providence, RI
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if you default on this they could put a lein on your house. But I would agree that you are just as able to do this yourself as hire someone. I think those debt settlement companies are crooks
settling without a debt solution company
Hi Cinnamngirl,
I don't think that a credit card company can place a lein on my house because the outstanding balance is unsecured debt. If it was secured debt, example second mortgage, line of credit, etc. then a lein could occur. I believe all they can do is harass/threaten and eventually take me to court. Have you been thru such an experience?
I think that you can protect your home through a homestead but otherwise it is at risk. but like I said before, I think that you can be just a successful doing it yourself. If you keep working toward a settlement then they will never get to the lein. I think your plan is reasonable.
settling without a debt solution company
Hey Cinnamngrl,
I did apply for something called homestead but I'm not sure if you are referring to the same thing. In regards to a lein on my house, the balance due to Bank of America has nothing to due with my home. Its not a Home Equity Line of credit form of credit card. Its simply a credit card I applied for many years ago and one year ago they offered my a zero apr for one year. I consolidated all my debt into this one credit card. In the years time I paid over $7,000.but the total balance was too big for me to pay off in one years time. Now Bank of America doesn't want to help me b/c I'm an ideal client. I don't want to stop paying due to my good credit score so I believe that as long as I pay they won't talk to me. Its a catch 22.
settle an account without the help of a debt settlement
Hi marilin,
First make a budget to see how much you can realistically afford to pay. Avoid big purchases. If you think that it won't be possible for you to pay high amounts, do call the creditor again and explain to them that it won't be possible for you pay high amounts. Make them understand your situation. Keep your budget plan ready.
Thanks
look I am just pointing out that they can go after all your assets whether or not the loan held them as collateral. It is a long process and you can fight it. If you plan to settle this eventually then it shouldn't happen. you should wait a month to stop paying so the law will stop them from jacking the interest.
If the bank files a suit against you, and in this economy, they just might... Banks really don't just write off a $35,000 personal Credit card account, they will likely seek a judgement against you, and they have 10 years in Rhode Island to file the judgement under State law 9-1-13. Without a homestead clause, your house could have a lein placed on it. I have listed the Wage garnishment and Homestead rules for you state here. You should be able to get the account settled on your own, however you will need to make sure you do some home work. I would recommend telling the Bank that you are unable to continue payments, and fear you will default unless a settlement can be reached. Don't Call them, BOA branchs are everywhere, go to the local branch and as for a credit Manager/Counselor. Explain that you can't afford the debt, and want to settle it. Don't tell them you will have 15k, let them come up with a settlement amount, and the start negotions. I would recommend starting your offer at 25% of the prinicpal, (they can waive the interest on the account). If you make a good sound plan before you go in there, you may be able to get out of this debt for 45% of what you actually owe.
I recently negotiated out of a debt of $10k for only $3k, but I had to make the credit manager ask the VP of Accounting. Just keep in mind, the bank does not want to take something to court, and they are in the business of making money. If they believe you are going to default, and they may lose all the money, and then have to spend more money to get a judgement, that might never get paid, they may just work with you. Don't take no for an answer, and never sign anything. Your Signature is not required to settle a debt, but the banks is. Get the settlement offer in writing signed by a credit manager of above. If the Branch will not assist you, send a certifed letter to the following person, requesting assistance.
Director of Credit Services
Bank of America Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255
Judgements are powerful tools and can really hurt all of your assets. Some state will exempt your homestead from judgements. Here is the information for Rhode Island:
Under Rhode Island law, enacted based on legislation authored by Sen. Daniel J. Issa (D-Dist. 16, Central Falls, Cumberland, Pawtucket) in 1998, a good portion of the value of a home is already protected. Rhode Island’s homestead protection law protects the first $300,000 of equity from legal judgments.
As far as your wages, here is the law for Rhode Island
Rhode Island Wage Garnishment
Under Rhode Island law, the maximum amount which can be legally withheld from an employee's wages by an employer is twenty-five (25%) percent of the employee's disposable earnings.
Disposable earnings are defined as the earnings of an individual after deduction of taxes, social security and temporary disability contributions.
Individuals are exempt from attachment for one year if they have collected social security or state assistance.
settle an account without the help of a debt settlement
Hi marilin and wcd,
First of all I would like to thank Wcd for all the information.
Marilin, Wcd is absolutely right in advising you to contact the bank and talk to them about your problem, as I advised too. You can tell them that if they don't allow you a settlement, you can turn a defaulter due to your inability to pay the high amount. As a result the bank will agree rather than going to court and wasting more money. They may work out a settlement plan with you.
Regards,
Aaron