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InvisibleConfucian
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When is it a good idea to consolidate (via not paying) credit card debt and ¨settling"
    #21822947 - 06/18/15 09:56 AM (8 years, 7 months ago)

So for the last several years I've accumulated a lot of different CC debt.

I haven't totalled everything up (the minimums) but I'm guessing approximately $700 or so (maybe more) is going to my minimum payments.

Every other day it's $50 here, $70 there, $110 there, etc.

Got about 10 or so cards, some $5000 balance, some $2500, some $1000, and the interest on each one is at least $30 so I'm basically treading water on these cards (balance not decreasing).

I knew I had to act when housing prices were really low so I picked up a house and paid for it using about 5 credit cards. Then had to pay for a bunch of materials at Home Depot, etc.

Do I keep treading water or should I stop paying? At some point it makes a lot more sense to just stop paying, for example, $700 is about 70% of a house payment.

I own a few houses that I rent out so I'm not that worried about ¨never being approved on a mortgage¨...Plus there are a lot of land contract options out there...

Also, if I do stop paying, should I go on a shopping spree first?

Also, will they go after my houses for payment or will they consolidate and settle my debt and be done with it? What do you think?

Basically I take $1000 or so 1 time during the month and just pay the minimums on about 10 different cards. It sucks.


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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: Confucian]
    #21825065 - 06/18/15 07:03 PM (8 years, 7 months ago)

You can declare bankruptcy but yes they will take your houses, your cash, and whatever else you own to pay it off. You are looking for an easy way out. Why should they settle for pennies on the dollar when you have assets? Pay your damn bills and stop spending foolishly. If you keep the real estate and qe takes off like a bat out of hell as many predict, your debts become easy to pay and the assets go up in value.

BTW, bankruptcy fraud is taken very seriously.


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“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835)

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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: Confucian]
    #21825119 - 06/18/15 07:18 PM (8 years, 7 months ago)

you have assets: house, cash, accounts receivables (rent from tenants), etc
you have liabilities: mortgages, CC debts, student loans?, etc

when you declare to your creditors "i can't pay my debts, let's settle"; they'll say "motherfucker, you have money.  liquidate something, bitch"


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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: memes]
    #21825146 - 06/18/15 07:24 PM (8 years, 7 months ago)

I've always liked you Confucian; so i hope you don't take the following rant personally.  but i want to point out the extreme similarities here between your state of affairs and the straw that broke the US financial system's back, back in 2007.

you're literally a microcosm of that.

you bought a house on credit (aka that you didn't have money to buy), you chopped up the bill into a bunch of little packages, you spent more money to fix/furnish things, and now you're still in a position where you still don't have the money to pay for the house you didnt have the money to pay for originally.


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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: memes]
    #21826623 - 06/19/15 03:00 AM (8 years, 7 months ago)

Cant you just default on the cards and not declare bankrupcy?  When I was out of work I had to default on my credit cards and all they ever did was send me to collections and put dirty skid marks on my credit score.  I dont think they can go after your assetts for credit card stuff if you DONT declare bankrupcy.  Once you do then bankrupcy law applies and the courts WILL apply that law to you for sure.

But I remember reading and it being discussed here even that the laws surrounded credit card debt is different then other types of debt on how they can collect and all that.  Like they don't have NEARLY the same power to come after you that other types of loans or debt is.


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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: mndfreeze] * 1
    #21826631 - 06/19/15 03:04 AM (8 years, 7 months ago)

Confucian what about optiosn tht dont involve you just defaulting on it all as well, such as getting one large card with a good interest rate and consolodating ALL your other cards onto it.  CC copmanies love that shit because they want to own your debt, and for you if you get a rocking deal on interest it saves you a lot of money.

With how many cards and the total amount of debt you might need to do it on 2 cards or somethng, but the idea is the same, just better usually to have one card, one payment and one tiny interest rate vs a bunch of shitty ones.

Or, if you owe more then 10 grand, there are those debt consoldation copmanies that will buy your debt and make an agreement with you for much smaller sum.  Be wary with these though as Ive heard some companies can be a bit shady with terms or how they operate, but I know there are a few non-profit ones around as well that are specifically here just for people who assfucked themselves credit/money wise and are trying to unbury themselves.

With all your assetts I think bankrupcy should be the last or NEAR last thing you consider.  I'd make sure you look into every option and what risks your taking since you have property you can lose.


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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: mndfreeze]
    #21827381 - 06/19/15 09:43 AM (8 years, 7 months ago)

Debt holders can sue you and go after your assets. Normally they do look for assets before they write off the debt. They will get the money out of you and your credit will still be trashed.


