Yesterday we did closed another credit card out and it's another one off our list. The reason why I'm not too excited is because how it happened. We received, what I think is a "summons" that we were being sued by one of the creditors. It was going to cost us a fortune if we had to go to court and hire a lawyer, so I made my husband call the lawyers who was handling this for the creditor and they agreed to take a reduced settlement.
We're getting a letter stating that it's being closed and paid in full. The original debt was $3000 and the settlement was only $2500. If we didn't pay it we'd have to show up for court and spend well over $3000 that we didn't have. They were willing to take a postdated check so I had to transfer everything we saved to pay off the next card and the entire emergency fund to our main bank account to cover this. I consider going to court an emergency.
So, another one down, but we're worried that now the other creditors are going to follow suit and try to take us to court. Luckily we were able to file our taxes last night, so hopefully we'll have the refund soon and be able to pay off some more debt.
Our refund is less than we were hoping for. We had a 1099 from one of the credit cards we settled and the balance was considered taxable income and there was another 1099 from when I cashed out my 401k from a job I had years ago. The 401k was less than $500, but there's a 10% penalty also.
Getting the notice about court really, really scared us. We're now even more determined to have this debt paid off by Jan. 1 of 2009.
Friday, February 1, 2008
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3 comments:
For future referances, when you goto court you explain your situation to the judge, you say how much you can afford to pay a month, and you set up a monthly payment plan... thats all. It's very relaxed as long as you are willing to set up some type of payment plan.
I really like your blog.
I am also on a mission.. SAVING PEOPLE FROM DEBT!
I am committed to educating as many people as I can about debt and managing finances.
A few years ago I was in 40K worth of credit card debt. I have 1 more credit card to pay off which is about 5K. I have been in huge debt and don't want to go back.
You may be interested in reading about it.
http://hubpages.com/profile/moneymatters101
Pass along this information to anyone you know.
I also have a free credit repair secrets e-book that I will share with anyone who emails me before the end of the month.
I just feel that everyone should have access to this information and you should not have to pay for it!
Good luck to you!
Being sued would have made me nervous too. At least you were able to take care of it! :)
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