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Increasing Signs Of Stress At Citi?
A reader sends in this morsel from Citi, offering to take (and keep quiet about) a 47% loss on a Citi credit card account if only the user will pay before year's end. A few things occur to us on reading this letter:
- If widespread, this would appear to be awfully desperate on Citi's part. Perhaps, combined with the massive spike in APR we've seen elsewhere, things are beginning to slip? Of course, this is mere speculation based on a single anecdotal case but it does make us very curious.
- This is collossolly stupid of Citi. Once word gets out what exactly do they expect the rest of their credit card customers will consider doing?
- The specificity of the balance settlement (53%) sounds suspiciously like someone's model gone viral at Citi. Why this figure exactly?
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When I got into the mortgage business - 23 years ago - underwriting was done by a human being. No scores - just a set of guidelines, supllemented with the flexibility to use "common sense" when looking at a "file". Of course, score based risk modeling replaced the "common sense" component. And underwriters jobs morphed into one of reviewing the documentation that the "automated underwriter" asked for. Talk about progress! Anyway, the system shit the bed.
Also, there is precident within the mortgage industry for lowering forclosure standars. I forget what year it was, but when oil went bust in Texas, there was an already long standing four year waiting period regarding forclosures. Within a matter of aboout 12 months, industry standards were revised so that you could re-apply for a mortgage, as long as you were coming out of Texas and you had good motivation regarding the default.
As previous posters have speculated, I too think that credit standards will be lowered to accomodate buyers.
Sheila Bair called, she would like to know what brand of black marker that is?
Sharpie, Dude. Pure unadulterated black-as-the-ace-of-spades can't-see-my-underwear Sharpie.
Sources inside FDIC informed me Shelia "Bobble Head Doll" Bair bought 2 cases just in case the FOIA requests get thick as thieves.
The propaganda machine is working overtime. I just saw this new commercial "fair play" on t.v. and spit out a mouthful of Chateau Rauzan-Segla.
http://www.youtube.com/watch?v=cLkT7oQbHlU
Hilarious. Do they have a hotline?
Spat up my lunch...
Flagged it as SPAM - Scams/Fraud or would have misleading text been more appropriate - one and the same really
Just Shit my Britches --- DAMN!
Are You kiddin me?
Yes Finra protects...THE BROKERAGE COMPANIES AND BANKS THAT PAY THEIR
SALARIES AND WHO TRAIN AND SUPERVISE THE BROKERS
WHO ALWAYS GET FUCKED IN THE END.
Remember Ms. Shapiro is from there.
ROTFLMFAO
From my firm's monthly letter, 14 Oct 09:
"This paragraph was going to be full of anecdotes, but thanks to JP Morgan Chase CEO Jamie Dimon, it is now about data. I discovered this weekend that someone near and dear to me [my grandmother] has credit card debt exceeding $35,000 (most of it owed to Chase), compared to an annual income of $15,000, discretionary income considerably below zero factorial minus one, and liquid assets of $132. To put it mildly, someone’s unsecured creditors have a problem, one which will not easily be solved by any number of callers from the Eastern hemisphere encouraging a payment to be sent. Upon arriving home, I found that the credit card companies were trying to make up for credit losses from those with no ability to pay by raising rates on all oftheir customers, even those with 800-and-up FICO scores. Aparna’s Chase card just went to 18%; my GM card to 22.5%. Both accounts had no balance, but we nonetheless immediately closed them. Mr. Dimon noted this morning, "Credit costs remain high and are expected to stay elevated for the foreseeable future in the consumer lending and card services loan portfolios," after his company reported a credit card charge-off rate for the quarter of 10.30%, up from 10.03% in the prior quarter and more than double that of the year-ago quarter. In spite of a record low Fed funds rate, these increased losses will help assure that lending to consumers and small businesses will remained constrained and expensive for a long time to come."
If you think unemployment is still going to be 11-12%+ in two years, it is hard to see how the earnings quality of banks is going to improve anytime soon.
This only beginning, "they" are trying to get as much money as they can before (P3) hits. When it does everyone with a FICO score above 100 will stop paying everything. Why you ask? Because everyone will be worried about just putting food on the table and a gun on their hip.
I've gotten deals like this from Advanta, Citi, BAC, WFC, JPM... I'm getting my F'N bailout.
Same here - time for my bail out. Wracked up 100k in unsecured debt - screw them. The government set the standard anyway with their bailouts. Matter of time before this becomes more common place. It's like a child watching his parents - eventually the behavior is mimicked.
The government made you run up a $100k credit card balance?
The commentors on this thread are starting to disgust me. You're not Robin Hood dude. You're part of what hit the fan last year.
STFU bankster.
I am not a banker at all. I'm just someone who honors my debts. Tired of listening to you deadbeats. You're not some sort of countercultural hero for skipping your debts. You'rea deadbeat, or worse a thief.
What this site really needs is a good discussion on ethics and morality. And I'm not even religious.
Deadbeat and proud, mother fucker. It's the new black.
I am Chumbawamba.
Naw, we were the sorry assholes on the other side of the fan when the shit hit. But no longer.
