As you’ve learned from my previous tale of w(owes),
I was living off credit cards and student loans and
was not able to pay them back.

Many not-so-pleasant things can happen to you
if you don’t pay your credit card and student loans.

Here’s what happened to me…

I started getting letters from my student loan lenders telling me
to pay the loans in full. At the time I was underemployed
and barely paying the rent and buying food.

When I ignored the letters, I start getting more letters.
At first the letters had a kind of friendly tone.

In case you’ve forgotten or didn’t receive the last letter…

When I didn’t respond to those letters, the tone started
getting stronger…
Warning: You are late with your payment…

When I didn’t respond to those letters,
they started threatening me…
We will take legal action…

Then, one day a letter comes saying - This is your FINAL notice.

I thought “Good, Final Notice” -
At least I won’t have to hear from them anymore”

- WRONG! -

More letters keep coming.
I ignored these letters for a very long time.
I was like an ostrich sticking my head in the sand
thinking the creditors won’t see me and go away.

And then one day the letter comes telling me…

We’re keeping your State Income Tax Refund Money.
Damn!… I was counting on that money to pay the rent.

Oh well. I’ll survive. Let me just get on with my life.
Time passes, I forget about it. Life is still good.

Then one I go to the bank to withdraw some cash
out of the ATM machine.

“Sorry, that transaction is not available at this time”.
“Stupid ATM machines” I think.

I call customer service to complain and give them a piece of my mind.
Instead, I’m informed that there is a “Freeze” on my account.

A “freeze” on your account is like a banking “Black Hole”.
NOTHING can escape.

You can put money in, but Nothing comes out…
You can’t withdraw money… Like an ice cube - It’s “Frozen”.
The account is now dead, I can’t use it and the money
in the account stays frozen until the matter is cleared up.

Or so I thought…

What happens next is what I call a “Bankers Loophole“.
The automatic deductions that I had previously set up and
which had worked fine for a long time, no longer go through
or get paid because the money is frozen.

So, what does the bank do?

They charge me with a $30 insufficient fund charge…
Even though the money is in the account.

And this happens not just once…
…each occurance. So everytime a creditor tried to get
their money out, the bank slaps me with a $30 penalty.

“But the money is in the account” I protest to the banker.
“Not anymore, deadbeat” is what the banker was
probably thinking.

What the banker actually said is that I have to take the
matter up with the company that froze the account.

“But I don’t even know who froze the account”.
I get no help.

Meanwhile, the bank is happy to keep charging me
$30 everytime an auto debit attempts -

So, I leap into action to stop the bank from robbing me
anymore and close the account.

Only problem is that I CAN’T close the account…
Because the account is frozen.

So, I can’t withdraw money, I can’t close the account,
my creditors can’t get paid and then the Banker’s Loophole
kicks in because the bank CAN collect their penalty money…

And that’s not the end of it! Oh no…

Until I figured out how to stop the autodebits, the bank
kept charging me…
Until they sucked all the money out of my account.

I had money in the account, the bank took ALL OF IT
and kept charging me. Citibank - You Suck!
And now all of a sudden, I owe the bank money!

And my creditors, which are NOT getting paid, kept trying
to get money from the account and started slamming me
with $30 late fees, which brough the account over the limit.

So now I’m being charged $30 late fees AND $30 over limit fees.

Because of this, I can’t pay the creditors anymore and
they start calling me on the phone with some “friendly” reminders
that I still owe them money and when can they expect payment?

And it doesn’t stop there… No, No, No…
It keeps getting worse.

My account is frozen, my credit cards are not getting paid and
are over the limit, so the credit card companies start reporting me
to the credit bureaus - Late Payments and Over Limit.

All right I think - “Screw Citibank - Screw MasterCard and Visa”.
I’ll just use cash.
And so I did.
Next Time - “The worse is yet to come”.

TAGS: bankers loophole, Citibank, Income Tax, insufficient fund, MasterCard, over the limit, penalty, student loan, Visa, warning

This entry was posted on Tuesday, December 26th, 2006 at 8:06 pm and is filed under Student Loans, Credit Card Debt. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.