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“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835)

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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: Stonehenge]
    #21827841 - 06/19/15 11:45 AM (8 years, 7 months ago)

Quote:

Stonehenge said:
Debt holders can sue you and go after your assets. Normally they do look for assets before they write off the debt. They will get the money out of you and your credit will still be trashed.




I am pretty sure as others stated there is a major difference between not paying a house or car vs. credit card debt.

I don't think they really do anything aside from ruin your credit score.


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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: Confucian]
    #21828175 - 06/19/15 01:30 PM (8 years, 7 months ago)

Quote:

Confucian said:
Quote:

Stonehenge said:
Debt holders can sue you and go after your assets. Normally they do look for assets before they write off the debt. They will get the money out of you and your credit will still be trashed.




I am pretty sure as others stated there is a major difference between not paying a house or car vs. credit card debt.

I don't think they really do anything aside from ruin your credit score.




They usually don't go after assets but they have every right to do so and have done it in the past. The trashed credit rating will follow you a long time and cost you money and convenience along the way even if they don't grab your assets which they probably will.


--------------------
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835)

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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: memes]
    #21828889 - 06/19/15 04:43 PM (8 years, 7 months ago)

Quote:

memes said:
I've always liked you Confucian; so i hope you don't take the following rant personally.  but i want to point out the extreme similarities here between your state of affairs and the straw that broke the US financial system's back, back in 2007.

you're literally a microcosm of that.

you bought a house on credit (aka that you didn't have money to buy), you chopped up the bill into a bunch of little packages, you spent more money to fix/furnish things, and now you're still in a position where you still don't have the money to pay for the house you didnt have the money to pay for originally.





Thanks, I'm fine. It isn't a good comparison though. My situation is a winning investment with net gains.

A situation where homes can be scooped up for dirt cheap may never present itself again so it was a once in a lifetime opportunity. It was business savvy, one of the smartest decisions I have ever made.

If my life goes to shit I have a house to move into. If I have no other source of income I have a few grand per month to fall back on. I knew I had to get as many as possible (ended up with 3). Wish I could have gotten more. So at the end of the day I have $3000 per month cash in rent (less repairs and some taxes) and less than $1000 in debt per month. It's a lot of debt to take on but it leaves a nice surplus. In fact, with 1 rent I can pay all of the payments and still have some left over. But I'm sick of seeing $1000 vanish each month to credit cards. It's disgusting. I either need to seek a settlement or make more money so I can pay them off. The latter doesn't seem likely in the short term.

A more appropriate analogy would be if my 3 houses went into foreclosure (due to not paying the taxes or something) and they were seized, and I was left with zero houses and still stuck with all of the credit card debt.


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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: Confucian]
    #21828965 - 06/19/15 05:03 PM (8 years, 7 months ago)

You want to have your cake and eat it too. If you were the credit card company, would you let someone get away with crap like that when they owned real estate? Or would you file a lawsuit to get it? Stuff does fall through the cracks occasionally but this is a bad gamble.

You admit having a nice positive net cash flow. Why not start paying down the highest interest rate debts and gradually eliminate them? Your search for a free ride could cost you dearly. Be glad you are getting rent and that when inflation hits, you will get in effect the discount you were hoping for. Your rents will rise but cc payments will not, unless they have a clause that lets them raise it. If you are late on a payment they can often raise the interest rate so be good.

I agree it was a golden opportunity to buy houses dirt cheap. Now days every single week I get letters asking me if I want to sell a property. I just throw them away, not interested. I paid cash so no interest payments but now I don't mess with the stock market, this is more of a sure thing.


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“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835)

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Invisiblememes
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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: Confucian]
    #21829557 - 06/19/15 07:20 PM (8 years, 7 months ago)

Quote:

Confucian said:
A situation where homes can be scooped up for dirt cheap may never present itself again so it was a once in a lifetime opportunity. It was business savvy, one of the smartest decisions I have ever made.




then why can't you pay off your credit card debt?


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InvisibleConfucian
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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: memes]
    #21830253 - 06/19/15 09:44 PM (8 years, 7 months ago)

Quote:

memes said:
Quote:

Confucian said:
A situation where homes can be scooped up for dirt cheap may never present itself again so it was a once in a lifetime opportunity. It was business savvy, one of the smartest decisions I have ever made.




then why can't you pay off your credit card debt?




Wife that doesn't work so I have the ole "1 income" doing everything situation. Each meal (2/day) is $15 if lucky. Just popped out a newborn (1 month tomorrow) which is costing a lot in formula/diapers. Basically 1 income providing food/baby costs doesn't leave a lot leftover.

I need another $500 extra to go towards paying CCs each month instead of paying the minimums, that way they (the debt) can be annihilated within a couple years. Instead I am just treading water...