If you're too much a slave to understand or too much a pussy to stand up and fight then move aside and let us win your freedom for you.
You're welcome.
I am Chumbawamba.
Youre a paper bug, and you dont even understand how this tyranical paper game is going to end? Ha! Ha! Got Gold?
Why do you continue to support a paper ponzi system that destroys the weakest people of our society? Fixed income people, orphans, widows, single mothers? Its time for everyone to take all their money out of the banks, stop paying their debts and buy gold. People are losing faith in the system anyway, the melt down is going to happen no matter what. So you might as well shut your mouth and go buy some gold.
Why are Paper Ponzi Tards, the hardest to reach?
So the banks that create fake money out of thin air are the good guys and we that trade our time and energy for their fake paper money are the bad guys.
Your another Paper Ponzi Tard and your percieved paper wealth is going to burn when this collapse happens. Then your going to go crying to those of us with the food, guns and gold for a hand out. You disgust me!
When BAC raised my interest rate, I tried calling to negotiate. They said tough luck. So I stopped paying for three months. They then called to offer and we settled for 30%!!!! This was in May.
so they're foregoing the accrued interest - I wonder how that gets reported - no different than Heinz flushing out catsup at quarter end rather than sitting on inventory
I think that was for WakkStPro2's silver purchases. Fuck then mutherfuckers.
BTW, forgiven debt in such a settlement is conidered taxable income by the IRS.
Forgivenees of debt is not taxable if the taxpayer is insolvent at time of settlement!
Note: there's a break in the code for TY 2009, check it out. No tax due on 09 return, pay it over '10 & '11. Nice for all those brokers who bailed & negotiated settlements on their forgivable loans.
(BTW 36 times (-17) equals... WTF guys?)
Noticed that wall mart was going to market cell phones with pay as you go plans. No need for credit check there. Everytime you burn a cc card just get a new number.
But what does all of this mean to consumption? These folks who have been smart/lucky to cut their IOU's in half also are not buying "stuff".
This week we will hear that the economy grew at 3.5%. That was bought with stimulus and POMO. What is going to happen as that ends and the consumers have no buying power? The long term economic recovery story does not ring right in light of this piece.
I just got a notice today Citi is raising
intrest rates to 24.99 %APR for purchases
and 29.99 % APR for defaults. ( I have
a zero balance with Citi and an 800+ fico )
They are also raising late fees.
Tried to cancel the card and got a
recording that the lines had unusually
heavy volume...
They always have that recording playing. They're too cheap to hire more call center reps. The bastards.
I am Chumbawamba.
When you see that CITI can't even afford to outsource the call center to India, that's the real sign they are on the verge....
Who cares? If you carry a zero balance, Citi can raise the rate to 1000% APR and it won't matter. People are retarded -- at 24%, is it better for me to be a BORROWER or a LENDER....? You have a 50/50 chance of getting the right answer.
Well it goes somthing like this,
Hello customer we are now going to start charging you interest at the point of sale,,,Have a wonderful day
Not a problem. I believe there is a device called a debit card that would eliminate this problem.
Your right,
But in general, we are talking about people that are strapped for cash.
It's the same for companies and individuals - you go BK when you run out of cash. You wouldn't be strapped for cash if you had a proper reserve in place.
Best practices and prudent behavior are what you are talking about, no? I agree.. However, we are now coming off a period where we had a -7% savings rate. I believe we now have a +6% savings rate which is a 13% swing.
With the people trying to get off the DRUG of easy debt, the forces of debt are fighting like hell to pull you back in "Michael Corleone". I believe they will begin to charge interest at the point of sale.. They can't let you escape....
Keep calling.
You will get through.
I am not Chumbawumba, but I'd like to be.
Speaking of troubled banks, here's one soon to be on the radar:
Marketwatch:
Heartland Finl misses by $0.04 (HTLF)
The allowance for loan and lease losses was
1.78% of loans and leases and 50.31% of nonperforming loans 1.57% of loans and leases and 52.32% of nonperforming loans 1.48% of loans and leases and 45.73% of nonperforming loans
September 30, 2009
June 30, 2009 and
December 31, 2008, respectively.
I've tried to get through to WLM lab that most of their data is corrupt but I have no juice (Can anyone help?) Here's what they list:
2009 Q2 2,385,400,000 35,334,000 1.48 = Loan loss %
Although it's just .09% difference, that's still $2,146,860.
Of course the latest amount of 1.78% is a disturbing trend.
http://www.wlmlab.com/bkLUR.asp?inst=HC1206546&pg=lla
wlmlab's data is a piece of shit. that guy doesn't know what he is doing, he takes raw FDIC data and thinks it is golden.
I wonder if this becomes common knowledge, that people will stop paying their credit card bills in hopes of settling for 40 cents on the dollar. It might actually make the banks' problems worse.
I wonder what this does to the value of securitized credit card loans and how they get modeled going forward.
Come on, ZH, where are your CC co. insiders? Someone knows exactly what's coming over the next few months. It doesn't look like funtimes, either.
30 percent it what infidels pay silly americans
Well they have to do something to claw back any kind of balance sheet before M2M comes back, waiting for January or February or whenever the Fed decides that having a negative balance sheet is akin to Enron...
