Author Topic: Not Sure What To Do  (Read 576 times)

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soloman02

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Not Sure What To Do
« on: August 21, 2017 06:16:42 AM »
The TL:DR is I have several accounts in collections (payments stopped around April 2015), received a "litigation department" threat from PRS, but have not been issued a summons and need to know what my next steps are.

I stopped paying on my credit cards back in 2015 (April for most of them) as I was no longer able to make the payments. I switched jobs in 2012 (lower pay, was going to be let go soon anyway so I pre-empted it) and was going to an online school for IT which deferred my loans. I stopped taking classes in 2014 (hindsight says I shouldn't have taken these classes to begin with or the ones before that at UNH but that is water under the bridge now).

My federal loans were due after 6 months and I was not able to pay them and my credit cards at the same time and didn't pay the fed loans for almost a year before I started getting letters stating I would be in default. I also have a private student loan (Wells Fargo) that I was consistently late on (the joys of not making enough money). I then made the choice to stop paying on credit cards (April 2015 or so) as I was more afraid of the feds than the private credit card companies and started making payments on both the fed loans and the WF one.

In early 2016 I got a new job with a nice bump in pay (40% increase) and a new theft.. I mean tax bracket. While this is a good thing, my other private set of student loans through a lender in NH became due in late 2016 as well. All total, I've got $500/month in private student loans payments and $500 in federal loan payments (I'm trying to get the fed payment lowered through an IBR plan but the feds are taking their sweet time approving this).

Now unfortunately I did not keep as good of records as I should have and I only have one original cardholder agreement and do not have the final statements from those cards before account access was shut off. Nor did I send a DV letter when the OC's sold the debts to JDB's. After reading a little here I now know better for the future.

As it stands now I have:
2 Capital One accounts (4K and 1K) with Portfolio Recovery Solutions (I've received my second "transferred to litigation" threat letter on one account)
1 Chase Bank account (<1000) with Nationwide Credit
1 Synchrony bank (<1000) with midland Credit
2 Comenity Capital Bank accounts (~2k and ~1K) with ARS National Services
1 Kohls (Capital one as OC for under 1K) that was with Progressive Financial Services but the last notice I have from them is Jan 2016 and haven't heard anything since.

So far only PRS and Midland have shown up on my credit report.

I thought that the SOL would expire around May of 2018 since I live in NH but I see that the card agreements can choose the state the laws apply in for the SOL. I read on Capital One's agreement that they chose VA which also has 3 years but I think the others might have chosen different states with longer SOLs.

I have no assets such as a house or retirement fund. My car is now paid off and worth $3500, maybe less. In mid 2016 I bought a new bed (back was killing me) through Acceptance now. I paid it off which raised my credit score. In January of this year I applied for and was granted a credit card from Capital one (limit of 1000, raised to 1500 a couple months back). I have my Comcast bill on this card and try not to use it for anything else so it gets paid every month. At one point my credit score was down under 500 IIRC.  Now I am back to 650 per Credit Karma (which is usually off by 30-50 points). My income is my weak point as I make more than enough for it to be garnished.

I have not received a summons. It seems like PRS might go after me first as those accounts have a 3 year SOL.

So what are my next steps here?

Thanks

fisthardcheese

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  • They forced arbitration into your contract. Use it
Re: Not Sure What To Do
« Reply #1 on: August 21, 2017 10:38:27 AM »
If this were me, I would probably schedule a free consultation with a bankruptcy attorney to at least get all my options and questions answered.  A BK could wipe out all your credit card and private student loan debt and only leave you with the federal loans to manage.

If you want to fight it out, The Synchrony and Comenity debts have an arbitration clause attached that can help you get those wiped out and pay nothing on them by using the arbitration strategy we like to employ on this board.  However, the rest of your cards do not have an arbitration clause in them, since Cap1 and Chase removed arbitration from their agreements years ago.

Since your credit is already hit and all the collection and negatives still have another 5 years or so to remain on your reports, and given that you have no assets, I think BK might be the better option for you, IMO.
11 Arb Settlements (9 AAA, 2 JAMS)
3 JDB Suits Dismissed With Prejudice (2 pro-se, 1 consumer atty)
3 TCPA Settlements (2 pro-se, 1 consumer atty)
2 FCRA Settlements (consumer atty)
1 FDCPA Settlement (w consumer atty)
1 Small Claims Win (pro-se; Landlord/state consumer law violations)
1 State UDAP Settlement (ITS)
1 Federal PTC Settlement (before hearing; pro-se)

soloman02

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Re: Not Sure What To Do
« Reply #2 on: August 21, 2017 02:53:42 PM »
If this were me, I would probably schedule a free consultation with a bankruptcy attorney to at least get all my options and questions answered.  A BK could wipe out all your credit card and private student loan debt and only leave you with the federal loans to manage.

If you want to fight it out, The Synchrony and Comenity debts have an arbitration clause attached that can help you get those wiped out and pay nothing on them by using the arbitration strategy we like to employ on this board.  However, the rest of your cards do not have an arbitration clause in them, since Cap1 and Chase removed arbitration from their agreements years ago.

Since your credit is already hit and all the collection and negatives still have another 5 years or so to remain on your reports, and given that you have no assets, I think BK might be the better option for you, IMO.

I still have my original agreement with Capital One and it has arbitration (the 4K account was opened in 2005). So even though that account had arbitration back then it no longer applies now?

My understanding of student loan debt is that even private debt is virtually impossible to clear in court. I make way to much to claim financial hardship. Even at my previous IT job (where I was underpaid) I didn't qualify for any federal assistance program SNAP, etc) and even then likely could not have made the financial hardship claim.

Also all of my private student loans have a cosigner (my parents) so those likely cannot be cleared without them declaring bankruptcy as well since my understanding is the creditors will go after them. Due to the 2008 crash I was not able to refinance them with just myself as a signer since all the companies that offered to consolidate student loans stopped doing it.

fisthardcheese

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  • They forced arbitration into your contract. Use it
Re: Not Sure What To Do
« Reply #3 on: August 21, 2017 03:16:53 PM »
I still have my original agreement with Capital One and it has arbitration (the 4K account was opened in 2005). So even though that account had arbitration back then it no longer applies now?

If you used the Cap1 accounts in 2010 or later, then you accepted the new terms of service agreement which eliminated arbitration.  They will argue this point in court and likely prevail on it.
11 Arb Settlements (9 AAA, 2 JAMS)
3 JDB Suits Dismissed With Prejudice (2 pro-se, 1 consumer atty)
3 TCPA Settlements (2 pro-se, 1 consumer atty)
2 FCRA Settlements (consumer atty)
1 FDCPA Settlement (w consumer atty)
1 Small Claims Win (pro-se; Landlord/state consumer law violations)
1 State UDAP Settlement (ITS)
1 Federal PTC Settlement (before hearing; pro-se)

soloman02

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Re: Not Sure What To Do
« Reply #4 on: August 21, 2017 03:36:05 PM »
If you used the Cap1 accounts in 2010 or later, then you accepted the new terms of service agreement which eliminated arbitration.  They will argue this point in court and likely prevail on it.

Ah ok. I understand now.