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Non-Tulsa Discussions => Chat and Advice => Topic started by: TUalum0982 on August 17, 2010, 12:09:04 AM

Title: chapter 13 bankruptcy
Post by: TUalum0982 on August 17, 2010, 12:09:04 AM
Things aren't looking so good for myself right now, and I dont see them getting better anytime soon. I know bankruptcy should be a last resort, but from researching online, there are too many stories of people wasting thousands of dollars on debt relief programs.  I have no issue with paying back every last cent that I borrowed, I just can't make the monthly payments they are asking for right now, in chapter 13 bankruptcy, my understanding is that you sit down with a trustee and figure out a payment plan that is made in montly payments over a set time (3-5yrs).  I know this will negatively affect my credit score and possibly getting a diff job, but at this point I dont see an end.  It is affecting my marriage, and overall my life in general.  I have taken a pretty decent pay cut over the past 1.5yrs and can't keep up with the payments.  I am not asking for any sympathy just simply asking for some advice.  

I know there are a few attorneys on here.  Am I looking at this the right way?  I already have a house with a mortgage so I am not worried about having a roof over my head, my wife pays her car payment, I have a company car.  I can afford about 400 dollars a month and that still leaves me 500 or so a month for other expenses like food, gas, electric and the like.  Any other things I should consider before taking this huge step?


Thanks for any help TN
Title: Re: chapter 13 bankruptcy
Post by: sgrizzle on August 17, 2010, 07:01:44 AM
Without knowing specifics, I'm guessing you're saying that your primary issue is with unsecured debts like credit cards, medical bills, etc.

I have dealt with similar issues and listen to a lot of Dave Ramsey, this is what he would suggest in your case:

Create a bare bones budget that includes house, utilities, car payment, food, etc. and figure out how much you have available per month if you aren't paying on these unsecured debts. Ideally you will have $2,000/month or so free. Stick this money in a savings account, shoebox, or whatever.

Once you stop paying credit cards, they will likely offer you some sort of reduced interest or other payment plan. 29% interest becoming 9% and 20% becoming 0% can make a big difference. If no good offers come along that would actually help, then use the money you are saving by not making payments to offer these companies payoff amounts for your card. $50,000 in credit card can be $2,000 in monthly payments, or save up a couple of months and you can offer payoff amounts. 2 months saved ($4,000) might payoff a card with a $5-6,000 balance.

It will probably take 2 years before the credit cards would make any major legal efforts to come after you in which time you might be able to have all of this paid off. Typically the longer it has been since the company has seen a payment, the less they will take to settle it. If it does get to the point that you're headed to court, then you might consider bankruptcy.

Another thing to look at is possibly selling your wife's care and buying a beater, just for a year or two while you pay some of this down.

And yes, 95% of the credit consolidation/counseling services are bogus, the other 5% provide little more help than google does.
Title: Re: chapter 13 bankruptcy
Post by: waterboy on August 17, 2010, 07:57:19 AM
A couple of notes from personal experience. There are no worse traumas in life than death of family members, divorce and bankruptcy. It would be good to get some personal counseling, whether from professionals or friends who are familiar with the issues and ramifications. Then counsel with a good bankruptcy lawyer who specializes in the field.

The hangover from a bankruptcy is long lasting. The credit card companies don't care so much but the more serious financial people and employers remain skeptical forever. Forget a political career if you're a Democrat. ;)

And finally, don't take it too personally. I wore it on my sleeve until a few successful businessmen asked me, "Is it your first?" If you're not taking hits, you're not in the game.

Good luck.
Title: Re: chapter 13 bankruptcy
Post by: Townsend on August 17, 2010, 08:12:49 AM
Have you contacted the creditors already?

They may be willing to work with you if you tell them you're unable to make payments.

They'd rather work something out than not get paid.

It's definitely worth a shot.  Like Grizz said, a change in rate is huge and they will most likely offer you a smaller minimum.  Before you stop paying them, call them.

The next thing to do, if you can, is start paying one card off at a time.  Minimums all around but the smallest one.  As you pay off the smallest one first you then apply that amount to the next smallest and so on.  Believe me, it works.  I hope you don't have to BK.