Hey folks- it's not just interest and fees... 47% haircut on principal... My friend had a 25k owed to chase (was wamu), he offered repeatedly to pay 70% but they kept turning him down for a few months.. Then one day they call out of the blue and offer to settle for 53%! LOL!
Ps: after the settlement, he bought a motorcycle (paid cash) from a local dealer .. who went bankrupt one week later!
Raise rates... force defaults... head back to the trough
Hey folks- it's not just interest and fees... 47% haircut on principal... My friend had a 25k owed to chase (was wamu), he offered repeatedly to pay 70% but they kept turning him down for a few months.. Then one day they call out of the blue and offer to settle for 53%! LOL!
Ps: after the settlement, he bought a motorcycle (paid cash) from a local dealer .. who went bankrupt one week later!
A relative of mine settled all his cc's earlier this year by simply calling, asking to speak to a supervisor and making an offer. He settled $300k of cc debt at an average of 26%. The best deal was at BAC for 15%.
300k in cc debt? My God!
Sitting in the CC industry for a few years now this smells about right for a late stage collections settlement attempt. We would know a lot more if we knew how long the account had been delinquent, size of the balance, account history with Citi, and a bureau pull for the individual. These factors would allow us to begin boxing the risk they display and allow us to make a better judgement on the offer.
As another anon also said, if you have been bouncing around delinquency for awhile chances are you have a pretty hefty set of fees and interest built up on the loan.
I am fairly certain collections would not make this attempt unless either A. you are testing a particular collections strategy or B. you have already validated the strategy as your champion. Collections is pretty rigorous when it comes to analytics and there are plenty accounts to create test and controls out of the population so Marla to your 2nd point about Citi being stupid repeat after me...CREDIT CARDS ARE NOT MORTGAGES. CC have history going through multiple business cycles and a long history of dealing with delinquent and dead-beat borrowers. The people in the collections area of credit cards are not trying to make it up as they go along like the mortgage mod guys.
There are plenty of reasons to beat up on Citi (pick one), but this one looks like a big stretch to say Citi is in trouble because of one settlement offer.
Watch who you're calling "dead-beat", pal.
I am Chumbawamba.
The big question here is: can someone with knowledge explain the downside of accepting these negotiated settlements? I know that you'll have to pay tax on the portion forgiven, but what is the effect on credit scores, etc.?
The reality is this: my moral compass has shifted to finding any way to screw these guys without poisoning myself. I'm tired of paying for everyone else and I'm tired of being the sucker in the room for putting 20% down on an affordable house on a 30 year fixed mortgage and carrying little debt.
Sounds about time to max out my $50,000 in available credit and let the bastards try and recoup it from me.
Your credit score will take a - possibly severe - hit, even though your debt was "forgiven." Debt settlements will remain on your credit report as a black eye for years. Another "trick" the CC comapanies use is "non-bankruptcy re-affirmation." Essentially, the collections dept. trolls through their deadbeat files looking for delinquent cardholders who, after charge-off, are given a reprive of sorts. If they are good little boys and girls for the next say, year, they are given a fresh pile of chips with which to go borrow themselves back into a financial hole. The bank gets to book the charge-off against earnings, makes a shit-pile of money on interest and fees on the same customer, over and over...Lather, Rinse, Repeat.......
Debtors Revolt!
Definitely max out those cards! Use the proceeds to buy gold & silver.
I am Chumbawamba.
Its the Wall Street deadbeats vs the Main Street Deadbeats
Waldo
If you are insolvent at the time of the write off you do not need to claim as taxable income.
My understanding is it remains on your credit as settlement for 7 years.
My understanding is it remains on your credit as settlement for 7 years.
Not necessarily. Under certain circumstances you can have that item expunged from your credit report. I did. But then I'm devious.
I am Chumbawamba.
How did you have it expunged?
In short, I was trying to re-fi my mortgage many moons ago. I had this unfortunate charge-off blemish (from Bank One, defunct) on my credit report that was causing concern with the lender. I found an article on the web that Bank One had had a class action lawsuit for over-charging something or other. Even though I was not a part of the class, I went ahead and claimed that I was, and that that charge-off should not have been on my credit report. Something like that. My explanation was accepted, and the item was removed from my credit report. It was then that I realized that credit reports could be hacked, and that the weakest link was, as usual, the human element.
IF our current credit rating system remains in tact after all this blows over many years from now, the flurry of lawsuits that will surely result from this brouhaha (and are already happening) can be used as fodder to clean up your credit report of all the charge-offs and defaults you took now.
There is no risk. Default away at will.
I am Chumbawamba.
who is the better credit risk in the future the guy who stayed in his upside down mortgage, and struggles to make his payments, while being forced to carry a balance on a 29% cc. or the guy who defaults on his mortgage, lives rent free for over a year. stonewalls his cc company until the deal is too sweet. uses the money he saves to position himself to be secure, and maybe prosperous in the future
Walk away economics?
Citibank topic: I read that Mexico changed the rules for foreign owned banks and Citi must sell Banamex which they paid 12B a few years back for peanuts. Can anybody shed some light on this????
