Originally posted by coentjeThanks, If anyone wants more information please just ask. I have been doing this a long time and it probably wouldn't be the first time I've heard your particular tale of woe. PM me if you wish I can get phone numbers for you etc. I would prefer you sought advice rather than sit at home doing nothing.
who cares who this guy is. The thread is great information and advice for anyone who is in a situation like this and most of the advice is applicable in any country in the world.
@ Cadwah: Great posts.
I think it also important for consumers to understand how credit card debt works. Credit becomes debt when you cannot afford to service it. Any number of reasons can trigger this reduction in income or increase in expenditure to put yourself in difficulty. Unfortunatly the payment protection insurance banks sell is expensive and normally next to useless. If you have it you may want to cancel it and use the money you would have spent on it buying some good income protection cover which will pay out on all instances of lost income.
Ok a case study (of sorts lol)
I only deal with people who are about to default their debts but I have worked my way there from the easy stuff😛
Whenever someone phones me I need to find out exactly what is going on financially with that customer, many people don't like giving out this information for some reason (I wonder why) - CUSTOMERS IN DEBT LIE. Without it though how do you expect me to be able to help you?
Once I have discussed the reason and questioned any...shall we say... discrepencies in the story, hopefully I would have discerned a few things
1.how long will the difficulty last
2.how severe is the difficulty
3.what is the true reason for non payment
4.what the best course of action will be for the customer (and the bank, and the shareholders, and my incentive)
What options do I have to help,
If the difficulty is temporary or mild I can normally just stop fees for a short period until the account is back up to date and running smoothly again.
I can also use a reage, this is where the bank can accept a monthly payment, normally over 3 months and if this arrangement is kept to I can wipe out your arrears(meaning you are not behind on payments anymore, the credit reference agencies are told your account is back up to date and the shareholders are happy as there are less accounts in delinquency)
In more serious cases I would need a financial statement, as I said previously this gives me a breakdown of your finances and shows me what you can really afford...(a lot of the financial statements I see have things like Sky tv, internet and other luxury items, these would not be allowed in the courts so don't expect your bank to accept them as neccesary)
If the Pro-rata amount is greater than 0.8% of your current balance then I can place you on an arrangement to pay off your balance within 125months interest and fees would be stopped and the arrangement would be reviewed every 12 months, this is the longest that my bank will consider holding an account on an arrangement.
If the offer is less than 0.8% we can stop your fees and interest but we will not be able to prevent the account from defaulting, in extreme hardship cases the bank will simply write off these debts as they would be unable to sell them if they wanted to!
I have already mentioned short settlements and this is a biggy, the further along the process your account is the less a bank will accept as payment, let me explain, if you are 1 payment late there is a 5% chance that your account will default and as such it is a better bet for the banks to keep hold of your debt, If your account is 6 months behind there is a 50% chance your account will default so at that time any settlement would be looked at and assessed on its merits, it's a sliding scale inbetween.
IVA's, as I said before are a form of insolvency where the bank doesnt recieve much, but it is still better than nothing, An insolvency practitioner would set this up for you. Basically you pay an amount into a fund, this could be for up to 6 years or so, at the end of the agreement the insolvency practitioner takes their fee and the rest is divided up between your creditors. statistically the bank would recieve between 15% and 30% of the value of the original debt. All of the accounts in the IVA would still default and ruin your credit file, this is also publically held information. If you were to miss more than 2 payments in the IVA the IP can make you bankrupt, they of course would get to keep any money you had paid them as their fee. I am not sure of the correct statistics at the moment but I will say that about 60% of IVA's turn into bankruptcies through non payment.
Bankruptcy, my pet hate as a collector (I get no incentive if all my customers go bankrupt:'(), some people need to go bankrupt, I have no problem with that at all. A lot of people go bankrupt because they don't know of any other alternatives. A bankruptcy order in the uk typically lasts for 1 year it used to be 5 but the government needed to get all the insolvents off benefits and back being entrepreneurs again. Bankruptcy is no easy way out, you will have your finances investigated by the courts, if they find that you have tried to move or conceal assets they can increase the term of the bankruptcy.
All in all that's it really, my job in a nutshell, if you understand what all this means you can come and work with me🙂 Oh did I forget the not so nice side of it all- Tracking people down, fraudsters, people who die or commit suicide and then, remarkably, I find them working at the local supermarket, the genuine people in tears, tales of heartache and woe.
Inbetween all this I still manage to play enough chess!
In America right now house repossession is up 400%! I read in the newspaper today that an economist says it's 'just the tip of the iceberg'. Middle class citizens are losing their homes at an alarming rate because the Republican dominated congress sold them out to big business - sending jobs to Mexico, China and India.
