DC Tom Posted March 27, 2015 Share Posted March 27, 2015 Steer clear of "for profit credit counseling" agencies. They charge to settle your debts and for the most part are complete rip off artists. You can do the legwork yourself and use the savings to apply towards the debts that you have incurred. This, too. And most of the non-profits. Not all, but most. I interviewed for an IT job with one several years ago, and got walked through how they work. This one guy owned ten non-profit credit counseling services, and one company that provided back-end management and financial services for his non-profits. The way the scam works is that you're working with the non-profit - who legitimately don't make profits - to come up with a payment plan for your debt. Your payments to the non-profit don't go directly to your creditors, but the non-profit pays the back-end for-profit company, who pays the creditors. But the for-profit company charges the non-profits a fee for services - usually, for the first few months, equal to the total payment you make to the non-profit. In other words, your first three months of "credit card payments" don't go do the credit card companies (who may not have been contacted by the credit counselor, by the way). So by the time any of your payments would be applied to your debt, you're in collections...and then the non-profit says "Sorry, you went into collections, so we can't help you." Total scam. At the time, it was legal only in a few states, MD being one of them. Don't know if it still is (I hope not. I also don't know how it didn't violate federal law, since the transactions crossed state lines). Not all of them are like that - religious-affiliated non-profit credit counselors tend to be much more reliable, for example. But for too many, the non-profits are nothing more than shell companies hiding the for-profit at the heart that takes your money. And I got offered the job, but declined it (with considerable prejudice). I couldn't have lived with myself, contributing to that sort of thing. Another thing I just thought of, too: you're retired military. Look at the credit unions that are available to you, and see if they can help. I know the Navy Federal Credit Union is a big one, but I don't know what else is available. And yes, I know that as a Marine turning to the Navy for any sort of help is anathema...but the Marines are a department of the Navy, after all (specifically, the men's department). Link to comment Share on other sites More sharing options...
Chef Jim Posted March 27, 2015 Share Posted March 27, 2015 Of course not. I don't make assumptions. But he's a financial advisor, so I'd defer to him until evidence demonstrates he's wrong. The ruling is that inherited non-spousal IRA's are no longer free from bankruptcy. I can kind of understand that. It's not your retirement. It's what's left of your parent's retirement. Now we're worried of how they rule on spousal inherited IRA's. Link to comment Share on other sites More sharing options...
USMCBillsFan Posted March 27, 2015 Author Share Posted March 27, 2015 Thanks everyone for the advice. A lot to think about. I may go talk to a bankruptcy lawyer next week just to root through my options. I've tried to negotiate with my creditors but the minimums they're putting on me I can't even pay. The worst part is that I didn't just charge money on vacations and partying. I was forced to use it for living expenses after my divorce and a very bad relationship afterwards. Link to comment Share on other sites More sharing options...
Jim in Anchorage Posted March 27, 2015 Share Posted March 27, 2015 If you're willing to kiss off your credit just stop paying on the cards. I did and after 3 years got a letter from Chase they had forgiven a $11,000 debt . I had to pay tax's on it as income but that was far less then the original debt. Link to comment Share on other sites More sharing options...
USMCBillsFan Posted March 27, 2015 Author Share Posted March 27, 2015 If you're willing to kiss off your credit just stop paying on the cards. I did and after 3 years got a letter from Chase they had forgiven a $11,000 debt . I had to pay tax's on it as income but that was far less then the original debt. But once it goes to collections can't they garnish wages or taxes? My credit is already shot. Link to comment Share on other sites More sharing options...
The Poojer Posted March 27, 2015 Share Posted March 27, 2015 pretty sure they can only take 15% via garnishment and not sure how many garnishments can be attached at one time, i thought it was only one....might be cheaper way to go But once it goes to collections can't they garnish wages or taxes? My credit is already shot. Link to comment Share on other sites More sharing options...
KD in CA Posted March 27, 2015 Share Posted March 27, 2015 But once it goes to collections can't they garnish wages or taxes? My credit is already shot. Only if they go through the process and expense of suing you and obtaining a judgement against you. It's cheaper for them to settle. Also depends on the $ amount of the debt. At work I've only ever seen garnishments for back taxes and child support. Link to comment Share on other sites More sharing options...
The Poojer Posted March 27, 2015 Share Posted March 27, 2015 and student loans Only if they go through the process and expense of suing you and obtaining a judgement against you. It's cheaper for them to settle. Also depends on the $ amount of the debt. At work I've only ever seen garnishments for back taxes and child support. Link to comment Share on other sites More sharing options...
Jim in Anchorage Posted March 27, 2015 Share Posted March 27, 2015 But once it goes to collections can't they garnish wages or taxes? My credit is already shot. They never did to me. But they never sued me. Discover did[oddly by far the smallest of my CC debt $1700] and got some small % of my Alaska permanent fund check but no wages. Discover sued me themselves, not a collection agency. I don't believe a CA can sue, or by the time they get it it's too late. I got several letters from CAs stating the debt was to old to sue and offering to settle for a small %. I couldn't believe they told me it was to late to sue it might be a legal thing. IRS, child support and maybe others like gov backed student loans completely different. They can and will clean out your bank account. Link to comment Share on other sites More sharing options...