I think that Mex had that rule in effect for many years as other countries do as well.
I can only imagine there is lots of diplomatic discussions about this one. My guess is that Mex will not enforce due to US pressure. As I understand, Banamex has been quite the cash cow for C.
Thanks, I read that Citi was selling Banamex for less than 1B....:-( citi schmuck shareholder!
A pile of food, guns and silver, beats a high credit score every time. especially in todays world.
mountain house, ak47 10,000 rounds ammo and bags of junk silver....:)
Why don't they pull a WAMU and show real signs of strength by offering 5% CD's.
Where there is smoke there is fire.
I will TELL you C is having major problems and C isn't the only one. When it comes to things like this it's amalgamous to cockroaches; there is never just one.
If it looks like shit, and smells like shit....
Large haircuts on credit card debt are quite common now. I have friends who have settled for 30 cents on the dollar.
it all depends on what state you live in, but it might be worth it to just ignore this bs. citcorps credit services is their in house collection agency. they formed that to go after collections. they have attempted to evade federal collection law by saying that they are the OC, original creditor, so they don't have to abide by them. but a few years ago, that ruse was pierced so now they can and do get routinely sued over FDCPA violations. basically citicorp collection services is just a bunch of low paid collectors who stare at screens all day and punch in collection calls, etc. then during a lawsuit, they have some of them that they use to sware that you owe the debt,etc. the entire thing is one big sham. imho, for citibank to be giving deals like this, it is almost unheard of. they are hard assed and pricks to deal with and sue at the drop of a hat. but if you have the money, and this is what you want,then do it. but make sure you keep all paperwork because one day, someone may come after you for the part of the debt that you did not pay, believe it or not.....also they will 1099-C you on the difference too so you will have to settle with uncle for debt relief....that is of course if you have any assets.....
Hey, Dumb@ss, If Citi Bank issues you a credit card with the name Citi on it they are the original creditor then technically they do not have to abide by FDCPA, however they do so voluntarily. Those low paid collectors are making commissions collecting from your sorry ass. These settlement deals are not unheard of, actually they are pretty standard for high risk no contact past due 3 and 4 month accounts. Obviously you have never read the back of a 1099C, it clearly states if you are insolvent, meaning your liabilities exceed your assets, then you do not have to pay taxes on the forgiven amount. Also it only make sense to save your settlement paperwork, as you would with any financial transactions.
Citi Collector
Sucks being you.
I am Chumbawamba.
I tried to take advantage of the "obama" mortgage reduction plan due to a recent job loss. Was hoping to get my payments reduced. House is of course worth less then what is owed. The response I got was, well you are not employed currently so you don't qualify for the mortgage payment reduction plan??? Uh..the reason I needed the mortgage reduction payment plan was for exactly that reason if you want me to play by the rules and keep paying the mortgage out of my savings for as long as I can. The system is set-up for failure. I agree with the other ZH members - screw these assholes and don't pay your debt. The banks did not pay theirs and had the nerve to ask for our (taxpayers) money to bail them out.
You were going to pay on an underwater mortgage?
Loser. Just stop paying, you will live rent free for two years.
Quit telling people they can live rent free for 2 years. Some banks are actually forclosing in 7 to 9 months. Also beware if they can come after you for a deficiency judgment. You will have your wages garnished until you pay off their loss in full.
What wages?
ROTFLMFAO!!!
I'm joking here and I am not. Is it possible for the economy to flow backwards? Instead of everyone paying everyone for goods and services they receive, everyone steals from everyone.
There was an earthquake some time back that caused the Mississippi to flow backwards for a while. It changed the entire landscape of everthing. When things flowed forward again, nothing was the same.
Economics can be seen as a kind of fluid/hydraulics dynamic sort of thing. Margin calls are backwards flows, defaults, foreclosures and sales at reduced prices.
Or maybe like a fire, backdraft.
Just thinking out loud.
MsCreant, remember the Mississippi River flowed northbound during the New Madrid earthquake of 1811.
That's the one Miles!
"We'll soon find out whether an organism the size of the United States can run an economy based on one family selling the contents of its garage to the family next door. "
Jim Kunstler
Can anyone spell "deflation".. Honey, I'm home.
Color me skeptical but that letter looks very photoshopped to me.
Defaulting on your debt, as a strategy, is basically playing a game that ends up with two scenarios..... one is that by the time "they" catch up with you and try to collect the system will be so full of the same type of people that it will be overwhelmed and can't process legitimate payments thus rendering any FICO score irrelevant or....... they actually do pull this whole shitpile together and keep some semblance of order by continuing the extend and pretend scheme going....your credit is still ruined however even with bullet-proof credit NOW it is becoming impossible to get a simple LOC even with many times more in the bank.
I so want give all of these pricks the finger and default on everything...I'm real close.....I'm sure I am not the only one that feels this way.
MS
Join us. Strength in numbers.
Do it. You'll feel better in the morning.
I am Chumbawamba.
I feel better already!
MS:
You are not the only one that feels that way. I have some friends not in the world of finance who are saying almost verbatim what you just posted. They've never defaulted on anything in their lives but feel that the system is broken, the middle class is being made to suffer yet again and are all for a jubilee. I don't know if that is even possible but they seem to think it is.