Good luck.
Title: Re: chapter 13 bankruptcy
Post by: nathanm on August 17, 2010, 08:27:02 AM
If they won't work with you, declare before you stop making payments. The lates look much worse to other creditors than the bankruptcy. It sounds to me like you're in a situation that bankruptcy was made for.

We have such a thing precisely so that you can take risks or make mistakes and not be permanently in debt because it didn't work out. You're not much good to the economy if you're laboring under an unsustainable debt load. Note how many times Donald Trump and his businesses have been in bankruptcy protection. It's the American Way. ;)

The forums at creditboards.com is a great resource for everything credit related, including bankruptcy. Good luck.
Title: Re: chapter 13 bankruptcy
Post by: TUalum0982 on August 17, 2010, 11:38:26 AM
thanks for the advice.  I will check out that forum.  I will also call them today and tomorrow to see if they can help me at all.  I am not so much worried about my credit tanking as I am finding another job down the line.  That to me is the scary thing.  No I dont plan on running for any political office, but I do/did have dreams, and those are probably crushed now once I file this.  But I will call them and see if they can help me out.  If not, I guess bankruptcy is the way to go.  Anyone care to give me a 30K loan that I can pay back 400 dollars a month at a time?!
Title: Re: chapter 13 bankruptcy
Post by: nathanm on August 17, 2010, 11:50:02 AM
Quote from: TUalum0982 on August 17, 2010, 11:38:26 AM
thanks for the advice.  I will check out that forum.  I will also call them today and tomorrow to see if they can help me at all.  I am not so much worried about my credit tanking as I am finding another job down the line.  That to me is the scary thing.  No I dont plan on running for any political office, but I do/did have dreams, and those are probably crushed now once I file this.  But I will call them and see if they can help me out.  If not, I guess bankruptcy is the way to go.  Anyone care to give me a 30K loan that I can pay back 400 dollars a month at a time?!

Don't be so hard on yourself. You'll get through it. Your dreams will survive, although they may take a little more time to realize. BK isn't that bad on your credit, as long as you have one card you can afford to affirm and keep current through the process.
Title: Re: chapter 13 bankruptcy
Post by: TUalum0982 on August 17, 2010, 12:35:40 PM
thanks nathanm on the advice for that forum. I have read through a couple of threads and found some numbers for the diff credit card companies to set up payments directly through them over a period of time.  This will close the account obviously (which I am fine with) and wont impact my credit as much as the bankruptcy would.  I have read from people on that forum they received anywhere from 3-5yrs with rates from 0-6% interest.  I am on hold currently with Chase and will see what they say.
Title: Re: chapter 13 bankruptcy
Post by: izmophonik on August 17, 2010, 01:25:20 PM
It sounds like the same situation I was in about 5 years ago.  I was almost $40K in the hole on unsecured debt making $37K per year.  I had two choices, take the high road and pay everything off in 3,4,5 years or file Chap. 13.  After long thought I filed and on top of that I couldn't sell the house so I walked away from that too.  

Bottom line, if you end up feeling like you can't dig your way out..Chapter 13 isn't entirely going to destroy you if you have a decent career ahead of you.  I make $60K+ now and could care less about what I can or can't get credit for because A.) I'm married and B.) Dave Ramsey

Like Dave says, "the credit score should be called the I like debt score".  It's pointless if you can figure out how to save and not use credit to buy everything.  Now I have a nice home again, 2 NOT NEW cars that are paid for and no unsecured debt.

Good luck either way.  It was definitely a lesson learned for me.
Title: Re: chapter 13 bankruptcy
Post by: nathanm on August 17, 2010, 01:47:35 PM
Quote from: izmophonik on August 17, 2010, 01:25:20 PM
Dave Ramsey
Dave Ramsey is an idiot. The only good part of his message is the part about not getting into debt.

There is nothing wrong with debt, so long as it's used responsibly. If you're carrying debt at less than the rate of inflation, you are saving money by carrying debt. Maybe I haven't paid close enough attention, but I haven't seen him acknowledge that.

