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Old 11-05-2016, 11:54 AM
 
Location: Central Massachusetts
6,533 posts, read 7,021,977 times
Reputation: 9275

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Quote:
Originally Posted by jasperhobbs View Post
Um, if you read the terms of the credit card, it does say what interest rate will be on purchases. It is up to the individual to go with it or not.
It does not matter what the terms say. One late payment and the interest rate jumps. Fees apply and it begins a vicious cycle.

Quote:
Originally Posted by dothetwist View Post
Me, too. Other than extraordinary circumstances where health care issues and costs within a family (not mentioned by OP), people who file bankruptcy are deadbeats. And they often do it more than once. The system is a joke. I have a sister who did it TWICE in 15 years, and a neighbor who is in her 2nd bankruptcy. They laugh when they talk about, like WE'RE the chumps for paying our bills. PS: They both have the most beautiful furniture, clothing, home furnishings. And their only 'health care' issue is that they are both shopaholics.

Other who say, oh, the banks right this off, etc.....baloney! Those of us who borrow or charge items, WE pay for these deadbeats in the form of higher interest rates, fees. No free lunch.

Yes the banks write that off in their taxes. That does mean we pay for it. I still say he should do it. In his case I do not think he is a habitual offender of bankruptcy. In fact I doubt he will ever be in a position to amass that much credit card debt again. If he were in his 30s that would be different but he is in his mid 70s. No sense in trying to pay that off. He could never possibly do it in a million years. So what would you suggest? Have sons and daughters pay it off? Do you want to send him to prison to pay it off? Good golly man why on earth do you not have a little compassion for someone who is probably been dealing with this debt that just steadily grew. I bet that most of the debt and by most I mean more than half is interest and fees. On a 50k CC debt I am willing to guess that about half is what he actually owes if that much. The rest would have been fees and interest and then interest on those fees and fees for the interest.

Quote:
Originally Posted by jlawrence01 View Post
If the guy lives only on social security, why bother with bankruptcy? They cannot collect what you don't have and at this point, there are no debtors' prisons.

In this case you need to do that so that creditors will stop calling.
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Old 11-05-2016, 12:14 PM
 
372 posts, read 519,983 times
Reputation: 598
Quote:
Originally Posted by jasperhobbs View Post
Maybe that is a big part of the problem, there not being shame in doing it. No one forces a person to run up credit card debt.

I guess I am old school and believe in paying off debt.
So do I. That's why I used the equity from the sale of my home to pay off as much debt as I could. When it ran out, I was faced with two choices: Either pay the rent and put food on the table or file for bankruptcy. Even my counselor at CCCS told me at our first meeting I needed to file, but I wanted to try and do the right thing.
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Old 11-05-2016, 12:19 PM
 
Location: Northern panhandle WV
3,007 posts, read 3,115,454 times
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Quote:
Originally Posted by jlawrence01 View Post
If the guy lives only on social security, why bother with bankruptcy? They cannot collect what you don't have and at this point, there are no debtors' prisons.
Because if you just let it ride, the companies will eventually write it off, at which point the IRS steps in and you then owe taxes on the "forgiven" monies. It can be a lot, and they can attach your SS which other creditors cannot.
IF you file for and are granted Bankruptcy the debt is forgiven but the IRS does NOT tax you on the amounts forgiven.
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Old 11-05-2016, 02:42 PM
 
16,368 posts, read 30,120,091 times
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Quote:
Originally Posted by arwenmark View Post
Because if you just let it ride, the companies will eventually write it off, at which point the IRS steps in and you then owe taxes on the "forgiven" monies. It can be a lot, and they can attach your SS which other creditors cannot.
IF you file for and are granted Bankruptcy the debt is forgiven but the IRS does NOT tax you on the amounts forgiven.

If the individual has minimal income, there will be little or no tax liability. Also, how many credit card companies issue 1099s for bad debt? That is more of a mortgage phenomenon.
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Old 11-05-2016, 05:34 PM
 
361 posts, read 735,111 times
Reputation: 506
Default Update, sort of...