Geez what a stoop am I !
Paid off the plastic, paid off the cars and didn't buy new, have one joint cc account for emergencies and an Amex for travel only (which gets paid off in full when the reimbursement comes in) and everything else cash and debit plastic.
Could have gone strategic default but a with a mortgage under 1K on a small house in an ordinary neighborhood I'd be crazy to do so. We've got four foreclosures on our block and one just rented for about 1500.
The way to win the game today is to live as far below your means as possible - make thrift a fun game. And use what you save to load up on what's important - food, weapons, ammunition. Oh,and weapons training for the Better Half.
Don't forget gold and specie (negotiable silver coinage).
Because you will need it when Barry O collapses everything.
It seems Uncle SAM is ready to take our Tab too....lets go shopping and max credit cards....anyways we will get such deals for payment...without impairing our credit ratings...
Nice...
first of all, the government bailout will be repaid in most cases, so the notion that you scofflaws can withhold payment as retribution for your tax $$ going to bail-out is a fallacy.
Secondly, without all the facts it is irresponsible to post this letter and speculate. I see lots of you replying with your own anecdotes from other banks. If this guy was totally charged off already and most of the balance is finance charge, then maybe this makes sense.
Finally, citi was destroyed by Sandy Weill and the idiots at Travelers and Primerica who took over many senior management positions at Citibank in the late 90s. Those of us who know and have watched Citicorp and Citibank for generations as it grew into a world-class bank, with branches around the world, can only shake our heads in shame now at the ruins that remain. John Reed would never have let this happen - the Citibank we remember would have worked through this disaster as Chase and US Bank and others have done - damaged but still strong, and butressed by its international franchise.
Your missing the bailout point. The banks are insolvent and are kept alive with tax dollars. If they were healthy they would not need to charge 29.99% apr to make themselves solvent. Tax payers should have let them fail and saved a ton in finance charges. As I see it if our congressmen will not force the issue and take these banks down, it is every tax paying american's duty to default and get rid of these zombies. If we don't they will suck us all dry and pay back the bailout money with extracted finance charges from us. Think about it, if these banks were sound and solvent and able to borrow money at 0% wouldn't an average APR of 15% be really profitable.
Sadly, you just dont understand.
You want to talk about strategic default, I know a guy who had perfect credit, never missed a payment in his life. He recently moved to Singapore and has no plans of ever returning to the US. Before he left he simultaneously maxed out all of his credit cards using convenience checks, over $200K total. He called it a tax rebate.
Hes a DEADBEAT
Waldo
that is just ridiculous and shameful.
Doesn't it depend on who he did it to? Our owners on Wall Street don't seem to think twice about doing worse to us. Maybe he looked at Citi and channeled Robespierre, which is most understandable.
I disagree over your logic, but that's besides the point.
The point is that the act of willfully maxing out credit cards and then fleeing the country to avoid repayment of the debt is inexcusable and dishonest behavior.
So embezzelment is "strategic pay enhancement". Bank robbery is "strategic withdrawal"?
What would you call taxpayer robbery? Perhaps "American Recovery and Reinvestment Act"? "TARP"? Funny, I don't see anyone from Goldman Sachs in jail.
I know a ton of people that have done exactly that (for years now!) coming from India legally, work a couple of years, get a few credit cards, max them all out and then book it back to India. They end up keeping some of it with them and give the rest to the family here that sponsored them in the first place.
With the housing boom, I saw it happen first hand but with houses and home credit lines rather than credit cards; it was just easier to get money that way then waiting for credit cards and a lot more money available!
The facts you describe are blatant fraud. And recently the US Govt seems more interested in prosecuting small fry like the guy you describe than the really big crooks, so that guy should worry. And personally I'd rather be in a US prison than a Singapore prison, though both are really bad options.
What a bunch of pansies and ninnies. The guy didn't commit a crime in Singapore, so unless he gets indicted in the US over UNSECURED CREDIT CARD DEBT (i.e. nigh impossible) then the only thing he'll have to worry about is a bunch of collections agents calling him if he ever sets foot in the US. Scary.
I am Chumbawamba.
The facts you describe are a textbook example of fraud by maxing out the cards with no intention to pay. He would have committed a crime in the US. I haven't looked up Singapore's laws but given that they're a former british colony and perhaps the most "law and order" society on earth, I'm going to guess they have an extradition treaty with the US. Any prosecutor who feels like going after the "guy" (if he exists) will have little to no trouble getting him extradited back here. Also, depending on Singapore's laws he may well be in violation of a "proceeds of criminal conduct" or similar law on their books, which would be a serious felony (equivalent) and expose him to hard time in Singapore as well.
I have zero sympathy for the banksters, but two wrongs don't make a right.
Eh, who cares. Two wrongs don't make a right, but once you get into the billions and trillions then apparently it does. Just ask Goldman.
You're making a big deal over nothing. No one will ever go after this guy. The court costs and legal fees will render any judgement in the bank's favor a loss.
No need to worry. Default at will.
I am Chumbawamba.
This whole comment thread is making me sick. Is this what America is? Ripping people off and bragging about it?