If you're using debt to supplement your lifestyle, you're doing it wrong. If you're borrowing money at 0% to buy something you would have bought anyway and leave the cash in a money making investment you're doing it right. Ramsey's no credit card mantra is a good way to be sure you never get advantageous terms on any credit. Back in the bubble period I made thousands of dollars on interest rate arbitrage. I took out over $40,000 in 0-1% debt and piled it all in savings accounts and CDs yielding 6% or more. I've also gotten several thousand bucks worth of gift cards and cash back out of 'em.

Granted, I paid a hell of a lot of money to the credit card companies before it got knocked through my thick skull that paying interest on consumptive purchases is a fool's errand. I've managed to claw back a fair amount of it since then, though.

Then you get into the fraud protection aspect, where credit cards are light years ahead of debit cards. And the car rental insurance. And the travel insurance. And the extended warranty coverage. And the lost item coverage.
Title: Re: chapter 13 bankruptcy
Post by: Gaspar on August 17, 2010, 01:56:15 PM
Quote from: nathanm on August 17, 2010, 01:47:35 PM
Dave Ramsey is an idiot. The only good part of his message is the part about not getting into debt.

There is nothing wrong with debt, so long as it's used responsibly. If you're carrying debt at less than the rate of inflation, you are saving money by carrying debt. Maybe I haven't paid close enough attention, but I haven't seen him acknowledge that.

If you're using debt to supplement your lifestyle, you're doing it wrong. If you're borrowing money at 0% to buy something you would have bought anyway and leave the cash in a money making investment you're doing it right. Ramsey's no credit card mantra is a good way to be sure you never get advantageous terms on any credit. Back in the bubble period I made thousands of dollars on interest rate arbitrage. I took out over $40,000 in 0-1% debt and piled it all in savings accounts and CDs yielding 6% or more. I've also gotten several thousand bucks worth of gift cards and cash back out of 'em.

Granted, I paid a hell of a lot of money to the credit card companies before it got knocked through my thick skull that paying interest on consumptive purchases is a fool's errand. I've managed to claw back a fair amount of it since then, though.

Then you get into the fraud protection aspect, where credit cards are light years ahead of debit cards. And the car rental insurance. And the travel insurance. And the extended warranty coverage. And the lost item coverage.

I agree with Ramsey on many points, disagree on others, but he is far from an idiot.

There is a point (and I've gotten there) where you simply don't want to deal with debt any more.  The only real debt we carry is our mortgage, and we make bi-monthly payments on that.

No matter how well managed or ethical the lender (bank, visa, retail) the game is to make money from your debt, and the rules are not in your favor.  I would simply rather not play the game. 

I don't like casinos either.
Title: Re: chapter 13 bankruptcy
Post by: nathanm on August 17, 2010, 02:03:03 PM
Quote from: Gaspar on August 17, 2010, 01:56:15 PM
No matter how well managed or ethical the lender (bank, visa, retail) the game is to make money from your debt, and the rules are not in your favor.  I would simply rather not play the game.  

I don't like casinos either.
It's not really rigged against you in a way that matters if you pay off your balance each month. All of the banks I deal with automatically draft the money out of my bank account on the due date. (I have them set to take the minimum and I manually pay the rest, just in case of a dispute or fraud I hadn't caught yet)

Since I only use one or two cards a month for expenses (one for personal stuff, the other for work-related stuff), the time aspect is minimal, and as I mentioned previously, it makes me money.

My boss is one of the most pro-cash people ever, but he still uses credit cards simply because he can run a few hundred thousand bucks a year through them buying things he's going to immediately turn around and resell and get rewards out the wazoo. 375,000 frequent flier miles a year will save you a lot of money on airplane tickets. $3,000-$10,000 (depending on what promos run in any given year) in cash is also pretty nice.

Edited to add: He also tells you to do silly things like closing old cards. That's not a good idea unless you're paying an annual fee. Age is one of the big contributors to your score, and whether he likes it or not, your good score gets you cheaper auto insurance, a lower interest rate on your mortgage, and saves you from having to pay deposits on utilities, among other things.
Title: Re: chapter 13 bankruptcy
Post by: izmophonik on August 17, 2010, 02:07:47 PM
Well said.  The point the previous poster made about inflation is really not an intelligent stand to take.  When you pay a credit card company to purchase ANYTHING on your behalf you are losing; every time.  I'll take 5 years on a mutual fund over 5 years on a Discover card at 5% 10%, it doesn't even come close.