Thank you, everyone who responded.
Chapter 7 will not work for him. In his state, he would lose his home, which is worth more than the debt bankruptcy would discharge.
The county credit counseling service had said they would get back to him, but they have not done so.
He really needs to reach out to them again.
I would like to get him on some kind of repayment plan even though he does not have a lot to work with.
It is regrettable that so much credit was extended to him, as he is retired. He does understand that he is solely responsible for this mess.
I will continue to work with him to get his house in shape.
Spent a few hours working there today. Wish he lived closer!
I'm determined to help him resolve this.
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Old 11-05-2016, 05:47 PM
 
Location: Myrtle Creek, Oregon
15,293 posts, read 17,596,896 times
Reputation: 25230
Most of that $50k is interest and late charges. The credit card companies will forgive that if you offer to settle for the principle. Quit making payments right now, then get the agreement in writing before sending them any money. Social Security and retirement accounts cannot be garnished, so they are SOL for getting their money through the courts.
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Old 11-05-2016, 08:42 PM
 
3,657 posts, read 3,268,883 times
Reputation: 7028
Quote:
Originally Posted by HarryLou View Post
I want to find a way to help my mid-70s brother who has $50K+ in credit card debt. He is a widower who understands he has emotional issues that caused this mess. He told me that he sought help at the county credit counseling agency, but they were unable to help because of insufficient income to cover payments -- after consolidation I guess. He also tried to obtain a reverse mortgage, but his house is not in good enough shape. I'm working with him on the house as I am able, but wanted to reach out for any suggestions that would help work toward a solution. He will reach out to each creditor to obtain a figure they would settle for. What are his options?... does he even have any options? Thank you in advance for any advice.
Don't burden yourself with becoming an expert on the situation, you should get professional advice on this from an accountant who is a CPA. Because an accountant would be the only professional in this scenario that would be your brother's advocate on what is the best way to proceed for him.
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Old 11-05-2016, 09:07 PM
 
Location: Lower Eastside
402 posts, read 972,597 times
Reputation: 370
Quote:
Originally Posted by jasperhobbs View Post
Maybe that is a big part of the problem, there not being shame in doing it. No one forces a person to run up credit card debt.

I guess I am old school and believe in paying off debt.

I too believe in paying off debt, but ran into trouble just living. I have filed for and am under a Ch 13 plan which IS PAYING my DEBTS without the interest.
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Old 11-05-2016, 09:42 PM
 
Location: TN/NC
34,882 posts, read 30,982,886 times
Reputation: 47220
Quote:
Originally Posted by HarryLou View Post
Thank you, everyone who responded.
Chapter 7 will not work for him. In his state, he would lose his home, which is worth more than the debt bankruptcy would discharge.
The county credit counseling service had said they would get back to him, but they have not done so.
He really needs to reach out to them again.
I would like to get him on some kind of repayment plan even though he does not have a lot to work with.
It is regrettable that so much credit was extended to him, as he is retired. He does understand that he is solely responsible for this mess.
I will continue to work with him to get his house in shape.
Spent a few hours working there today. Wish he lived closer!
I'm determined to help him resolve this.
He needs to speak to a bankruptcy attorney.

Chapter 7 is usually used to liquidate all unsecured creditors, if you qualify. If he has a mortgage, he could reaffirm it. The mortgage lender would probably be somewhat relieved that the other debt is gone so he can pay his mortgage more reliably, if he has a mortgage.

It sounds like you all do not have the legal expertise to be making these sorts of decisions.
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Old 11-05-2016, 10:00 PM
 
Location: Traveling
7,020 posts, read 6,241,638 times
Reputation: 14658
When I recognized that the company I was working at was downsizing when the recession began I started paying down my credit cards. What did me in was being laid off at 55 and not being able to find a new job.

My cc debt was very low but my mortgage was high. I finally couldn't pay it & filed bankruptcy. It saved me.

I tried hard to work with the mortgage company but they wouldn't do it. I was/am so proud of our Lieutenant Governor for taking them to court & winning. Sure, we didn't get much but they at least were put on alert.
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