You're angry at the unethical behavior of others, and therefore the response is for you to be unethical too?
Maybe you guys are going to get the societal collapse you're so clearly longing for. And you won't even realize what a huge part you played in causing it. If things really did go downhill, you'd be the guys holding up your neighbors at gunpoint.
There are people on this thread talking about running up CC bills in the hundreds of thousands of dollars. Living the high life and buying things they can't afford for years and years and years. They say they're going to "strategically default" and people here are cheering them like heros.
People are saying "why do I play by the rules?". I feel that way somewhat about the banks. But it's nothing comparied to how much I feel that way about spoiled unethical peices of shit like you guys.
chet,
Your my hero! You just go keep supporting this unethical fake paper ponzi system that robs savers and fixed income people like my grandma, widows, orphans, and single mothers. Youre right its all of us Dirt Bags that want an end to this tyranical financial system that are the problem. I mean where are our ethics where are our morals?
I just cant wrap my mind around you Paper Ponzi Zombies!
chet, wake up! Get some honest money (Gold) while you still can! The system is over!
Don't forget that you aren't hearing what the oligarchs feel about us serfs. We can surmise it's a lot worse than what is posted on this board.
If there is a collapse, it'll either be from the insanity of the people at the top, or because those oligarchs want it, not because 20% of the population refuses to pay off their $10K in CC debts, which is jump change in the coming bankruptcy of the US.
Skrew the inbred oligarch squid boys and their FED masters!
And it doesnt take 20% of the population. It takes less then 5% to take physical possession of Gold for the fake COMEX to go broke, thus breaking their fake world monitary wonderland to peices!
Be a man and stand up to the tyrany!
GET GOLD!
Lost my job on Monday, currently on my waiting week for my whopping $275 maximum weekly unemployment benefits. (I'm collecting solely to add to the statistics ;)) I have an 800+ FICO and about $400K in untapped available credit. (No debt outstanding other than a not quite upside-down mortgage on my primary residence) If I were single I wouldn't hesitate to max out that credit buying physical gold and silver, but my wife already thinks I'm barking mad for spending all my money on grains, guns, and ammo. Like always I think it's all about the timing and mine has always been horrid. Do I start burning up this credit as fast as I can, before they start cutting it and hitting me with fees just for having it? Or do I just hunker down and consider myself lucky to be relatively stable and well prepped at this point. (Wife is still working fortunately.) What do you kids think?
Tom Joad,
I would never say you need to check with a bankruptcy lawyer now and plan it, to ask the hypothetical "what if?" If someone was going to run that card up they would need to do it soon for a different reason than what is being bantered about here. One cannot use the card for a year before one goes BK is my understanding, they won't discharge that amount, it is fraud. The strategy would be to put the residence in the wife's name so they can't get it. These are the rules in my state, may be different in another. But if one were to do this, hypothetically, one would charge it up, make some payments, and then wait.
Of course Tom, you will get another job soon, so you would never need to do a thing like I am describing.
Can you pay off the mortgage with your credit cards? Swap secured for unsecured debt...
I did just this. They gave me enough to pay off my student loan at 1.9% (it was 9%) then I paid that off and they raised my limit and I paid off the house for 2.9% and 3.5% between 2 cards (That one had been 5.35%). They probably are not doing deals like that any more but it would be wise to see what could happen.
If you were a Simmons, you would legally divorce your wife and leave her with all your assets, and then fucking plunder your credit cards, and then declare bankruptcy.
http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?pagewanted=all
You don't need anyone to tell you what you already know. Use those cards to buy yourself gold, silver, guns, ammo, seeds, supplies, etc. Get ready for the Great Default.
Debtors Revolt!
I am Chumbawamba.
Chumbawamba is right. As much as you Paper Ponzi Tards just cant grasp what is happening, it is happening none the less. And the process is speeding up. Get some Gold while there is still some to be gotten.
Hunker down ...you could lose your wife. Sell the house and rent $1000/month
On second thought, don't hunker down
This is what you just asked Tom:
"I just lost my job. Should I go run up a ton of credit card debt?"
You know the answer to that. If you take your advice from some anonymous person online named "Chumbawumba" you'll deserve the destitution, divorce and misery that will inevitably follow.
As opposed to the non-advice of an anonymous guy named "Chet"?
I am Chumbawamba.
chet's a big man folks, he thinks all his paper wealth is going to protect him from the Great Default!
Sorry chet, you better get with the program soon or youre going to be out in the cold wishing you had Chumba's Guns and Gold!
Wake up Paper Ponzi Slaves the Great Default has begun!
Got Gold Sucka!
What citi should offer is a bullet if the deadbeat doesn't pay 100%. Bring back debtor's prison, bankruptcy is a joke. Think about the banksters behind bars!
Go fuck yourself, Vikram.
I am Chumbawamba.
Debtors Prison for not paying back electronic paper that the banks create out of thin air! You need to go study fractional reserve banking, dude! Sadly you will go extinct with this system as it evolves into the paper currency collapse stage. All paper money systems fail because at the end of the cycle so many people are getting ripped off by the money printers. Read your history books. They always go back to Gold.