Once you realize things like these you'll see that Ramsey is not an idiot.  While sometimes I don't like his evangelical style or a particular strategy, he's got you beat on your credit card vs. inflation argument.
Title: Re: chapter 13 bankruptcy
Post by: nathanm on August 17, 2010, 02:12:35 PM
Quote from: izmophonik on August 17, 2010, 02:07:47 PM
Well said.  The point the previous poster made about inflation is really not an intelligent stand to take.  When you pay a credit card company to purchase ANYTHING on your behalf you are losing; every time.  I'll take 5 years on a mutual fund over 5 years on a Discover card at 5% 10%, it doesn't even come close.
Do the math. If you're paying 1% APR (or 0%, as in no carrying cost at all) and earning 6% APR, you're making money. I'm too risk averse to put the (temporarily) free money in stocks, but insured deposits? That really is free money. How the hell do you think banks make money? They borrow low and lend high.

If you're paying interest and not getting anything for it, you are losing something. Unless you're paying it off in cheaper dollars later, but that's more of an abstract buying power thing. In this near-deflationary environment, you can forget about that one. I'm not interested in carrying debt at the moment, given that it's looking more and more likely that it would be paid off with more expensive dollars later. That still doesn't change the fact that they give me 1-5% back on all my purchases and I pay them nothing for the privilege. It's not as if I pay more to buy that cheeseburger than you do, I just get a nice rebate on the cheeseburger that you don't.

But yes, if you're paying interest and not making more in interest or whatever from it, you're not making money.
Title: Re: chapter 13 bankruptcy
Post by: izmophonik on August 17, 2010, 02:13:47 PM
FYI guys even if you pay the balance off every month you still pay interest on 30 days worth of debt which is compounding interest.  Calculate the dollars it took for your boss to get 375,000 miles.  Chances are he's paid more than those flights are worth in interest on the card over the 12 months.  
Title: Re: chapter 13 bankruptcy
Post by: nathanm on August 17, 2010, 02:14:56 PM
Quote from: izmophonik on August 17, 2010, 02:13:47 PM
FYI guys even if you pay the balance off every month you still pay interest on 30 days worth of debt which is compounding interest.  Calculate the dollars it took for your boss to get 375,000 miles.  Chances are he's paid more than those flights are worth in interest on the card over the 12 months.  
No you don't. Credit cards have a grace period. If you pay them off every month by the due date, you pay no interest. If you learned that from Ramsey, he's a bigger idiot than I thought.

Edited to add: There may exist cards that don't have a grace period on purchases. I haven't ever seen one. If you take a cash advance, you do pay interest from day one.
Title: Re: chapter 13 bankruptcy
Post by: izmophonik on August 17, 2010, 02:22:22 PM
I hate to break it to you but you're not making any money off of Discover.  You do get 5% cashback on SOME purchases..not all.  On top of that you aren't getting 5% compounded.  You're getting 5% simple interest...big difference.  Lastly, Discover is getting your money at 1% - 29% compounded every day.  The credit card companies will not lose money on you.  The only thing you're making is somebody else rich.
Title: Re: chapter 13 bankruptcy
Post by: Cats Cats Cats on August 17, 2010, 02:27:45 PM
Quote from: nathanm on August 17, 2010, 02:14:56 PM
No you don't. Credit cards have a grace period. If you pay them off every month by the due date, you pay no interest. If you learned that from Ramsey, he's a bigger idiot than I thought.

Edited to add: There may exist cards that don't have a grace period on purchases. I haven't ever seen one. If you take a cash advance, you do pay interest from day one.

