I have written on this subject before with an emphasis on the possibility of bankruptcy or foreclosure, and you were kind enough to give me solid advice without judging me. Now I am wondering if there really are legitimate ways to get help with credit card debt. I am so anxious about getting roped into a scheme and actually accruing more debt. A little background - I have been laid off 3 times in less than 2 years. I am bipolar and receive a small monthly disability payment thru social security, but it is not enough to live on so I have had to use the few investments I have (stocks), which I was counting on to use for my retirement. I have a huge amount of credit card debt and of course the banks have all raised the APR recently, making the minimum monthly payments out of reach. I also have been hit with a special assessment on my condo for $5200 to replace the roof. I do not owe any money on my car, it is 4 years old and paid off. Between the bipolar and the meds I have to take to “control” it, the jobs I would be able to do are very limited.
I guess it comes down to this - are there legitimate ways to negotiate with the credit card companies, either to wipe out debt or at least lower the APR? How do I find these places? I just keep thinking that anything online should have a “.org” after it if it is indeed legitimate. And does my life savings have to be wiped out before these organizations will work with me?
Thank you in advance for your advice. I am not seeking legal counsel from you, just guidance in how to proceed. Between the anxiety and the chemical imbalance of bipolar, I am having frequent bad thoughts about how to get out of this situation. It’s pretty desperate, and that’s not a good feeling.
This is Atanta, I know, but they have offices elsewhere (West Palm Beach for one).
In order to file Chapter 7, I first had to take their online course on debt management ($50.00 included in my attorney’s fees), but take a look at the site and you may not have to pay that fee. I:) hope not!
Please be careful if you lose this link! There are MANY “credit counselling” services who have a similar URL! Bookmark it and best of luck to you.
This is (as far as I know) the only service endorsed by Clark Howard: http://clarkhoward.com/
This economy is hell for a lot of us. What is important is that you try to avoid isolating yourself from other people in your life who’d care about you (friends, family, etc) no matter how poor, awkward or sick you become. There are other people in the same boat (either with mental illness or finances) who are not going to ridcule or judge you and who are also looking for a sense of community. I know when bad stuff happens it is almost knee jerk to think you are inferior to all those ‘normal’ people out there, but everyone is deeply fucked up and inferior in some way.
Have you thought of joining a support group for bipolar disorder or people struggling with the economy?
That’s because Quasi nailed it. If you can’t afford to make even the minimum payments and your job outlook isn’t good, a reputable credit counseling service is the best (maybe the only) option outside of bankruptcy. And for someone in your situation, bankruptcy is nothing to be ashamed of.
There are options, so stop that talk about “sleeping” right now, okay? As Red Green says, we’re all in this together.
As I wrote previously, be very careful, because some of these “agencies”, while appearing to want to help, will do nothing but take your money and then do very little (if anything) to help you.
Pay attention to those URL’s.
Stay with us here on the Dope, and please check out Clark Howard, et al.
You can do this yourself. Call the credit card companies and explain your situation. They will not work with you unless you already are several months late on payments, but assuming you are at this point they will be quite willing to try and work something out rather then send you to collections where they will get pennies on the dollar. If you stick to your guns you should be able to get most of the fees waived and a very low interest rate until the balance is paid off (less than 10 for sure, shoot for 0%). They will probably demand that you close your credit card, and it is unlikely you will ever be able to get another card from that particular bank.
Unfortunately though, this does not sound like a short term problem. It really sounds like you need to figure out how you are going to be able to afford to live for the rest of your life. If you did not have this debt, do you think you could afford your monthly costs without going into further debt? I am not an advocate of bankruptcy for anyone that can possibly avoid it, but it may be necessary in your case so you can get a debt free restart and begin to live extremely cheap off of social security and the odd job here and there.
I used to work for a nonprofit consumer credit counseling agency with impeccable ethics, so I know they do exist. We NEVER pushed our clients into programs that were not in their best interest. Go to www.nfcc.org and call the number they direct you to. The National Foundation for Credit Counseling is the national organization that regulates reputable nonprofits. You should only work with an organization certified by the NFCC. You will be randomly directed to an NFCC-certified nonprofit consumer credit counseling organization in your area (and no, they aren’t all .orgs. Mine was a .com but it was consistently ranked one of the best. In fact, we were assigned cases by the Federal Trade Commission when another less-reputable agency went under.) You should also check whether they are in good standing with the Better Business Bureau (www.bbb.org.)
There are definitely options out there, and a good counselor should be able to provide you with all of them, including the pros and cons of bankruptcy vs. a debt management program vs. doing things on your own. No reputable organization should push you into making any particular decision.
Most people who qualify for a DMP can pay off their debt in 3-5 years if they are consistent with the program. Interest rates are substantially reduced–I’ve seen people with interest as high as 33% cut down to 6%. (10% is probably the average–the lowered rate is non-negotiable and set by each CC company.) Some department stores will offer 0% interest on a nonprofit DMP. The rates are usually lower than one can work out on their own (‘‘lower’’ doesn’t always mean ‘‘better’’ though, depending on your financial goals.)
I’m sorry to hear about your mental health difficulties–I’ve had to struggle with those myself, and I was actually on a debt management program at one point due to difficulty with my own finances as a result of mental illness. It was my positive experience that led me to apply for a job for that organization at a later time. Take your meds, take care of yourself, and trust that it’s not forever.
A domain name ending in .org is no guarantee of anything. .org is open to registration by anyone; it doesn’t carry special significance like .mil or .edu. Make sure that you investigate potential “orgs” just as you would any other.
I wish you the best in finding solutions to your financial situation.
Talk with a bankruptcy attorney. They can advise you, honestly, on whether you should file for bankruptcy or try to work out payments on the debt. They can also investigate the credit counseling services you’re looking at and tell you whether it’s a scam.
We’re dealing with a very similar situation, so I know what you’re going through. Even without the added difficulty of a mental illness, it’s tough, so I can just imagine how you’re feeling right now. Hang in there. There are people who can help you if you reach out to them. And there are people here on the boards who you can talk to.
Also, if you’re having trouble paying your utilities, talk to your utility companies. They’re usually sympathetic and can refer you to an assistance program.