Got Gold Sucka!
It's a good idea to put together a stash of antibiotics and other normally doctor supplied medical items. also some over the counter stuff. most of it has a long shelf life. just sayin, if you want to make a safe investment, you can't go wrong. if you don't need it , good for you, but someone you run across will.
Two year supply of Cipro and acidophilus! Oh yeah, Im ready!
FWIW - Denninger thinks the credit system might be about to lock up again...
http://market-ticker.denninger.net/archives/1539-Possible-Credit-Disloca...
My brother in law just sold his house via short sale. They had a first mortgage for 376K and a second with CITI at 125K. CITI settled with him for 6 freaking K on that loan. This was in the last month.
BofA told me after 210 days they write off the debt by law. Remember, when you charge a credit card the money is created with your signature. They did not use their money to pay for your purchase. They created it and paid the store and the balance was zero. Then the bank charges you principal and interest. Hell of a deal for them. If you talk to them on the phone and agree to pay anything on the card you have just entered into a verbal contract. Now your unsecured debt you signed up for with just your signature (takes 2 signatures for a contract) is wrapped around your neck and they can sue and win. Be careful and don't agree to anything. The guy who is paying the $130 a month is now under contract. What a stupid fuck, they can get him now. Ask them not to call and respond only in writing by certified mail. Collections have no standing since you have no agreement with them. Don't ignore them, make them prove their standing. They can't and will go away.
Better check your facts. Writing off debt is not the same as giving up rights to collect it. Most banks write off or more acurately they charge it off which means it is no longer a performing assest. It does still have value and if you have assests or a job they can sue you. They also can sell your acct for say 10 or 15 cents on the dollar and the collection agency that buys it can sue you for the original value of the charge off. Say you owed BofA 10k, they sell it for 1K to a 3rd party, the 3rd party sues you and garnishes your wages or liens your property and forces the sale of your home or they do all 3. There is nothing stopping the 3rd party collecion agency from extracting the whole 10k from you. Or you could get lucky and settle out for 25 cents on the dollar.
Fractional reserve banking is a concept that applies to the whole banking system. Each individual bank still has to have the reserves to be able to lend you money. So the bank really is transfering money to the merchant where you spent it, they are not creating this money out of thin air.
Verbal contracts with a credit card collector don't mean a thing. You signed the contract when you opened the credit card. The "stupid fuck" who is now paying $130 a month is trying to salvage his credit and the bank is preventing his account from charging off, so the balance remains a performing asset.
Check your facts. You don't truly understand FRB. However, that's the least of your problems. Keep playing by the rules the bankers have laid out for you, knave.
I am Chumbawamba.
it won't take long for their computer to inform them you are unemployed. (goodbye large line of credit) they may end up clipping your credit, because of their fiscal irresponsibility.
It just struck me that I am asking for life advice from the Zero Hedge comments section. Suddenly this snippet came to mind...
"Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity..."
You are in freefall. Divorce is like that too. Everything is surreal. Their is a weird kind of freedom in it. Anything is possible even though it looks like everything just got shut down. Anon comments are safe because of the distance we have from you, yet close enough because of our shared perspective.
Decide who you are. You are not your job. You are not your income. The people you associate with will change. Have a cry or a beer, what ever you need. Talkin on Zero Hedge is okay too. We are all in this shit together. The difference is, some folks don't even know they are in shit. ZH knows. Fight Club knows.
Peace, or Rage, or whatever you want. This one life is yours.
Well said.
Excellent words MsCreant.
Start running, I do triathlons since march 666
Running is an apt metaphor for deadbeats.
Dear Citi:
Your TARP account is delinquent. Due to the status of your account, we are willing to settle your account for 53% of the current balance, which is $45 billion. The settlement amount is $24 billion. We must have this settlement amount paid in full no later than 11/01/2009 or this offer will not be valid.
Sincerely,
American Taxpayer
+1
Advice anyone? Seriously, I don't want a flippant answer. I have never defaulted and want to avoid bankruptcy.
I've been on a payment plan with Citi for the last year - 0% interest and a fixed monthly payment. I still owe about $17,000. I called a few weeks ago to ask about continuing the payment plan at 0% interest for another year and they told me I have to wait until Dec, when the payment year is over, to renegotiate.
What would you do?
Do what I did. Tell them to shove it. Fuck the payment plan - if I were you I would be trying to milk the cards as much as possible before defaulting on them. Hell, if you buy Gold and Silver with it you can even pay 'em back in full a few years down the line (if you are so inclined i.e.). Give them a taste of their own "theft-via-inflation" medicine.
You have a few options. I would guess that you had defualted (missed 1 or more payments) in the past in order to get a 12 month 0% payment plan. In most cases these payment plans are temporary, beleive it or not the If you truely can not afford to make payments on 17K with say a 20 to 30% APR then you will need to let the account go past due in order to qualify for a payment arrangement. My credit card company allows 3 short term payment plans in the life time of an account. They also alow 1 paydown which is your balance divided by 60 months at zero percent or 9.9%. In order to take advantage of the paydown you need a financial hardship that will last more than 12 months. Let the bank know that other credit card companies have given you this deal and you shouldn't have a problem getting this payment plan. If the bank will not give this to you, you may want to check with a non profit consumer credit counselor, check several out 1st and with the BBB before choosing one. They can get you 9.9% paydown over 60 months and there is no once in a life time limit though them. So if you had a paydown once with a bank and the arrangement broke due to a missed payment you can pursue this arrangement through the credit counselor and the banks will accept these multiple times.