People get "charge" cards and credit cars mixed up.  They also don't know what a "charge" card really is.  Most think American express  charge cards start charging interest immediately, etc.  You do have to pay them off every month (although they have introduced the option to finance purchases over $250).  I do pay some fees for certain cards for the "rewards".  I only do so if it is in my benefit.  Anyway, debt is a tool.  You can either gain from it or you can lose from it.  No, it isn't like gambling the house doesn't always win (you go bankrupt).  Although, I guess they do always win because they always make money.  You can "make" money as well, its the people with debit cards and pay cash that pay the higher prices due to transaction fees that lose.
Title: Re: chapter 13 bankruptcy
Post by: Cats Cats Cats on August 17, 2010, 02:29:01 PM
izmophonik you have no clue what you are talking about.  You only pay interest if you don't pay 100% within the grace period.  You will then accrue interest on any new purchases the next month.  If you have a bill of $100 and you pay $99.99.  (after the grace period) any new charges that month you will pay your interest rates on those charges immediately.  They used to charge you interest on up to 2 months of new charges but I believe they stopped this with the credit card reform.  As long as you pay it off you don't pay any interest.
Title: Re: chapter 13 bankruptcy
Post by: Gaspar on August 17, 2010, 02:31:29 PM
Quote from: nathanm on August 17, 2010, 02:03:03 PM
It's not really rigged against you in a way that matters if you pay off your balance each month. All of the banks I deal with automatically draft the money out of my bank account on the due date. (I have them set to take the minimum and I manually pay the rest, just in case of a dispute or fraud I hadn't caught yet)

Since I only use one or two cards a month for expenses (one for personal stuff, the other for work-related stuff), the time aspect is minimal, and as I mentioned previously, it makes me money.

My boss is one of the most pro-cash people ever, but he still uses credit cards simply because he can run a few hundred thousand bucks a year through them buying things he's going to immediately turn around and resell and get rewards out the wazoo. 375,000 frequent flier miles a year will save you a lot of money on airplane tickets. $3,000-$10,000 (depending on what promos run in any given year) in cash is also pretty nice.

Edited to add: He also tells you to do silly things like closing old cards. That's not a good idea unless you're paying an annual fee. Age is one of the big contributors to your score, and whether he likes it or not, your good score gets you cheaper auto insurance, a lower interest rate on your mortgage, and saves you from having to pay deposits on utilities, among other things.

We have caught Chase, Capital One, and Barclay(Apple Credit) in mistakes and double charges on our cards several times.  Especially Barclay!

Changes in rules and rates on cards that you no longer use can negatively affect your credit.  Reducing the amount of revolving debt and closing higher interest cards that you no longer use will positively affect your score.  "Activity" on a card is viewed healthy and responsible.  "Inactivity" or idle cards score negatively.

Keep your oldest accounts open, but only if they offer a reasonable rate.  If you are offered a better rate, contact your existing credit card and attempt to bargan with them.  Threaten to close the account if they do not lower your rate.  This works about 110% of the time.  If you are like me pay off your balance each month, mention that you are considering making a big purchase and want to do it on the card that gives you the best interest rate.  This make them super horny.

The less you use a card the more that card company will market to you in attempts to get you to use their service.  Each time they increase the amount of materials sent your way for marketing purposes, they increase the opportunity for fraud and identity theft.
Title: Re: chapter 13 bankruptcy
Post by: izmophonik on August 17, 2010, 02:39:20 PM
Two words:

Pay Cash.

Mutual funds are paying me more money than any of you fools think you make by using plastic.

Enjoy.
Title: Re: chapter 13 bankruptcy
Post by: nathanm on August 17, 2010, 02:53:29 PM
Quote from: izmophonik on August 17, 2010, 02:39:20 PM
Two words:

Pay Cash.

Mutual funds are paying me more money than any of you fools think you make by using plastic.

Enjoy.
I fail to see what your mutual fund has to do with anything. The same amount of money goes out the door whether I pay cash or use a credit card, so long as the card(s) is/are paid in full each month. I just get some extra back for using the card.
Title: Re: chapter 13 bankruptcy
Post by: izmophonik on August 17, 2010, 03:06:28 PM
We're not translating Mayan script here.  You pay cash, save/invest and don't use credit cards.  The results are obviously on the up side.  If you use credit cards, you're obviously not making the most out of your money.
Title: Re: chapter 13 bankruptcy
Post by: nathanm on August 17, 2010, 03:17:00 PM
Quote from: izmophonik on August 17, 2010, 02:22:22 PM
I hate to break it to you but you're not making any money off of Discover.  You do get 5% cashback on SOME purchases..not all.  On top of that you aren't getting 5% compounded.  You're getting 5% simple interest...big difference.  Lastly, Discover is getting your money at 1% - 29% compounded every day.  The credit card companies will not lose money on you.  The only thing you're making is somebody else rich.
If you have a credit card, I strongly suggest you read your agreement. Everything you stated is incorrect. The interest compunds monthly if you don't pay it off each month. You pay zero interest if you pay in full each month.

