debt

HI all, I have been seeing a lot of posts about the mortgages and the crisis we are under, I too am about to lose my home, 16 % interest???…….right…I will pay that right away….NOT>>.lol…. I am going out on a limb posting this message due to past experience doing so on here and getting hate mail in my personal mail box, by someone that thinks just because I have a job at the IRS, I must be responsible for all your taxes or something…..

Its just a job…just like yours….only mine is seasonal and I get laid off in June. (I get zero benefits, so don’t try to go there), but I want to try to help those that this infomation may help. those of you that want to send me hate mail and hate me because I have a job at the IRS, go ahead, this isn’t directed to you. This is called Domestic terrorism and we deal with it daily at the IRS. We send these cases to the big boys that carry the guns, You don’t want to mess with them. PLEASE note TS, Your messages will not make my spam blocker, so no need to try.

So anyway, to those of you that are fearing the tax liablility for your mortgage forgiveness fear not…Help has come.

.. Dec. 20th 2007 Mortgage Forgiveness Debt RElief Act of 2007 was enacted. Taxpayers may exclude debt forgiven on their principal residence if the balance of their loan was less than 2 million$. The limit is 1 million$ for a married person filing a seperate return. Details are on form 982 and its intsructions availble now on IRS.Gov. I am sending this info to help… I hope it will….good luck you all…I’m hearing you and its so nice to have a sounding board with you all. I am in a pickle worse than I have seen on here so far.

Thank you for the Info. I dont hate you and I promise no hate mail… =) I do understand – I work for a wireless phone company and when people find out they yell at me bc their cell phone does not work like i did it..LOL Thank you for doing the job you do!!

I am also fighting with my mortgage company to keep my house. Grrrr.. So far I am on a repayment plan and so far so good – we shall see. I am looking into refinancing but not sure.

court

Citigroup is getting nasty. While I was out last night they tried to leave a summons with my girlfriend (who has nothing to do with the account). The envelope with the summons was sticking in the door hanging out in the rain.

Is this proper or can I claim I was not properly served or something like that?

I wouldn’t think that is a proper summons, I would think that you would have to be handed that personally, but I’m no expert. I received a summons a week and a half ago and it was from a county Sheriff personally. It should be interesting to see if anyone else has some other insight. Good luck to you. Mine was from Capital One, it sucks having to go down this road.

Still in some states, you do not have to be served personally, posting on your door at your place of residence is considered duly served. Best to check with an attorney in your area to be sure what is appropriate for your area.

Just wondering, how far behind was you before they served the sunnons? I think I am going to be in the same situation. I appreciate the info. Good luck to you.

From what I read of it, they say three years. To be honest, I was so annoyed and was so busy with work I didn’t look at it yet. I’m going to check it out in the next day or so if you want to check back with me next week.

Mine had been turned over to a collection agency for over 6 months and I made a $10.00 payment back in November, we cut off our regular phone and they weren’t able to contact me so then they served the papers. I talked to the law firm who is doing the lawsuit after I got served and he said they had been trying to contact me and since they couldn’t reach me they served the summons and said they are still willing to work with me, but we are going to file bankruptcy.

My attorney advised me on how to respond to the summons and it will buy me a little time, hopefully enough to avoid garnishment or other actions. The lawyer told me that interest is accruing at $5.00 a day so that is 150 a month in just interest so I would probably need to give them at least 200 a month but I can’t even afford that so I am praying that we can get filed quick enough to avoid legal action from them.

I have a question for anyone. I was able to settle all debts w/ either the collection agencies or the credit card company. except Citibank. they want to take me to court. their lawyer also said if i dont pay them ( i dont have enough to pay in full. the debt is 5K) that if i dont pay them. they can have me arrested. is that true?

NO! They cannot arrest you. What will happen though is your wages will be garnished. They can take up to 25% of your gross pay each paycheck until the debt is satisfied. They may also be in trouble for telling you that you could be arrested. That is illegal.

If that threat came from a lawyer, you can report him/her to the state bar, and if was someone claiming to be a lawyer who is not, the bar would be interested in that also.

I wrote a little bit ago about a collection agency that was hounding me for a 17K debt. they had agreed to settle for 12+K.

after posting about this situation on this list you guys encouraged me to work the payoff amount down. I got them down to $9200. it was so easy I wish I had persisted in negotiating it even lower. but I am happy with this outcome.

my BIL tell me though that I will have to pay income tax on the difference between the 17K and the 9K since it will be looked at as an income or a finacial windfall. is that true?

thanks for your encoragement. I would have been too nervous to do it on my own. you guys really helped me with ideas on how to approach this.

thanks!