I personally know a dozen people who have lost jobs and can't find new ones. I lost my job too cause I worked for General Motors and they paid money to congressmen to pass laws favoring companies to transfer their factories to other countries. GM then spun my plant off as DELPHI and gave my retirement money to them. DELPHI took the money and built plants in India, China and Mexico then waited... a few years later they claimed bankrupcy ONLY in the U.S. operations and are closing the plants. As of right now their lawyers are trying to dismiss the obligation for my (and thousands of other workers) retirements through the bankrupcy courts.
I think the U.S. is listed around 11th for standard of living, but within two more years we'll be near the bottom of the list. What with our greedy congressmen accepting bribes to pass laws that took manufacturing jobs out of the country and Bush spending trillions of dollars for his personal war, The U.S. is going down. 😠
Doesn't matter that the Democrats took over. The Republicans and Bush have done so much damage that the estimates are it'll take 20 years just to pay off their spending.
Originally posted by arrakisWhere did you read that? I would like to see it. I predicted this in the late 90s. I was owner on a residential framing company, and i built alot of house for people that made a hell of a lot less than me. They were purchasing on intrest only for the first 10 years. that was around 97-98. I went out of buisness last december, because nobody was buying and spec homes wern't moving. I had been telling my friends to rent and save for the day when the bubble burst. What i dont know is how low can a person offer that mortgage company will take if they are sitting on a bunch of houses?
In America right now house repossession is up 400%! I read in the newspaper today that an economist says it's 'just the tip of the iceberg'. Middle class citizens are losing their homes at an alarming rate because the Republican dominated congress sold them out to big business - sending jobs to Mexico, China and India.
I personally know a dozen people who ...[text shortened]... so much damage that the estimates are it'll take 20 years just to pay off their spending.
Originally posted by cheshirecatstevensThe percent of increase in repossessions was in the Flint Journal and it was a 400% increase compared to a few years ago. I would think it would be in every newspaper across the country, but maybe that huge increase is mostly in Michigan where the unemployment hit 7.1%.
Where did you read that? I would like to see it. I predicted this in the late 90s. I was owner on a residential framing company, and i built alot of house for people that made a hell of a lot less than me. They were purchasing on intrest only for the first 10 years. that was around 97-98. I went out of buisness last december, because nobody was bu ow can a person offer that mortgage company will take if they are sitting on a bunch of houses?
Guys, you've all been a great help, thank you all!! This is not for me!! I've never owned a credit card and i have never taken out a loan (outside student loans, thank you Tony B!!!)
Now all i have to do is somehow get this guy motivated to sort this mess out, organisation isn't his strong point. The current plan seems to be something along the lines of leaving the country, which obviously AIN'T gonna work!! 😞
Originally posted by Marinkatombwell it motivated me to go over my finances this morning. i have a headache now 😞
Guys, you've all been a great help, thank you all!! This is not for me!! I've never owned a credit card and i have never taken out a loan (outside student loans, thank you Tony B!!!)
Now all i have to do is somehow get this guy motivated to sort this mess out, organisation isn't his strong point. The current plan seems to be something along the lines of leaving the country, which obviously AIN'T gonna work!! 😞
Originally posted by arrakisI think that a bigger problem is that people have been buying homes that are at the top of their ability to pay off. If you get a top mortgage based on two (or more) salaries the moment something goes wrong and one of the salaries disappears it meant that you cannot afford the house anymore.
In America right now house repossession is up 400%! I read in the newspaper today that an economist says it's 'just the tip of the iceberg'. Middle class citizens are losing their homes at an alarming rate because the Republican dominated congress sold them out to big business - sending jobs to Mexico, China and India.
I personally know a dozen people who so much damage that the estimates are it'll take 20 years just to pay off their spending.
I know it is very tempting to get the highest mortgage you can get with a big beautiful house but it is not a very smart thing to do IMO.
And you are right that the previous congress can be blamed for a lot of things but sending jobs away is not the fault of the congress but of the big bussiness
0% Balance Transfer.
you will have to pay an annual account fee ... this fee will not be at 0%, and will be paid after the balance transfer is paid. if you use successive transfers then you have to pay annual fees 2 times every year.
you will need to have a decent credit rating in order to get a high enough limit to make it worthwhile to cover the annual fee.
when you open your account salesmen will be talking to you, their carefully rehearsed sweet words will disguise the products they sell you with your new card: payment insurance or other extras ... you will only realise this after you see extra charges added to your balance ... gathering interest of course.
you will feel invulnerable with your 0% and will probably make a purchase or two ... your payments will go to the balance transfer first and so your new purchases will gather interest.
you will still have to make payments ... if you miss one then you will be slugged with late fees, these fees will accrue interest.
if things are still going well then you will probably make lots of purchases ... your payments will go to the balance transfer first and so your new purchases will gather lots of interest.
every 6 months you will have to have your credit reassessed so that you can swap to the next card ... if noone else is prepared to let you swap to them then you are stuck with the regular/high interest rate ...
there is the theoretical possibility for a 0% transfer to work ... but there are many many ways they can go wrong.