You Can't Make This Stuff Up: Credit Down The Toilet? You Are Not Alone

What can we qualify for in this tanking economy? Precious little.

For more than twenty years, my husband and I had decent credit with credit scores in the 650-700 range. His was better than mine but that’s because he never spent much money and when he did, it was cash. All right, I'll concede that he was financially smarter and much more frugal than I, winner of the Mrs. Consumer and Mrs. Philanthropist of the Century Awards. Hey! I was contributing to the economy, springing for lunch, contributing to every charity whose cause made me cry, and making home improvements, because, well because I could. I had a good job and so did my husband. We had as much as $200,000 equity in our home. Today, we don’t qualify for much of anything.

Then came the Fall, literally, of 2007. A number of factors were working in concert against us, including our optimism and faith in the promises and proposals of campaigning politicians; serious declines in the housing market; a major job loss (and with it, health insurance and other bennies); exorbitant attorney fees for fighting a no-win legal battle against the too-big-to-fail corporation that I worked for; an aging and ailing parent 5,000 miles away from where we lived; a second job loss coinciding with a move across country to care for that parent; recurring age discrimination (but hard to prove) by potential employers, and yes, some plain old bad financial decisions such as buying a home while retaining our old house, fully expecting we could rent it forever and make a profit when we sold it. Really bad. Really stupid. It was not a matter of WHEN we sold; it was IF we could sell it at all.

It took a year and a half and thousands of dollars to UNLOAD the home we left behind and it was vacant for more than six months before we did. Outgo greater than income equals guess what? We couldn’t even qualify for an equity loan.

Ah, well, we said, you can’t look back. Now that we’re out from under that albatross, let’s move forward. Easier said than done. Just when we thought it was safe to go back in the water, we started drowning in record time. After my husband finally landed a job in California and we moved my Mom to California from the East Coast to live out her final days with us, the second too-big-to-fail company had my husband lay off all of his workers and then they let him go as a final coup de grace. He qualified for $900 a month in Social Security benefits. Whoopee! Our mortgage is $2300.

Okay, so now what? We had zero income, dwindling savings, more debt than we could count and the bill collectors started calling, from 8:00 AM to 9:00 PM like clockwork, one after another, every thirty minutes. Under California law, they can do this ad infinitum. They just put your number on automatic dial and the machine does all the work.

Then, my Mom died. Her insurance policy was barely enough to give her a proper funeral. We now try to survive on Social Security and unemployment with freelance gigs few and far between. So, the answer is “NO.” No, we don’t have $5,000 to settle for 65% on the dollar. No, we can’t make a payment of $300 a month. No, we will not send you a post-dated check. No, we don’t have a relative we can borrow $10,000 from. No, we don’t qualify for a loan modification because even though our mortgage is waaayyyy upside down, our bank doesn’t consider SS and unemployment as real income and even if they did, our debt-to-income ratio is totally out of whack. And no, we have no prospects for work because companies are not actively seeking older workers unless they are engineers, lawyers, architects, IT specialists, health professionals or NASA biophysicists. We don’t qualify.

Still, they keep calling. The toll-free numbers change but the collectors remain the same. They’ve even resorted to using a local area code to do a “gotcha,” hoping we’ll pick up because it may just be a friend or neighbor calling from a number we don’t recognize.

Here’s the rub. Over the past six months, these folks have probably spent more time, effort and money chasing down folks like us on a fixed income of approximately $2,600 a month than the actual amount of money owed to them. They are trying to get blood out of a turnip. I tell them what we can afford to pay but it’s not enough. It’s always a different person from the same company and he or she never has any idea of the dozens of others from the same agency that we’ve already talked to. So I explain our situation again, and again, and again. We’ve downsized our lifestyle including the monthly cost of phone service. Since we no longer have a land line, every time I answer their calls on our cell phone, they get to hear the same tired story at our expense. Switch to a plan with rollover minutes? We can’t sfford the penalty from our cell phone provider.

If we ain’t got it, we ain’t got it. I suggest they focus their efforts on some deadbeat who has the money and just refuses to pay. Maybe they’re having trouble collecting from little people like us because commoners hate large banks who already siphoned off $7,000 per taxpayer when the government bailed them out. Maybe it’s because they are paying out billions in bonuses which explains why they can’t afford to extend us a reasonable payment plan that includes an interest rate reduction and a hold on fees. In an effort to outsmart the upcoming Phase II of the Credit Card Act in February, or sooner, they have increased rates and lowered limits on cards we haven’t used in a year. To rub salt in the wound, they lower the limit immediately after we make a large payment.

I remind them that we are in our sixties and we’ll probably be dead before they can collect the whole enchilada. That’s fine, they say. We’ll take it out of your estate. Are they crazy? What estate?

The next thing you know, they’ll be lobbying for a bill to revive debtor’s prison. Hmm, at least we might get three squares a day. I wonder if we’ll qualify.

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