A financial question for a friend
I have a friend who just stopped paying his credit cards off..He said he owed less than 1,500 all around, and he too is getting someone to by his house on a Short Sale..if the mortgage company will agree..so far it seems they are jerking him and the would be buyer around and have for 6 weeks now.
He also had a personal loan, under 10,000.00 with CitiFinancial.
He does NOT want to be a dead beat..he wants to pay his bills. Heres the problem.
He has a real partial disability which he got in the service. He is in his 50s...No kids to support anymore, they all moved out...its just him and his wife. His job cut his hours from 46 hours a week, to 30 or less some weeks.
He has called everyone and tried to explain...he can not make full payments..only partial. They did not want to listen..hence the credit cards he stopped paying.
CitiFinancial agreed to take half payments...but REFUSED TO PUT IT IN WRITING...And now they refuse to take that and state they never told him any such thing..its a lie..hes just to lazy to pay them.
They are saying they are going to wipe out his bank account, and take his car...which is 15 y/o and long past paid for...his furniture..and his entire paycheck till the balance is now paid off..(depending on who he talks to the balace owed is between 6,000.00-15,000.00
I typed a letter for him that he faxed to them stating he was trying to work with them, but stated reasons only partial payments could be made, giving them 10 days to agree or bankruptcy would be filed.
The problem is...if he files Chapter 7, the person trying to get the house will be screwed because the house will have to be added to it. He doesnt make enough to get a lawyer, and to much to get legal aide...hes trapped...
He has checked with other companies that say they can wipe out the debt..but they want between 2,000 to 5000 and he only has about 200..and they refuse payments.
Dpression is taking it toll on his mind and body. Like Quick Sand Syndrome.
He knows they will be taking him to court..and they will get a judgement and go after his account...and he knows when that happens, he wont be able to pay his power bill..or rent..or buy food.
This man has served his country, worked about 37 years he says for nothing, because its all gone. He has no one he can turn to ask for help, and would refuse money from anyone. He just wants to live in peace and pay his debt.
he does not have a computer anymore, and would kick my butt to high heaven if he knew I was asking for help for him...
The kind of help Im asking for is suggestions on what can be done to stop CitiFinancial from destroying him.
He lives in WNC near by...I could just look up what Im told..print it out and give him the info..
Thank you all
Do you want help or not?
Humour me. I have learned a lot in the past year. I did not mention credit clean up in my post. I did mention debt elemination (big difference). And the company I refered to in my e-mail does take payments. In fact, if given permission, I can give you the names of some others that are currently useing this company, but only with their permission. I can further help reduce his monthly payment by waiving my commission as I work as a rep for this company. I am not all about making that FRN. I am about helping those who need it. So, bitchy or not, buck up, help your friend and check your mail.
YOUR servant for freedom, Clay Carey
Hey, I'm a banker, not an IRS agent...
I'm just telling of my understanding. Once the shortsale, or BK, or whatever is done, I believe that if you can basically prove your insolvency (financial statement), you are relieved of the IRS obligation. Like I said, consult a CPA or tax attorney to verify.
Off subject, sort of. And
Off subject, sort of. And please, please forgive my sense of humor. I can not possibly hold this back any more...sorry :)
Banker, IRS agent, thief, what's the difference? LOL LOL
I couldn't help it.....forgive please!
Sounds right, except for BK
I believe that in bankruptcy any debt forgiveness will not become 1099 income subject to tax.
However, a regular short sale outside of bankruptcy may generate a 1099. Homeowners will need to prove their insolvency to the IRS, which shouldn't be hard in this case.
See also IRS form 982 and instructions on what becomes taxable:
http://www.irs.gov/individuals/article/0,,id=179414,00.html
melgesman is right...
don't believe the commercials where they say that even if you file BK you are still liable for the debt. That's horsecrap. The only thing you may be liable for is if you owe more on your house than what it is sold for=the IRS can bill that as income if the bank takes a loss-gotta love the Gov't/Bank relationship- this can be overturned too, but you should consult a CPA or tax pro. Stop paying, get a BK attorney, and let everything go. If they don't have substantial equity in the home, they can even keep the home if they choose to. Most BK attorneys will give you advise before you even hire them. BK's can be overcome. Once the BK is discharged, go to any bookstore, or Ebay, etc., and buy a credit repair course-they are cheap. Under the FCRA, dispute all items except the BK with reasons such as, "never owed this amount, never had this account #, etc." If the bureau can't verify, they must delete it. It may take months of redisputing to finally get everything off that was included, but it can be done. The last step is to dispute the BK. It can be removed. In today's environment, BK is very normal. I am a Banker, but am very anit-FED. Use the FCRA laws to your advantage.
Couldn't the IRS then come after you for forfeiture though?
Couldn't they just make a default claim against you, in order to demand forfeiture and therefore steal your assets?
Basically the IRS gets away with this all the time....If you're already paying taxes to them, of course. If you haven't then they can't get away with stripping you of your assets......
