Legal Question in Credit and Debt Law in Michigan
2 collection companies?
We are about $35,000 in debt to 6 credit cards.We placed 4 of them into a credit counseling program,but because the payment was so high already we couldnt add the other 2 so have been paying on them when we can.One creditor,Chase,has sent our account to collections.It was with one compant where we were paying $200 a month,we could not make one payment and it ended up at a different one.I have not contacted them yet and today I received a letter to call or they will sue for $15968.ALSO I got another letter from a different collection company,same account saying the bill is $14123. Why 2 companies and what should I do? With this debt and a vehicle loan we have only about $1500 in savings left,my husband makes about $60,000 a year.We didnt want bankruptcy as we rent,have one vehicle and we dont want to lose what little we have.We also are paying on a cabin we are fixing up for a retirement home,we are buying it from mother in law,but it isnt worth much and is our only home for when we retire,which is in 5 years.
1 Answer from Attorneys
Re: 2 collection companies?
While submitting the same credit account to two seperate collection agencies was probably a mistake, Chase may have violated the fair debt collection act in doing so. Chase should be notified of the double demands, but be aware that any communication you have with Chase or the collection agencies will be used as evidence against you when they sue.
On several occassions, I have negotiated with credit card companies on behalf of my clients to waive all interest charges and allow all payments to be applied to principle. Many companies prefer this type of arrangement over a law suit or the debtor filing bankruptcy.
While most people want to pay their bills and don't want to consider bankruptcy, it may be the best option. When debt gets too high, and becomes unmanageable it can effect every aspect of a person's life. It sounds like that is your situtation. You may want to consider bankruptcy. There are really two types, Chapter 7 (liquidation) and and Chapter 13 (reorganization). With a Chapter 7, your debts are discharged. With Chapter 13, you have the opportunity to pay the debt back and keep the creditors from harrassing you.
In either type of bankrutpcy, the individuals have certain exemptions, which means that a debtor may be able to keep certain assets such as a retirementa account, car, house, personal belongings etc. Either way, after a couple of years of timely payments, most people are able to obtain loans, get cars, buy a house, etc. and their lives are much better because they are not living under the pressures they were when the debt was unmanageable.
Call me and we discuss your situation in further detail. If you would like, I can send you a free evaluation form and we can see what options are best for you.
I can be reached at 586-992-9981. Good luck.
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