Maury Ballstein Posted March 27, 2015 Share Posted March 27, 2015 If you're willing to kiss off your credit just stop paying on the cards. I did and after 3 years got a letter from Chase they had forgiven a $11,000 debt . I had to pay tax's on it as income but that was far less then the original debt. After 3 years they just gave up ? Now you have a 500 credit score ? No mention of these "chargeoffs" on reports ? Link to comment Share on other sites More sharing options...
USMCBillsFan Posted March 27, 2015 Author Share Posted March 27, 2015 They never did to me. But they never sued me. Discover did[oddly by far the smallest of my CC debt $1700] and got some small % of my Alaska permanent fund check but no wages. Discover sued me themselves, not a collection agency. I don't believe a CA can sue, or by the time they get it it's too late. I got several letters from CAs stating the debt was to old to sue and offering to settle for a small %. I couldn't believe they told me it was to late to sue it might be a legal thing. IRS, child support and maybe others like gov backed student loans completely different. They can and will clean out your bank account. Thankfully I don't owe on anything like that. Link to comment Share on other sites More sharing options...
Jim in Anchorage Posted March 27, 2015 Share Posted March 27, 2015 After 3 years they just gave up ? Now you have a 500 credit score ? No mention of these "chargeoffs" on reports ? I don't care. My credit buying days are over. Cash for every thing. Its not as bad as some think. That's how my parents lived. Link to comment Share on other sites More sharing options...
DC Tom Posted March 27, 2015 Share Posted March 27, 2015 I don't care. My credit buying days are over. Cash for every thing. Its not as bad as some think. That's how my parents lived. Credit isn't as bad as some think, either. It's a valuable tool for managing cash flow. The problem is that most people don't use it like that; they use it for long-term debt. And it's a horrible tool for managing debt. Link to comment Share on other sites More sharing options...
The Poojer Posted March 27, 2015 Share Posted March 27, 2015 nothing quite like coming out of a christmas season knowing you won't have any bills arriving in the mail....i haven't used credit in over 20 years....sure sometimes you have to put off doing things or plan a bit further out, but none of my christmas gifts i buy get more expensive in time I don't care. My credit buying days are over. Cash for every thing. Its not as bad as some think. That's how my parents lived. Link to comment Share on other sites More sharing options...
Jim in Anchorage Posted March 27, 2015 Share Posted March 27, 2015 I keep a cash reserve for emergency's [roof blew off whatever] and don't miss credit at all. Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted March 27, 2015 Share Posted March 27, 2015 No retirement plans are protected from bankruptcy. There have been some interesting cases recently regarding inherited IRA's not being protected. Some work place plans are. Link to comment Share on other sites More sharing options...
Chef Jim Posted March 27, 2015 Share Posted March 27, 2015 Some work place plans are. And I misspoke earlier. IRA's are not completely protected. They are protected up to $1m adjusted for inflation and it's now up to $1.2m I think. There are just very few $1m IRA's out there seeing you can put nowhere near as much into them as a 401k. Most of the very large IRA's come from rolled over ERISA plans which are protected. Link to comment Share on other sites More sharing options...
BuffaloBud Posted March 27, 2015 Share Posted March 27, 2015 IIRC - United Way, or something similar, has debt consolidation support / services. X2B and I used it some many years ago. I agree with previous suggestions - stay away from for profit debt consolidation firms. Slow pay is better than no pay. Link to comment Share on other sites More sharing options...
Flutie Flakes Posted March 27, 2015 Share Posted March 27, 2015 And yes, I know that as a Marine turning to the Navy for any sort of help is anathema...but the Marines are a department of the Navy, after all (specifically, the men's department). So are you insinuating that Navy personnel are part of the women's department? You must not know that Sailors and Marines are the bastard step children of the armed forces. We would get into $&^# all the time with each other, but heaven help the Air Force or Army guy that tried to get in the middle of a tussle. Credit isn't as bad as some think, either. It's a valuable tool for managing cash flow. The problem is that most people don't use it like that; they use it for long-term debt. And it's a horrible tool for managing debt. Absolutely! I like using the bank's money to purchase something on credit and pay it off at the end of the month. On occasion I might carry a small balance, but I cannot imagine traveling without at least a couple credit cards in my wallet. Peace of mind just in case not to mention that I rarely use my debit card as I don't what my money tied up if the account is compromised. Link to comment Share on other sites More sharing options...
IDBillzFan Posted March 27, 2015 Share Posted March 27, 2015 Just out of curiosity...how much would you need to clear the deck from all your credit cards? Link to comment Share on other sites More sharing options...
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