If you have a lump sum and want to attempt to settle your account then you need to let the account go 4 to 6 months past due. Most credit card companies have guidelines for settling accounts. Say at 4 months past due you can call and get a 55% settlement or at 6 months past due you can get a 40% settlement with the phone agent. You also need a good reason for them to settle, like trying to prevent bankruptcy, having 2 or 3 other unsecured credit lines 90 plus days past due, etc. Also they will need a 1 time source of funds, like liquidated assets, 401k or family loan. A paycheck or being temporarily out of work will disqaulify you for a settlement if you are requesting. Blind settlement letters like the example above are pretty typical for a high risk 3 or 4 month delinquent account with no contact with the card holder. Even those settlement letter offers are negotiable. Remember you are rolling the dice, some credit card companies will charge off your account after 4 or 5 months past due, and all companies will charge off your account after 6 months. So you may want to prevent the charge off and only have a settlement on your credit report. If you don't really care then you can let if charge off and then probably settle it our for around 25% with the credit cards pre-litigation department or with the 3rd party collection agency that will buy your account for 10 or 15 cents on the dollar.
As another Anon posted on a different thread, there are some issues currently with credit card companies proving standing to sue you as they have sold the account through securitization. I am not sure about this stategy as you may want to check with an attorney first.
Finally, if you are insolvent you may want to check into Bankruptcy.
Seems complicated. Defaulting is so much easier, and so much wiser in the long run. Don't believe me? Wait until 2011 when the Greater Depression really gets going. Your credit score will be the least of your concerns, if it is one at all.
I am Chumbawamba.
Greater Depression, Ha!
Its Global Perestroika starting FALL 2009!
http://en.wikipedia.org/wiki/Perestroika
Wait until December and ask for a principal reduction or you'll be forced to stop making payments. Bottom line, though, is that as long as you are able to make the payments they have no incentive to make any deals with you. And if like many you couldn't come up with a lump sum if you had to in order to make a settlement I'd say the choice is more difficult - by being on a payment plan your credit is already dinged pretty hard (buy a one time 3 report credit report and see what they say about you), and it's questionable as to whether you can be worse off by simply defaulting. Risk is they sell the loan to some unscrupulous collectors who start phoning your neighbors to ask where you are and and why they can't get hold of you.
Tough call, with leaning towards living with the plan for now if you can afford it.
First thing to remember is that none of the creditors have any emotions tied up in their decision making process. Bankruptcy is no biggie, it just the personal stigma you attach to what you perceive as failure. However you can avoid the courts by just dragging out the conversation with the banks and cc companies.
There is NO stigma attached to hard times. Shit happens so do what is best for you and your family to reduce to remove the debt by hard bargaining. Just like all business people involved in a protracted debt discussion. Play hard ball, they will and they don;t care if your standard of living is destroyed trying to do the "right" thing. The banks and their collectors don't care They have a list of people they call every day when they got to work and you are just a number to call.
The banks lobbied to change the bankruptcy laws so that it was impossible for an average person to discharge their debts. Individuals cannot go directly into chapter 7, they must now by law, enter into a Chapter 13 payoff plan. The game is rigged against the individual from beginningning, they can raise the interest rate anytime they chose, cut off you line of credit even if your current, the game is fixed.
Oh, for all you who are shocked that people can run up huge cc balances, most small business are funded by cc. The bankers made it hard for small bussess owners to get access to "reasonable" lines of credit, they prefered cc debt over convetional loans or lines of credit. Higher potental profits, even with the standard 50% failure rate, since the cc card debt passes from the business to the individual, who cannot file a 7. The banks created this structure, so let them eat cake.
I have to assume Marla has not lived long enough experience hard times, but as Tim Leary would say Unfuck her.
Begin liquidating any assets, even when it hurts a lot. Sell items on ebay, Craigslist. Get out of anything you are upside down in. Never purchase anything new. Buy everything used. Wait to purchase if you must. Build more core skills in your self i.e. iron own shirts, do own laundry, cook own meals. Economize everywhere possible.
Trim expenditures, increase means however you can. Sell off prior acquisitions even if you must take a loss.
Get used to humility and enduring a simpler lifestyle.
It is much better than fear of debt, creditors, unknowns.
Yeah, that's smart, add more choas and insecurity to your life dealing with eBay and PayPal policies, not to mention idiot eBay buyers/sellers and the cavalcade of morons you can expect to contact you whenever you post something for sale to craigslist. That will certainly fix this person's problem.
On the other hand, default is painless and effortless. You simply make the decision one day, and then you go on living. Air becomes much easier to breath, and the warmth of the Sun takes on a new meaning. It is your new found freedom. Not freedom from debts, per se, but freedom from fear and loathing.
The only thing you have to fear is fear itself.
I am Chumbawamba.