Trying To Avoid Charge Off

If you are new to the blog, click HERE to start at the beginning of my story.
POST #28?
I was content to let my account charge off at the end of February and go to the Recovery Department until my CRN coach tried to talk me out of it.
There was a complication that she wanted to avoid. Very soon, I was going to apply for a loan mod on my house (yes my story continues!). She thought it might be risky to play chicken with the bank this one last time. There were for 2 reasons:

thunderbirds
Image by Blondie5000 via Flickr
  • If I got sued by my VISA account, it would destroy my chances at a loan mod.

  • My mortgage bank would be less likely to grant a loan mod if I had outstanding unsecured debt.

With the loan mod on deck, her advice was to not screw around. Let’s land this last deal and move on.
I trusted CRN implicitly so I went along with the advice. I called the VISA department 6 times between 2/25-2/28 in an effort to settle. My CRN rep even decided to step in and make the calls for me. This would end up costing me a bit more money if she landed the deal, but it would be worth it.
We called on Friday, Saturday, Sunday – multiple times each day. We re-told the story over and over. We spoke with call centers in Iowa and Oregon. We weathered threats of judgments and law suits.

PEARL HARBOR, Hawaii (May 4, 2007) - Chief Min...
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Unfortunately, nothing worked. The VISA collections department was firm. And when I say firm, I mean” firm like the buttocks of a body builder” firm.
THEY DID NOT BUDGE.
After our last ditch effort failed on Sunday 2/28, we resolved ourselves to charge off. But not all was lost.
On Sunday evening 2/28 we called the Recovery Department. Apparently, the account would be there on Monday morning. We wanted to get a head start so we called them. We told the rep that our prior offers were for $5000, but I put my ego aside and asked one more friend to loan me $2500. This would make our total offer $7500. The rep was impressed with my tenacity. He was sympathetic, smart and straight forward. He listened.
From his point of view it was a long shot – a BIG long shot. But he read through my notes and could tell I was sincere and up front. As long as the account hit his system in the morning, he agreed to bring it to his supervisor first thing.
We could only pray that the account would appear in his computer the next day and NOT end up in purgatory.
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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Credit Card Withdrawal

If you are new to the blog, click HERE to start at the beginning of my story.

POST #12
?
At this point I am on the path to becoming debt free.

  • I acknowledged that I needed to make a change.
  • Chose debt settlement.
  • Found the right debt settlement company for my needs.
  • Stopped making payments.
  • Called my bank to let them know I was in a financial hardship.

NOW WHAT?

This next step in the process was probably the biggest shocker of them all. You see, since I had committed my lines of credit and credit card to a settlement program, I could no longer use them.

day 76 - credit cards
Image by JudeanPeoplesFront via Flickr

uh-oh.

I can’t charge anything?

How will I live?

This was a real wake up call. I soon realized that I couldn’t actually afford my lifestyle. The first change I made was to either pay cash or use my debit card for all of my purchases.  This forced me to make hard decisions. If I didn’t have the money in my account, I wouldn’t buy it.
Simple enough………to say that is.  But not that simple to do. I had to undo decades of habitual overspending.
Time to start making choices. So what would I cut out? There were dozens of adjustments I made, but here are a few:

  • No more Starbucks
  • No more impromptu lunches out with friends.
  • Probably don’t need that Netflix subscription.
  • Say goodbye to HBO.
  • Whole Foods is WAY TOO EXPENSIVE and off the hit list.
  • Costco is my friend.
  • Instead of turning on the heat, I put on a sweater.
  • Cancel the cleaning lady and the gardener. Sunday is family cleaning day.
  • Do I really need the extra soft toilet paper?
  • I LOVE generic everything! 🙂

The most interesting by-product of these changes was that I started living more consciously.  Every decision was challenged. A distinction was made between my needs and my wants.
I have a greater appreciation for the thriftiness of my grandparents. I used to make fun of my grandmother for delicately unwrapping presents in hopes of trying to re-use the wrapping paper……well….I still laugh about that one. Some things really are ridiculous!!
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan
P.S. As an aside, I did keep a few low balance, low interest credit cards out of the program for emergency purposes. I have kids, so I do need a safety net. That said, I made a promise to myself, and my family, that these cards were to be used for emergencies only. No frivolous usage.

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