Thank you all
Thank you all for your help
To answer the mortgage question:
No..he can not keep the house..the mortgage...power bill that comes with the house..the up keep...He just cant do it...All that alone would take over half of his paycheck..just to make a payment..forget about catching up..cant be done..(Also he can not rent it out to make the mortgage, not here, we face close to 20% unemployment here..the short sale is his best option...)
No he can not and will not take out a 2nd mortgage or do a refi..That would just he said feed more to the banks (when that bailout past..he said F**K IT THEY CAN ALL GO SCREW THEMSELVES..and he meant it)
No..he can not take out a loan to pay off the other debts and catch up on the house and make the repairs
No he can not live with the kids and pay rent They live about 2 hours from his job and the kids have kids.
He and his wife have taken a small place.
His choices are:Get screwed or Do the screwing
To that guy that said he was going to email me....Last year you did. You sent me all kinds of info on companies that clean up credit..I called them all...I didnt have the 5000.00 to give them...(500 in some cases) and neither does my friend. You told me these companies would take payments...They do not..One lump sum or nothing so please do not waste your time emailing me that stuff again. I dont mean to come off bitchie but...I believe in being straight forward, up front and honest, and if people take it wrong..I cant help that..guess its a price they pay for not being use to hearing an honest reply.
Freedom is another way to God...A corrupt government is a straight way to hell.
I believe in Hope & Change..I Hope the government will Change
Spindale-Rutherford County-North Carolina
Sorry, I don't have
any advice but can give a bump and bookmark in case I have this problem, thanks for sharing. We are all here to learn and share.
Prepare & Share the Message of Freedom through Positive-Peaceful-Activism.
Misfit4Peace .....
Check your e-mail in the morning!!!
2 years ago, I was where your friend is.
I am now debt free, including my home and land.
The "key" is knowing how the bank system works and finding out who the holder in due course is concerning these debts.
DO NOT file a bankruptcy, it will not help with the CC debt anymore. Although by doing so it will delay any collections until you can get them eliminated. Focus on bringing mortgage current, forget other bills.
If sued, they will have a copy of the "alleged" contract as their main evidence against your friend. Under no circumstance admit that the 'copy' is signed by you. When looking at it, tell the judge that it looks like a very good forgery or copy...that’s what it really is! a copy, nothing more!
This opens the ground to require the 'lender' to prove he still has the original note. (which if it is a bank loan or a CC, they don't. They sold it to finance your loans and the stamps on the loan papers will prove it! They will not bring it into evidence.
As for the mortgage there are six questions to ask the lender in a letter. The lender won't answer. You send second request, the lender won't answer. You send third and final request, the lender won't answer. You file to get questions answered in court. The lender WILL settle before going to court. Usually by offering to reduce the balance on the mortgage by half and re-writing the contract.
Bottom line..all lenders deserve to be paid back. Your friend was his own lender. He deserves to be paid back.
YOUR servant for freedom, Clay Carey
For those that don't know....autos CANNOT be repoed just because the company has a 'paper' from the bank. They MUST have a court order to repo or they are in violation of the law and you can sue them.
couldnt he just put
a morgage or a 2nd morgage on his house, payoff the credit card company maggots to get them off his back and then pay off the morgage?
first thing i would do is
first thing i would do is change banks if he is banking with the same bank.
there is very likely some fine print in the loan that allows them to take money out of our account, without first having to take you to court.
next thing is to get a new phone number.
that stops the harassment from the bill collectors. you can try to tell them to "send it to you in writing," and then keep hanging up, but they usually don't listen. most states have cease and desist protections against harassment, even if you do owe them the money.
if the bill collectors are unsuccessful in their attempts to collect, they make take him to court if the debt is sufficient. usually the bill collectors will try collecting for a year or so but so many people are defaulting on their loans right now that the banks simply do not have the man power to handle it.
finally, take a breath and collect your thoughts. prioritize.
THIS IS WHAT I would do..
THIS IS WHAT I would do.. take everything that is of value.. sell it. buy gold and silver coins put them at their kids house or somehwere safe.. then tell the banksters to sit and spin! He should see if he can move in with one of his kids.. pay rent, get as many ours as he can and start saving up.. SCREW THE BANKSTERS.. THEY ARE THE ONES WHO CRASHED THIS NATION..
A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.
All you need is a
All you need is a "conditional acceptance"!! This has been tried many times, and from personal experience is 100% effective. There is no way to scam with this instrument. You basically say that you will pay upon a couple of legal conditions,
that the bank didnt break any laws or trick you, and that the bank has the documents orforms they are required to have.
http://www.webmavin.com/CondAccept.html
http://www.webofdebt.com/articles/dollar-deception.php
an old trick I have heard of (I have never tried this) is called offer in compromise, where you send a check and a letter. The check can be for 1 dollar or 20 dollars, any amount. The note says something along the line of "Please accept this Offer in Compromise Contract. By cashing this check #1001 (check number), you agree that this account is closed and paid in full. On the check in the info section write "reference attached letter #(put a number on the letter such as OC1001-2009)"
Staple the check to the letter.
