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Brookwood loans at 96% interest. How to get out of it?

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I very stupidly got into some post Chapter 7 BK debt. My BK was filed in April 2006 and discharged in July 2008. So I should have been free and clear with a fresh start, right? I don't know how I did it, but obviously I was living beyond my means. I was scammed out of 2,200 in an advance loan fee scam, but that only explains about 10% of my total post BK debt, which is about 25K. I know, how the hell did you do that? Really, really dumb. I'm not into gambling or any kind of substance abuse, I just made some really bad decisions in the last couple years.

I actually solved most of my PDL problems and the credit cards are conolidated with Town & Country, so that's not really that bad. The really ugly part is the following:

1. Brookwood loans @ 96% interest. $2600 loan taken out in May, and I haven't made a payment yet. The payments are $238 per month and the balanced has ballooned to almost $3200 and is growing exponentially. The original term was 24 months. T & C has been unable to help with this at all.

2. Think Cash - $2100 balance on a 96% installment loan with payments of $96.21 due every two weeks - that's over $195/month. I haven't made a payment since May. T & C has been unable to help with this as well.

3. Cash Call - 20 more monthly payments of $217, 96% interest. Payoff balance is about $2100. I was barely over 30 dyas past due and they threatened to take me to arbitration ( I failed to opt out of the arbitrtion clause within the first 60 days of the loan, so they can/could do that). I am current on this, but only because i made a payment in July and they brought me current because they were about to take me to arbitration. T & C could not help.

4. loans. I have two of them.

One has about a $3500 balance with monthly payments of $179, but I'm three months past due. The second has about a $4400 balance, $204/month, and am over 3 months behind. They have 27% and 36% interest rates respectively. I feel very badly about these, because they were individual lenders (regular people who pool their money to lend). The first one I was doing pretty well on for the first 12 months. I was on time for one year. But then everything craashed at once about April/May when I really started having problems. The second one I was only about 6 months into a 36 month loan. Both loans are over 3 years.

I only take home about $2100/month, and simply cannot afford these payments, together with the credit cards, etc. Obviously, I can't file BK 2 years after a ch 7. T & C cannot help with the above loans. They can only help with credit cards and payday loans (getting the interest rates reduced, re-aging, etc.). It's the above loans that have had to take a back seat the last three months while I got the credit card and PDL situation straightened out, along with a few bounced checks. So now I'm in deep doo doo with the above loans and not sure what I'm going to do.

I'm wondering if I should try debt settlement with someone like Superior debt relief. I don't know if they can help with the above lenders. Or, should I contact my BK attorney and see if he can help with post BK debt in trying to avoid law suits and holding these people at bay - maybe even negotiate lower rates, buy some time, lower the payments, re-age?? But I don't know if BK attorneys are the best people to handle debt negotiation/settlement? This guy is a sole practitioner.

Any help/advice would be welcomed.

Sorry to hear that Goldhelmet. Yes, debt settlement can be an option to you at this juncture. But shop around before selecting a specific debt settlement company.

Please look at the following aspects while selecting a settlement company: -
1. Look at what BBB says about it.
2. Get some market information about the company's reputation
3. Get the fees charge from each of the companies

You can also get free counseling from our community expert to solve your problems.

Sub: #1 posted on Thu, 08/28/2008 - 12:25

phoenix phoenix
(Posts: 1445 | Credits: 275.44)

Sorry to hear that you are having so many problems with this. I have read a little about all of the companies you listed except Brookwood loans. Think Cash and Cash Call are high end payday loan companies which may cause some debt settlement companies to shy away from them. Have you tried contact the individual companies to work on some type of payment plan?

I don't think the BK attorney would handle debt settlement or negotiation, but that could be a starting point. Maybe they can direct you in the right direction.
Your best bet is to start contacting the lenders now and inform them of your situation. Maybe they will be willing to work with you.

Sub: #2 posted on Thu, 08/28/2008 - 17:48

bdouble bdouble

(Posts: 354 | Credits: 56.74)

Think Cash and CC are not payday loans.