Do I really need to provide my statement to prove this to you?

To take my boss as an example, he pays a $35 annual fee on his starwood amex credit card (it's worth it for the extra .25 miles a dollar) and gets north of 300,000 miles a year while paying zero interest because he pays in full each month.

Google 'credit card grace period'.
Title: Re: chapter 13 bankruptcy
Post by: Cats Cats Cats on August 17, 2010, 03:30:33 PM
Quote from: izmophonik on August 17, 2010, 03:06:28 PM
If you use credit cards, you're obviously not making the most out of your money.

This is why I laugh at Dave Ramsey.  The goal isn't to make you have money.  The goal is to keep you afloat so you can keep tithing.  If I had "waited" until I had the cash to buy a house, buy inventory for my business, etc.  I would still be doing nothing but making 2% (if I got lucky) on a CD.  It would probably be another 10 years before I would be able to start building a business.  Then I couldn't expand using credit so I would have to rely solely on income to operate.  If I ran low on cash one month?  Lets just shut down the business, its over. 
Title: Re: chapter 13 bankruptcy
Post by: nathanm on August 17, 2010, 04:02:52 PM
Quote from: Trogdor on August 17, 2010, 03:30:33 PM
This is why I laugh at Dave Ramsey.  The goal isn't to make you have money.  The goal is to keep you afloat so you can keep tithing.  If I had "waited" until I had the cash to buy a house, buy inventory for my business, etc.  I would still be doing nothing but making 2% (if I got lucky) on a CD.  It would probably be another 10 years before I would be able to start building a business.  Then I couldn't expand using credit so I would have to rely solely on income to operate.  If I ran low on cash one month?  Lets just shut down the business, its over. 
Yes, when used responsibly debt can make you a lot of money. One of my clients has borrowed over a billion dollars over the years to buy, start, and expand businesses. I strongly doubt there is anyone on this forum with even a quarter of his net worth.

That doesn't mean that the use of debt to finance consumption is in any way a good idea. No matter how much you borrow, you still only have whatever you've got coming in every month to spend, since you gotta pay the money back at some point. Obviously it doesn't help your cash flow any if you're spending part of that income on debt service and that outstanding balance isn't bringing in more than you're paying in interest.
Title: Re: chapter 13 bankruptcy
Post by: GG on August 17, 2010, 06:45:25 PM
Check these folks out, they are the real deal.  BBB Accredited

http://www.debtreductionservices.org/location-tulsa

They will get your interest rates reduced and you make one monthly payment.   

I know some people who have had great success with them.   

They are a non-profit.   
Title: Re: chapter 13 bankruptcy
Post by: TUalum0982 on August 17, 2010, 10:19:51 PM
thanks for the info everyone.  Greatly appreciated. This time last night, my only thought was bankruptcy after researching online.  Today is a different story.  Reading on the forums mentioned above and making a few phone calls made quite a bit of difference.  I called Chase and though they closed the account, they lowered my payments to 165 month with 2% interest for 5yrs instead of 13.49% and a minimum payment of 189.  No prepayment penalty and shouldnt affect my credit too negatively.  Time will tell I guess.  Now if the other lending institutions will be as helpful as chase was!
Title: Re: chapter 13 bankruptcy
Post by: Conan71 on August 17, 2010, 11:30:08 PM
Quote from: nathanm on August 17, 2010, 04:02:52 PM
Yes, when used responsibly debt can make you a lot of money. One of my clients has borrowed over a billion dollars over the years to buy, start, and expand businesses. I strongly doubt there is anyone on this forum with even a quarter of his net worth.


