Do I.T. Yourself

Yes, I am a credit card defaulter.

Now that THAT’s out of the way I would like to share with you what I have learned while researching how I could best pay off my debts.

First note: I am a defaulter NOT a defrauder. Those are two very different things.

A Defaulter is someone who, for one reason or another, is not at the moment capable of paying his credit card debt.

A Defrauder, on the other hand, is someone who used false information to acquire the credit card in the first place. This is what happened in Singapore recently when several people from a credit card sales company were arrested for falsifying employment details of several clients just so their applications for credit cards would be approved by the issuing banks.

I am a defaulter. I had used my credit card, when it was active, to buy groceries to feed my family and pay household utility bills. I didn’t even use the cash advance facility, because my issuing bank had not enabled it for my account. I was settling my bills back then, every payday via online banking, because our payroll bank was also my CC issuing bank. I could pay direct from online access.

Then Typhoon Ondoy struck. And from then on I had been unable to make payments on the card. Too many repairs on the house, too many furniture rendered useless and needed replacement. I had maxed out my card and had to use cash on hand for purchases.

I am writing this now because a law firm has contacted me by mail, and is now demanding that I pay an amount that is more than three times my card’s credit limit, and to pay thirty percent of that amount within the next five days to avoid litigation. When I contacted the law firm to confirm and negotiate I was told that the payment was necessary before they could send me the restructuring agreement. In the meantime I had to come up with several thousand pesos to give to them.

While I was pondering how on earth I was to manage that when I was currently jobless and sending one child to college, I recalled a conversation I had with a friend recently. He had mentioned that people in the legal department of any company usually had a difficult time getting a credit card, and that was mainly because credit card issuers know that these people knew their rights.

And what are OUR RIGHTS, as credit card holders now unable to make payment for one reason or another?

I looked this up in Google — something I should have done long ago — and I found these two blogs:

Clickmarbin, in his blog post How to Deal with Credit Card Debt Collectors in The Philippines? has made be breathe easier by informing me of my rights as a credit card defaulter. In addition to that, he has also written this: A Credit Card Debt Collector in The Philippines Can Tell A Lie.

Further reading revealed another source, Mr. Banker, in his blog post Utang – What I’d Do!. This is one of many very informative and down-to-earth advice for credit card defaulters, in his blog DISKARTE (Guidelines on Credit Cards Paranoia).

These two bloggers have helped me sleep better after I read their articles, knowing that I am EMPOWERED TO PAY MY DEBTS, but in a manner in which I can afford.

Here is an excerpt from Mr. Banker’s blog:

1. Ask for a Statement of Account

This is the FIRST step. You mean you will just accept ANY amount just because of their say so?…. okay, I give up then. go ahead, pay.
Otherwise, you cannot go to Step 2 without resolving this issue first.

2.Once received, review.
Is it duly signed and certified correct by an authorized bank signatory?
You would not want a janitor signing your SOA, would you?

3.Offer what you can afford ONLY,not what they want.
You are the one responsible for its payment,not them.
propose reductions or waivers.
(especially those excessive charges!)

4.If there’s an Agreement,document it!
no verbal agreement. they can deny it later on.

5 If they won’t agree, don’t force yourself to pay even if you cannot afford.
it will just dig you deeper further into debts.

6.Since no agreement can be made,let the court to decide.
(definitely, the court will reduce it!)

So now, you have your reason everytime they call.
How can they collect when you are still asking for that SOA?
How can they charge you with RA 8484(Intention to Defraud)?
How can they file a case when you are willing to settle it?

Learn from your lessons after that. Avoid making the credit card as your financial crutches.

Perhaps the most important advice is the last line. Contrary to what some readers may think, Clickmarbin and Mr. Banker are not advocating non-payment. What they are advocating is CREDIT CARD DEBT PAYMENT within one’s means.

I may be a defaulter, but I am by no means a defrauder. My credit card issuer has my complete contact details, and so does the collection agency. I answer my phone calls personally and I do reply to text messages and calls when I am able to do so.

No credit card collector has the right to bully me into paying an exorbitant amount to “settle” my debt. No credit card collector has the right to coerce me into paying by sending threatening text messages, or pretending to be sheriffs who can come into my house take away my property in payment for my debt. I am not hiding, they know where to find me. I am willing to pay, but within my means.

I hope whoever reads this and happens to be on the same boat as I am will visit the other blogs that I have linked to above, and know that we do have our rights and that we should uphold them.