It probably depends on individual circumstances. Wells Fargo “forgave” a debt that my mother couldn’t pay since she passed away. I just received some kind of tax form indicating miscellaneous income for the forgiveness of this debt. It was only a little under $4000 so no big deal.

Is a big deal. You yourself are not respomsable for her debts. Write ‘deceased’ on the bills they send to HER and take no responsibility for them at all.

When my dad died, I got threats from an attourney and I told them nuh-uh… They’ve left me alone. If they wanted to sue me or something, they really could not being that I was on straight SSI. It is possible they will send you a 1099 for the difference. If they do, then and only then will you need to pay taxes on it.

You do have to pay income tax on the difference. My mom, co-signed for a furniture loan for my brother who never paid the loan. When collection agencies started calling my mother, my mother agreed to pay a reduced amount. A couple of years later she was contacted by the IRS demanding she pay an income tax on the difference between the amount owed and the amount paid.

You, as your parents heirs, are not responsible for their credit card debts after they die. There is a formal method to how debts are paid after someone dies. They can seize the assets and sell them to pay the debts, but once that money is gone, anyone left over is pretty much ass out.

Basically, any old taxes will be paid, then things trickle down. I used to know this by heart, as my mother dealt with it years ago, but you are not responsible for any debt unless you shared it. For instance, did you own the house with your parents? i.e., Homeowners are Sally (mother) and Dorothy (daughter). In that case, they can come after you. Same with credit cards and other loans. If you are the actual debtor, it can transfer to you after the death of the other party. If you are just an authorized user on a credit card, you are free.

In my case, dad and I had a living trust and were trustees. When he died, I took over the house and such. Due to ignorance, and also a sense of right, I did take one of his cards and paid it, as I ran most of the debt up. That’s the one that is paid off now.

Oh I meant that the amount wasn’t a big deal. By the time I take deductions and whatever, there’s no taxable income. I did put deceased on all her bills and wrote letters with copies of her death certificate. The ONLY company to keep pushing to make a claim on her “estate” was Citibank.

depression

What is the first step to make or take; when everything seems so pointless? I am struggling with the mortgage crisis and not sure what to do right now. Any advise?

Do you have savings in place? Do you have a written budget? If not, those are two things I’d work on immediately. The second one can be done without money… just put it all on paper! Have you called your mortgage company yet and tried to work out a forbearance agreement/repayment plan? I got 2 or 3 payments behind a while ago and they worked with me, especially since I made sure to keep in contact with them and I was able to set up a repayment plan that spread my past dues over a 6 month time period. It made my payment about 250 more per month and it has been hard for us but I don’t want to lose the house. We fell behind because of job changes that my husband made.

First, realize that there is a way out. If you pray, do it. God is up 24/7 so don’t worry.

Then, sit down and be brutally honest about your current financial situation.

What do you have available? What needs to be paid? Do you have any money you can get to right now? Savings? Sell some things? Borrow it?

You need the roof over your head. You need to eat. You need your utilities to work.

When do you need the next payment and what is it for? You may have to let some things slide so you can handle the priorities. See above.

Skip the credit card payments for the time being. Pay your mortgage. Skip eating out, if you do. No more daily newspapers. No more buying lunch. Pack it. PB&J will fill your stomach. Ramen noodles are not just for college kids. Boil some eggs.

You must address your immediate needs. Provide a bit more information please.

Your posts always are right on, you are very good, do you do this for a living??

No. I don’t do this for a living. I am just so determined to get out of debt. I finally “tired for myself” as my great-grandmother used to say.

I have been reading everything that I can get my hands on, listening to Dave Ramsey on his new t.v. show, reading books from the library, web postings on MSNBC, USA Today, abc news (Melody Hobson), Today (Jean Chatzky), etc. I just want to be free!

I set up a savings account and set it up to automatically receive money from my paychecks. That way, there will be something saved and I don’t have to think about it. I have found in the past that SOMETHING tends to come up and I would not move the money over to savings. I am hoping that doing it automatically and painlessly will help.

I tell people all the time that it is your paycheck, if you want to cash it into $1 bills and burn it in the driveway, that is your right. It is your money after all.