It's kind of gauche to make comments like that. But the last member who is likely wealthier was banned   See what it got him/her?
Title: Re: chapter 13 bankruptcy
Post by: Cats Cats Cats on August 18, 2010, 07:45:48 AM
Quote from: Conan71 on August 17, 2010, 11:30:08 PM
It's kind of gauche to make comments like that. But the last member who is likely wealthier was banned   See what it got him/her?
A lot more free time.
Title: Re: chapter 13 bankruptcy
Post by: BKDotCom on August 18, 2010, 07:55:11 AM
Quote from: izmophonik on August 17, 2010, 03:06:28 PM
We're not translating Mayan script here.  You pay cash, save/invest and don't use credit cards.  The results are obviously on the up side.  If you use credit cards, you're obviously not making the most out of your money.
Like the others have said, this is complete bunk.
If you pay your statement off in full by the due date : no interest.  I haven't payed interest in 10+ years.   And if you have a rewards card... well the upside is definitely on the side of the plastic.  Plus all the protection/insurance that plastic provides.
Is spending your hard-earned money on crap you don't need a good idea?  No.   But I can do that with cash just as easily as with credit card.    Spending is spending.   Stay well within your means.

Do you keep your cash in a bank, or under your mattress?
Title: Re: chapter 13 bankruptcy
Post by: nathanm on August 18, 2010, 08:16:19 AM
Quote from: Conan71 on August 17, 2010, 11:30:08 PM
It's kind of gauche to make comments like that. But the last member who is likely wealthier was banned   See what it got him/her?
It's called an example, sir. An illustration of how borrowing money can be profitable, whether through interest rate arbitrage or through borrowing it to buy/start/expand a business. An illustration of the insanity of a hard line "debt free" stance. (as opposed to the position that borrowing for consumption is a bad idea, which I think everyone can agree on)

TUalum, that's great news. It's nice to see someone getting the benefit of the ridiculously low federal funds rate! :)
Title: Re: chapter 13 bankruptcy
Post by: Cats Cats Cats on August 18, 2010, 09:23:02 AM
Quote from: BKDotCom on August 18, 2010, 07:55:11 AM
Like the others have said, this is complete bunk.
If you pay your statement off in full by the due date : no interest.  I haven't payed interest in 10+ years.   And if you have a rewards card... well the upside is definitely on the side of the plastic.  Plus all the protection/insurance that plastic provides.
Is spending your hard-earned money on crap you don't need a good idea?  No.   But I can do that with cash just as easily as with credit card.    Spending is spending.   Stay well within your means.

Do you keep your cash in a bank, or under your mattress?
Actually with the rewards cards/credit cards in general we ALL end up paying higher costs due to the cost of accepting the cards in the first place.  Those with cash are subsidizing us with CC.

Mutual funds with their 2% ROI over the last 10 years is where its at!


Title: Re: chapter 13 bankruptcy
Post by: Cats Cats Cats on August 18, 2010, 09:28:39 AM
Quote from: TUalum0982 on August 17, 2010, 10:19:51 PM
thanks for the info everyone.  Greatly appreciated. This time last night, my only thought was bankruptcy after researching online.  Today is a different story.  Reading on the forums mentioned above and making a few phone calls made quite a bit of difference.  I called Chase and though they closed the account, they lowered my payments to 165 month with 2% interest for 5yrs instead of 13.49% and a minimum payment of 189.  No prepayment penalty and shouldnt affect my credit too negatively.  Time will tell I guess.  Now if the other lending institutions will be as helpful as chase was!

Sorry for the thread drift.  Get rid of cell phone, cable, internet.  $50 a month is an extra $1.25 in interest on high rate cards.  or -$1.25 a month if you use it to pay off debt.  So keep on calling, I would suggest refinancing a home if you had a lot of equity in it.  However, you probably would have a lower credit score and higher rate.  "Refinancing" to reduce debt got a bad name due to everybody 1) taking out way more than their house was worth and 2)  Getting an ARM with the lowest interest rates in history.  Obviously refinancing would depend on your circumstances and total debt vs equity.
Title: Re: chapter 13 bankruptcy
Post by: nathanm on August 18, 2010, 09:32:01 AM
Quote from: Trogdor on August 18, 2010, 09:23:02 AM
Actually with the rewards cards/credit cards in general we ALL end up paying higher costs due to the cost of accepting the cards in the first place.  Those with cash are subsidizing us with CC.
Cash has a significant cost also. It takes more time and effort to deal with, whether it be at the register or counting the cash at the end of the day and taking deposits to the bank. You're also taking on the risk of counterfeit bills. If it were that much more expensive, businesses would not take credit. At least not the ones who care about their bottom line.