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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: Confucian]
    #21830265 - 06/19/15 09:46 PM (8 years, 7 months ago)

.


Edited by Confucian (07/20/15 11:08 AM)


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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: Confucian] * 1
    #21831801 - 06/20/15 09:36 AM (8 years, 7 months ago)

>Wife that doesn't work so I have the ole "1 income" doing everything situation. Each meal (2/day) is $15 if lucky. Just popped out a newborn (1 month tomorrow) which is costing a lot in formula/diapers. Basically 1 income providing food/baby costs doesn't leave a lot leftover.

$15 per meal? Obviously you are eating out or ordering out. If the wife doesn't work put her lazy ass in the kitchen and tell her to learn how to cook. I bet you waste tons of money in other ways too. Buy at Costco, sams, bj's or etc and save money. Pay extra on one card that you can pay down first then there is one less payment per month. Or throw money around constantly and end up losing everything, your choice.


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“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835)

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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: Stonehenge]
    #21831874 - 06/20/15 10:10 AM (8 years, 7 months ago)

Quote:

Stonehenge said:
$15 per meal? Obviously you are eating out or ordering out.




Seriously, that is crazy expensive.  That money isn't paying for food.  Its paying for service and convenience.


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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: DieCommie]
    #21970251 - 07/20/15 11:13 AM (8 years, 6 months ago)

Well, I crunched the numbers and I'm paying JUST IN THE MINIMUM PAYMENTS of all my credit cards $960 a month with $40,000 roughly in CC debt across over a dozen cards.

Realistically, to pay it off within 6 or 7 years it will take either a $1500/month income boost (not likely scenario), a $40,000 bank loan (not likely), or a winning lottery ticket.

I spoke with a credit card consolidation company, and from what I understand I'd have 0 credit card debt within 3 to 4 years, and my monthly payment would drop from about $960 a month to about $500/month.

It is the only sane option at this point, unless I find a better job and can set aside an extra $1000/month for the next 3.5 years!


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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: Confucian]
    #21970277 - 07/20/15 11:23 AM (8 years, 6 months ago)

Now what kind of moron racks up that kind of CC debt, you ask?

Well, in late 2009 I bought a rental house for $9,500 that rented as soon as it was renovated for $825 / month ($10,000 per year less taxes/maintenance). The "catch" was I had the cash for the house, but I didn't have the cash for the $10,000 in renovations. I took out a Home Depot card with $5500 credit and maxed it out for supplies. And over the course of the next few years worked on slowly increasing credit card lines and accounts.

I bought another house in late 2010 and did the same thing...About $10,000 added to cc debt (house brings in $1150 per month cash).

Now here is the kicker. In 2012 I had zero savings and found a lovely house for $15,000 cash! I ended up paying for the house via about 4 or 5 different credit cards ($3000 here, $2000 there, $5000 here, etc.!) And an additional $10,000 or so in renovations, a good chunk on CCs. So practically overnight $25,000 in debt. That was years ago and the $1000/month rent has brought in $12,000 (less taxes/maintenance) per year. I could probably sell the house tomorrow for $60,000. But I know that indefinite basically do-nothing revenue stream is hard to find so I don't want to sell..ever.

Then there was a big $4,000 health bill that I paid on a CC in 2013.

So, ya, that is how I ended up with the debt. Not a bunch of shopping sprees. And I still can take 1 rent out of 3 and pay off all the minimums. But it is extremely stressful having a large debtload hang over your head....


Edited by Confucian (07/20/15 11:28 AM)


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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: Confucian]
    #21973391 - 07/20/15 10:36 PM (8 years, 6 months ago)

out of curiosity (i'm not too familiar with this sort of thing) but what sort of interest rates are you having to pay?


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Re: When is it a good idea to consolidate (via not paying) credit card debt and ¨settling" [Re: Bambi]
    #21974306 - 07/21/15 05:49 AM (8 years, 6 months ago)

Quote:

Bambi said:
out of curiosity (i'm not too familiar with this sort of thing) but what sort of interest rates are you having to pay?




I would say $30 on average per card.

I know, for example, that the cards with $5000 (I think I have 2) have minimum payments of $110, and monthly interest of $60. So the balance only drops $50 even though I am paying $110/month.

That's another reason why doing the consolidation is so effective. Although I am starting to think what they really do is a "savings plan" where you put aside, say $500/month ($6000/year), and then after 3 or 4 years of saving ($18,000-$24,000) they negotiate a lump sum settlement. "Hey creditors, he isn't paying the $40,000, you either get $0 or $24,000." I guess it is extremely common nowadays, there are a ton of businesses that do this.


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