However, when you have debts, it seems like you are constantly thinking “I get paid on Friday and I have to pay this and this and that and this” and you think “What’s the point?” I don’t want to live like that. I don’t want to have to think about every little purchase. I don’t want to calculate the grocery list weeks in advance in order to afford what I want to feed my family. I am fine with coupons and use them regularly.

Shopping on sale is terrific. I am all for it, but I am sure there are other people like myself. You think about things in terms like “this paycheck is for the car payment”; “that paycheck is for the car insurance, mortgage, daycare, and shoes for this family member (can’t get everyone’s shoes at the same time)”. You think about what will have to be shifted if you “splurge” and buy this or that when it was not originally on your list.

That is no way to live. If I see that blouse or that jacket or some toy for my child on sale and I want it, I want to feel free to get it. Life should not be just about paying bills. So, our family is a work in progress. On December 31, 2015, I fully intend to be tied to a lot less debt than we were on January 1, 2015.

used cars

“finance for dummies” says buying a car on credit is one of the worst financial decisions you can make, so I doubt that qualifies as “good credit”.

I wasn’t thinking that buying a car with a credit card was a good idea,I was thinking that making a down payment and financing a car and making payments on time would be good for your credit. Does Dave Ramsay think that buying a car with a down payment and making your payments on time is a bad idea? I am just curious, as I can’t buy anything and have terrible credit, I was just thinking about my future – please let me know if you get a chance.

Dave Ramsey says on his t.v. show all the time to save up for car purchases. If you have to, get some $2500 car, just to get by with until you are debt free. If necessary, when it dies, get another one, just don’t finance them. Then, when you are finally debt free, save up and buy a car outright.

Personally, I am all for used cars in great condition. I fully intend to pay off the current one and later, save up for the next one so I can pay for it in cash at the time of purchase, rather than financing it.

Dave always says that he does not borrow money. (Financing a car is borrowing money.)

Well, what I found out is that if you pay say a quarter of the minimum due way early on, they will take that off your balance, but will expect the full minimum at due time. Usually, I wait till AFTER the next statement date to pay a part of a minimum amount.

I do this with Capital One. As long as the payments add up to the minimum, they are happy. I make an extra payment when it’s a five week month, so the balance drops a little faster. It does make a difference on the interest. Just be sure the total of your payments equals or is greater than the minimum payment due AND that all are received by the CC company between the statement date and the due date.

One of the things that help a lot, I have found is that when you are making a payment is to pay this way –

Add the minimum payment + finance charges + $15 and mail it in. That way, we are never paying just the minimum.

I am working on being one of those people who can pay a bill the day it arrives in the mail. We are not there yet, but we are working towards that. I think that if we can manage to make a payment towards some of the debt from every paycheck, it will help. It does not always happen, but we are new at this. Last year, we actually started putting words into action. It feels good.

Another thing that we do, is make a list of things that we want/need and then, we keep an eye out for them. For instance, hubby needs some new jeans. So, I keep his sizes in my purse. When I am out and I find them on sale, I pick them up for him. Since we have been slowly putting money away towards these items, we are able to pay cash for them and get them on sale. BONUS! So, we get the items and we don’t incur any additional debts.

You can mail a payment every week to your credit card OR pay it online and it will lower your average daily balance. If you make 20 little payments a month, your debt will go down much quicker than if you paid just the one large payment.

Trust me, the credit card company is not going to send the additional payments back. Whenever you make a charge purchase, make yourself send a payment for that amount to the credit card + $5 on your next payday. You will pay a lot less interest on your credit card that way.

Otherwise, try to pay the bill off in full by the end of the month. If you save up your spare change daily, once a week or every two weeks, take it to a bank, get all of the change added up and put it into a cashier’s check. Send that money to whichever debt is next on your list to pay. It all adds up. The less interest you pay, the better for you overall.

This is also a good way to boost your savings, emergency fund or otherwise, since nobody seems to realize how quickly their spare change adds up.

As long as you get the minimum or above covered you are fine. I am not sure if you can apply the same techniques to car or mortgage loans.. but with those you can always take any extra you should have available and still make the payments weekly, just may have to make the full paymnet as scheduled. In the end you get teh same results.. every payed off way earlier then you would have before.

I will send an update shortly after the 4th of next month this will be month 2 of paying htis way and hoping to inprove on what I gained last month.

Thanks to everyone who replied with great answers and advice to my post. I appreciate it! I am going to try doing this.