That's not to say cards don't have their own cost. There is a cost involved in training employees in such a way as to reduce the chance of losing a charge back, after all, but other than checking the signature on the back of the card against the slip or electronic signature, it can all be automated.

The point being that it's not so clear cut. Except perhaps with Amex, because they charge an arm and a leg compared to Visa and MasterCard. And the small businesses are the ones that get screwed the most on fees, which is why I try to remember to get some cash when patronizing a local establishment.
Title: Re: chapter 13 bankruptcy
Post by: Gaspar on August 18, 2010, 09:56:37 AM
Something to note.  The new financial regulation bill gives businesses the right to offer discounts for cash again.  This practice was suspended years ago because it encouraged transactions that were not as transparent to the IRS.  Many businesses went from offering discounts to just setting minimums for CC purchases.

Now businesses can post a % discount for using cash over credit card.  This is a huge incentive for businesses to promote cash purchases.  It is also a big hit to the CC companies who budget much of the margin made on vendor charges to perks like "cash back" and "miles."  Depending on it's impact, CC companies may suspend perks to make up the difference.

Best of all, businesses used to be slaves to the CC company, the verifier company, and/or the bank for additional fees that, by law, they could not recoup from their customers.  Now, I think you will see businesses simply add 3%-5% to their price lists with the caveat of a 3%-5% discount for cash.

Title: Re: chapter 13 bankruptcy
Post by: Conan71 on August 18, 2010, 10:08:03 AM
Just FYI the tag agencies are upcharging on CC transactions.
Title: Re: chapter 13 bankruptcy
Post by: Townsend on August 18, 2010, 10:17:57 AM
Quote from: Conan71 on August 18, 2010, 10:08:03 AM
Just FYI the tag agencies are upcharging on CC transactions.

That's another subject...Why do we have tag agencies?


Anyway, congrats on your first step lowering a credit car payment.

I hope they all go well.
Title: Re: chapter 13 bankruptcy
Post by: Hoss on August 18, 2010, 11:29:47 AM
Quote from: Conan71 on August 18, 2010, 10:08:03 AM
Just FYI the tag agencies are upcharging on CC transactions.

They've always done this, unless you're using Discover (which I don't understand).

It's one of the few paper checks I still write (my car tag).
Title: Re: chapter 13 bankruptcy
Post by: Gaspar on August 18, 2010, 12:31:25 PM
Quote from: Conan71 on August 18, 2010, 10:08:03 AM
Just FYI the tag agencies are upcharging on CC transactions.

I noticed that the other day.  Charged me an extra $1.
Title: Re: chapter 13 bankruptcy
Post by: nathanm on August 18, 2010, 02:12:47 PM
Quote from: Gaspar on August 18, 2010, 09:56:37 AM
Something to note.  The new financial regulation bill gives businesses the right to offer discounts for cash again.  This practice was suspended years ago because it encouraged transactions that were not as transparent to the IRS.  Many businesses went from offering discounts to just setting minimums for CC purchases.
They've always had the right to offer cash discounts. What the merchant agreements didn't allow was charging more for credit cards. It's a matter of semantics, but it makes all the difference to staying within your agreement. You could say "cash discount: 2%" or whatever. You could not say "Credit card surcharge: 2%".

The finreg bill also forced the merchant banks to allow establishments to set a minimum purchase limit on credit card transactions.

The interesting thing is that it was only Visa and Mastercard that outright refused to allow merchants accepting their cards to charge extra for credit. Amex's agreement just states that you can't treat Amex worse than other card companies. Discover has never cared one whit either way, which is why tag agencies could take it and charge a surcharge.

Although I attempt to have cash for the local folks, if they try to charge me more or require a minimum purchase, I won't shop there anyway. Sometimes I just don't have cash on hand, and it's usually a heck of a lot more convenient to find another place to buy whatever than it is to go to a bank.