Thursday, November 20, 2008

Credit Counseling

OK - so, as you very well know, I had a bit of a breakdown last week. I called Employee assistance counseling in tears over everything. I didn't know what to do, where to turn, how to "cope" when my "net" paycheck post paying off the overdrafts caused by the garnishment is going to be $35.

I was told I ABSOLUTELY POSITIVELY MUST file for bankruptcy. That evening, my good friend also told me I MUST IMMEDIATELY file for bankruptcy. Honestly? I'm completely freaked out by the possibility that if I did file for bankruptcy with my current income and come up with a payment plan; but then my health continues to deteriorate, that I won't be able to fulfill that payment plan; and I can't file for bankruptcy again; and I'll be in even worse shape. That's my fear. If I can put off filing for bankruptcy until SOMETHING is figured out about my health, if I was even diagnosed, or had a remote clue how bad this is going to get. Remember ? It was just four years ago Thanksgiving, when I was in pain, I was managing to get along; but within HOURS, I had to go the the ER and then into Intensive Care. I don't know what this is, but I do know that it has the potential to go from bad to REALLY, REALLY bad in little to no time. Last time I went through the same symptoms I have now, I ended up virtually bed-ridden for three months - three months without pay.

So, anyway, no matter what I do, my EAC strongly suggested I get Credit Counseling to get my budget in order. OK, well, I've got a budget... if I do the credit counseling, and they have any "fixes" for me, I'm all for that. Oh, but I was warned when they set up the appointment, that I should "gather together all my bills" - um, yeah, they're together. For the past four months (while I've struggled with overdrafts, garnishments, and a move)... I've been budgeting virtually to the nickel. They're "gathered" already.

So, last night, I had my credit counseling. There were two things...

One, she couldn't believe my kids & I weren't starving on $100 a month for groceries. Now, honestly? I'd like to spend more than $100 a month for my groceries. It's been VERY hard work for me to get our budget that low. I don't want to make everything we eat from scratch. I don't want to eat macaroni & cheese once a week (well, ever). I don't want to eat potatoes instead of steak... so that "a" can have more meat. But, I'm making do. We can eat canned fruit instead of fresh fruit. We don't have to have pizza. We don't have to have steak. But, it would be nice to have hamburger more than twice a week (as in, in something)... vegetarian chili isn't my favorite.

Second, I'm paying too much money for bank charges, overdraft charges, etc. Huh? You think? Yeah, I knew that. I'm doing everything under the sun, including eating on $100 a month to try to avoid it... Like taking out 401K money thinking it would stop the hemorrhaging... just to have another garnishment take me right back to the beginning.

Otherwise, my budget is good. If I wasn't being garnished & overdrawn every couple of paychecks... I should be able to afford not only my bills & expenses... and money towards debt. Hmmm. Really? I knew that. So, want to know what her recommendation is instead? Stop working with my creditors and just let them garnish me. ???? HUH?

Well, since only one company can garnish at a time... the others will just call me constantly over not making payments... but then I'd know whats going on every month. Seriously? This is the suggestion?

Here's what I was doing.... I was making a "good faith" payment. It wasn't as much as most of them wanted per month. But, it was a payment. I had a dozen creditors at the time, and it was $100 per creditor. Since the majority of them wanted $300-$450/month. Most of them were NOT happy. I got called continuously. I repeated myself endlessly. They complained constantly. AND? I STILL got garnished.... When I got garnished (at that time it was payroll at $550/twice a month)... I couldn't afford to pay my other creditors. Which ticked them off. And escalated the "punishment" of creditor calls. To the point where I didn't want to deal with them anymore. THAT's WHY I went to this debt settlement company.

So, I signed a contract - sent all the statements from the creditors still in contact with me. The settlement company contacted all of them, gave them my signed power of attorney, and told them to cease and desist collections from me. I've got a couple of them still sending me bills, but I just forward them to this company. Silence. No haranguing ... no endlessly repeating "I can't afford to pay that much". (Like that doesn't make you feel awful).

Here's the issue - I've lost track of who's collecting for a couple of them. They aren't contacting me anymore. They aren't calling, they aren't sending me notices, and ... point in fact, they then garnished my checking account - admittedly, I did get served notice on that one (didn't remember, and can't find it today)... but I did get notice. Last time I got garnished, it happened without warning... notice showed up about five days after I got garnished. Since this company wasn't in contact with me, I didn't give their information to my settlement company... since the settlement company didn't know who to notify, they couldn't.

Everyone keeps telling me that I should stop working with this company. But this company has done more good for me already than anyone else. They stopped the harassing phone calls. They are negotiating down the debt I owe so that when all is said and done (god, I hope we get there)... the amount I will have paid even including their fees is less than I would have to pay either paying $100/creditor/month (and getting garnished) OR via bankruptcy OR via "just let them garnish you". Yes, I am paying a fee, but 75% of that fee has been paid. The service they provide is that I don't have to deal with the collectors. This is a good option for people under stress, like I. I know that bankruptcy will give me the same benefit, only now I have to go start over with paying the lawyer his fee... AND, if things get tough? Bankruptcy won't "give" if I get ill and can't work anymore. This settlement company? They'll work with me and adjust my payments accordingly. AND, if in the end, things get REALLY, REALLY bad? I can then file for bankruptcy, only if I'm not working? Then I would qualify for a Chapter 7 and even if the debt isn't erased, it would still be reduced. To me? That's a much better option than filing for bankruptcy now. If my health wasn't at risk, then maybe, I would be more open to filing now -- but I am worried about getting locked into something and then things really fall apart. Like they did four years ago and again two years ago.

The one good thing that did come out of the counseling - is that she did come up with the solution for how to discover who owns the debt currently. It'll be a lot of work... but to call the original creditor, they should tell me who they sold the debt to... call them, find out who they sold the debt to... and so on and so forth until you find the current collection agency. If I can get the current contact information for the three or four debts currently "on hold" at the settlement company because they don't know who to contact... I should be able to get the cease & desist orders out and hopefully no one else will try to garnish me. This is important, because it's only by being able to set aside some money every month that I can make a "bulk payment" and get some of the creditors to agree to accept less money. To date, everyone who has been contacted by this settlement company has abided by the process... so, the key is finding the last few.

So, this week, I'm calling the settlement company and getting their list of whom they haven't contacted yet (might ask who they have just in case it helps me decipher the puzzle). This weekend I dig through all my old paperwork to get phone numbers & account numbers from the original accounts.... might be tough, I tossed some knowing they'd been sold to collections... but find what I can find... and then start making phone calls.

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