Send the check and letter in the envelope they provide. They will receive it, and cash the check, at which time they agree to your contract.
interesting
Just to be clear it's called "Offer in Compromise"
I've researched a little, and it seems to apply to Tax debt.
"I don't endorse anything they say"
~Ron Paul On the 911 Truth movement.
http://www.youtube.com/watch?v=hGyhlNY0y1k
I think thats what I have
I think thats what I have
What state is this?
A couple of things:
A debt is a contractual obligation, not a moral one. If you fail to pay on a car loan, they get the car back. Morally, you don't owe more than that.
You should look at this through Chapter 7 bankruptcy. I don't know the whole picture, but bankruptcy attorneys are free to consult and take their fees out of settlement that would otherwise go to creditors.
What state is he in? Where is WNC? In most states, a house and paid car isn't forfeited in bankruptcy... Also protected in bankruptcy in all states is 401k balances and pensions, and generally IRA's, etc are also protected.
It may be easier to just file and walk away clean. Keep the house, car, and earnings. If you tell us more about his total debt, assets and total income, the math will be easier to do.
Western North Carolina
Between Charlotte and Asheville
His house is not paid for..thats why the Short Sale but he thinks if he files Chapter 7 it will hurt his chances of that sale going through and the one who wants to buy it has already spent 6+ weeks sending the mortgage company everything they want 2 and 3 times because they swear they never got the fax and so on..He sent them a letter telling them take the deal or take nothing hes not paying anymore.
I just talked to him real fast and told him I was looking up things for him, and ask after taxes, plus his VA money, how much does he have each month to live on...that I hated to ask, but needed to know he said on a good month he gets 1200.00 and that pays for rent, he moved out of the house the up keep and power bill for it where way to high, gas for the car to get to and from work, power and water bill, a cell phone with no frills, and food.
Freedom is another way to God...A corrupt government is a straight way to hell.
I believe in Hope & Change..I Hope the government will Change
Spindale-Rutherford County-North Carolina
Good question...but...
Judgments give great power that didn't exist prior to the legal decision. In many states, all assets become "at risk" and are often "accessed" depending on the charges and fees for seizure and auction. A paid vehicle becomes fair game to satisfy a default on a jewelry purchase as does a boat or a tractor.
**“The man who does not read good books has no advantage over the man who cannot read them.” ~ Mark Twain **
"...there is no doubt that it (socialism) could not possibly have affected us so widely and so deeply as it has, had it not been heavily financed". - B. Carroll Reece
Stop using the bank
They can't go after an account that ain't there. They can't steal his stuff; it's all idle threats. Bills can be paid with money orders and cash. Debt is an emotion.
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Thank you
This is the ole' blood from a turnip thing. The judgment process is a long, drawn out affair and many things could happen between now and then, especially if he doesn't sign for registered mail or answer the door for strangers. If the ultimate end point is bankruptcy, than stop paying anyone now and remove all assets from a place that they can be seized by others via Court order.
The 15 year old car is hardly a target, the costs of auction are much too high to waste on that endeavor. What will be at risk are his wages during the interim of the judgment dates and the filing for Chapter 7. Any garnishment will be extinguished by the filing and subsequent discharge of all debts in the Chapter 7. If he has accountable assets Chapter 7 may not be available...sounds like he ain't got shit so I wouldn't worry too much about this.
Stop paying now and save everything for the "re-establishment in a new place" needs that will come. Walk away from the house and all debts, keeping if possible, one credit card by paying it off before defaulting on the others. The house can be lived in for months without paying for it as the foreclosure process moves forward so he can "bank" the money (in the Sealy Posturepedic) he would be spending on the mortgage.
Once the banks open the spigots again, they will lend to him again...because they have to...its what they do.
**“The man who does not read good books has no advantage over the man who cannot read them.” ~ Mark Twain **
"...there is no doubt that it (socialism) could not possibly have affected us so widely and so deeply as it has, had it not been heavily financed". - B. Carroll Reece
V.A
As I said he has a service related disability...he gets a small amount each month for that...under 200.00..they told him he must have an account..they refuse to send checks
Freedom is another way to God...A corrupt government is a straight way to hell.
I believe in Hope & Change..I Hope the government will Change
Spindale-Rutherford County-North Carolina
Withdraw all deposits the next day...
When the debt collector's find the account, change banks. It will take time and money for the debt collectors to find the bank account...usually around $200.00 per hit. If the account is empty, they are out the $200.00 and then have to decide whether or not to invest again in finding another account in the probability that the "deadbeat" is still destitute.
The bank will assess nominal fee's that will have to be paid before another account can be opened elsewhere but hell, they will only get him once or twice before giving up for greener pastures.
**“The man who does not read good books has no advantage over the man who cannot read them.” ~ Mark Twain **
"...there is no doubt that it (socialism) could not possibly have affected us so widely and so deeply as it has, had it not been heavily financed". - B. Carroll Reece
Then let them take the less than $200 a month
and keep the rest free of the bank. It's hard to lay low if you take official money.
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