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Here is the message from my daughter:
After a month and half, I still never received the bill in full or a call letting me know that was not possible. I am finally on the phone with a manager at US Bank who is giving me the following instructions to be able to pay this off in full. Pay off US Bank Reserve lineThis pay off amount is good until July 31Total amount$6,951.70Write check to "US Bank"In memo portion of check, reference Acct # XXXXX Check should be made for $6,951.70The address to send check to:Attention: US Bank Reserve Line PaymentPO Box 790288St. Louis, MO 63179Manager contact at US Bank who has service and access to this account and we can call her directly to check status once check is mailed and make sure we get this closed out.DanitaXXX-XXX-XXXXAlexia, I telephone Danita four hours ago and left a voice message. She has not returned my call. If she does, can Itry to negotiate with her? What do I do?
She didn't intentionally borrow any money. This is a debt that occurred from overdraft fees with an interest rate of 35% over a period of ten years.
She did not agree to any interest rate. When she signed up for her first bank account ten years ago she inadvertently signed up for overdraft protection. She didn't understand that it became a quickly escalating debt because of the 35% interest rate.
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Under lastly, how do we find out if the statue of limitations has run out? She had been paying up until recently when the balance disappeared from her statement.
We took your advice and my husband and I spent two hours on the phone being bounced around by US Bank. Our daughter gave us authorization to talk to them. Now they won't let us pay off half of her debt without her approval. Meanwhile, because she had asked them for a pay-off plan and we've been talking to them, she is about to go into default. The bank is threatening to ruin her credit even further, even it we pay off half of the debt.
Since she already has a bad credit rating, will our paying off half the debt make the credit rating much worse. If this were your daughter what would you do? We still cannot figure out how to solve the problem.
At the moment, we're learning toward now getting her to authorize our paying half the debt and having her credit made worse, so that she is a bit closer to paying it off. However now that she is suddenly in default her the interest on the debt has raised to 35%. So her monthly payment will be even harder to make than it was before. For ten years she has been paying this debt which has taken a quarter of her salary, now it will take over a third of her salary. What's the solution here?
We took your advice I think you may be confusing my explanation of legal option provided by law with, perhaps, someone who gave you advice? I wasn't able to advise you or her, unfortunately, not knowing her file, the contract, etc.
and my husband and I spent two hours on the phone being bounced around by US Bank. Why did you decide to do that?
Our daughter gave us authorization to talk to them. Now they won't let us pay off half of her debt without her approval. That would make sense, since it is her legal contract, not yours, and paying off 1/2 does not negate the default she is in but does effect her rights, typically, as noted above.
Meanwhile, because she had asked them for a pay-off plan and we've been talking to them, she is about to go into default. You may want to speak to the lawyer that told you that. Asking for a potential pay off plan to consider entering into a settlement agree does not generally turn a non-defaulted contract into one that is defaulted upon. Maybe you misunderstood or, if your source of information is the potential plaintiff bank itself, perhaps the agent speaking on the banks behalf was seeking to scare her into paying up asap, with the threat of default. Default it when you don't pay according to agreement - it does not get caused by settlement negotiations.
The bank is threatening to ruin her credit even further, even it we pay off half of the debt. They can not ruin it further (at least not legally) - the can only make truthful statements to the credit bureaus. As such, they can not say she is defaulted if she is not defaulted. If they DID make false statements, she would potentially have a cause of action against them for defamation and violations of the FCRA (Fair Credit Reporting Act). Also, you mention ruin her credit even "further" - I think you are saying that she has, in fact, already defaulted. This means that every month she is not paid up according to contract, her credit report has a black mark for that particular month.
Since she already has a bad credit rating, will our paying off half the debt make the credit rating much worse. If her credit rating properly reflects her activities, paying of whatever amount, if she was near her statute of limitations, means that this is a new breach and that whatever they are reporting on this defaulted debt may likely continue to be reported for yet another 7 years.... That is why some financial experts suggest we think twice about restarting to pay if no payments or agreements to pay have occurred in many years (closer to 7 than to, say 1). But also remember, paying 1/2 does not make it "paid as agreed" unless she has a contract to that effect.
If this were your daughter what would you do? We still cannot figure out how to solve the problem. I noted what I would do above so I could get this in the black asap. If they were legally wrong, I'd sue them possibly. If not, because working 80 hours/week is not beneath me, when there is an important goal, me, my husband and my daughter would likely pick up extra work hours so we can come up with the pay off total sooner rather than later. I'd also consider, at the same time, using a different credit card to pay it off totally (so the default will become 'old' every month that goes by, as it will now be paid off), and stay on good track with the new credit card debt, so there is no bad paying debt on the credit report. I'd still pull the Over Time, as family, to help her. If 3 people work extra, that debt can likely be gone in 2,3,4 months.
At the moment, we're learning toward now getting her to authorize our paying half the debt and having her credit made worse, so that she is a bit closer to paying it off. Where did they get the idea that paying some would make her credit worse? I'm seeing no justification for that - again, unless she hasn't paid in a long time, which you have not clarified. (I'd also consider looking into a credit card with "0% interest for 12 months" - and pay it off within that time frame, at the very least. Usually you pay a fee for that privilege, like 3%...
However now that she is suddenly in default Suddenly? Are you saying she only JUST started not paying as agreed?
her the interest on the debt has raised to 35%. Oh, so I think you are saying it was a reasonable (??) rate before, perhaps, and the interest did not make it big, true borrowing (as noted above), made it high.
So her monthly payment will be even harder to make than it was before.Absolutely. Ergo, the overtime work for a few months, perhaps by all 3 of you.
For ten years she has been paying this debt which has taken a quarter of her salary, now it will take over a third of her salary. What's the solution here? That is her choice. She has options, as noted previously - it is whichever one she feels she has the energy or inclination to do. Do you see what I am saying?
Seven weeks ago she asked for a payoff plan because we wanted to help her. She kept calling and they kept saying ok, but it took until a week ago for her to get the amount and they gave her a cutoff date, which I told you about from the start. She only stopped paying when she asked them for the buy out.
Everyone we talk to gives us a different answer at US Bank, so as time goes by she is coming up to being two months behind.
She has $9,000 worth of other debts, one loan for $7,000 doesn't charge interest, so she has already started dealing with the debt. My husband and I are retired and unable to work. My daughter works a 14 hour job just to keep the job that she has, so having a second job wouldn't be possible. She also has two hours a day of commuting time.
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