Sub: #3 posted on Thu, 08/28/2008 - 18:42

goldhelmet goldhelmet

(Posts: 96 | Credits: 26.42)

Those are all installment loans which are not pay day loans. Anyway they are all a horrible deal for you and will turn into a huge mess if you don't pay them off immediately. I see only 2 options. Either pay them off immediately or let them default. It is a horrible deal to continue to send them monthly payments especially if you are behind. If you are behind you won't even cover the fees and interest so nothing will be applied to principal. Personally if I didn't have the money for the payoff amount I would let them default. They will sue you and get a judgment. They will probably try to garnish. The thing is you can only be garnished at a max of 25% of your income which in your case is lower than the monthly payment on all of those combined. Also, once they sue the interest rate on the amount owed will be moved from the 98% rate to your state rate which is probably around 10% but you would have to check your state laws and they can not charge fees and penalties. They will wait at least 6 months and maybe longer before they sue because they want the balance to grow as large as possible via their outrageous fees and interest rate. One thing to note is if you ever want to own property in the state where the judgments reside, you will have to clear the judgment first. A bank will not loan money otherwise.

Sub: #4 posted on Thu, 08/28/2008 - 20:55

Moderators Cum Industry Expert
(Posts: 1078 | Credits: 137.97)

The 25% max they can garnish with a judgment, is that in total, or per creditor? I would assume it's in total. If creditor 1 gets a 25% garnishment, then creditor 2 is out of luck?

Sub: #5 posted on Fri, 08/29/2008 - 03:22

goldhelmet goldhelmet

(Posts: 96 | Credits: 26.42)

From my understanding 25% is max at one time, everything else has to get in line...I'm in the same exact boat right now, T & C is working for us with these lenders either. We are leaving t & C and right now we are trying to decide to use a settlement law firm or DIY. That's the hard part to decide. The law firm says they can help us avoid being sued and if we are sued they can help us avoid a garnishment, but how do we know that true? At any rate they can't guarntee that won't happen...Reny

Sub: #6 posted on Fri, 08/29/2008 - 03:48

lmale lmale

(Posts: 741 | Credits: 98.46)

25% is total but would also be up to the judge. There is deffintely some big negatives that come with judgments and charge offs though. Judgments last around 15 years so that would give them ample time to for each one to eventually garnish. Judgments also come first if you own property and are foreclosed on which means a bank will not loan you money to buy a house until a judgment is settled. The benefit though is you can be sure that the most all of the defaulted loans will get is 25% max which is quite a bit less than your monthly payment now. Also if you default and they sue then the 98% interest rate and fees and penalties go away. The remaining balance would be set to the state interest rate which varies from state to state but is far less than 98% and there is no penalties or fees. You could probably also bankrupt all the debt once your time period is up on your current bankruptcy. The creditor will let the balance balloon quite a bit before they sue though just to get it as high as they can. Thats why the best option is to pay them immediately if you have the cash but if you don't even have the cash to stay current then I think its best to default. The reason I think its best to default is because if you aren't making the minimum payment then the loan balance will grow faster via outrageous penalties and interest than whatever payment you made meaning you are just handing them money and getting zero benefit toward the principal balance. Then all you are doing is just extending the time it takes for them to charge off the loan. It is a bad situation financially no matter which route you take basically but I would probably go the default route given lack of funds.

Sub: #7 posted on Fri, 08/29/2008 - 18:47

Moderators Cum Industry Expert
(Posts: 1078 | Credits: 137.97)

Can you file BK on a judgement?

Sub: #8 posted on Fri, 08/29/2008 - 18:50

lmale lmale

(Posts: 741 | Credits: 98.46)

I believe you can bankrupt any debt including judgments with the exception of tax debt and student loan debt.

Sub: #9 posted on Fri, 08/29/2008 - 19:22

Moderators Cum Industry Expert
(Posts: 1078 | Credits: 137.97)

I have loans with the same companies that you do and It's been 2 years since I have filed bankruptcy also. I was just wondering what have you decided to do?

Sub: #10 posted on Tue, 09/16/2008 - 00:39


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