Would you lose eBay account if default on PayPal balance?

Cougar1978

A friend in coin club has heavy cc debt, forced early retirement at age 65 in 2015 as result of Houston Oil Price Crash (his dept eliminated) and age bias in job market. A debt relief company want him include PayPal on a debt relief program. He would have to pay them to accumulate a fund to settle with creditors. I don’t like this even though the payments about 50 pct lower but no idea how will shake out. He could pay most if not all by liquidating his coins and a major portion of his savings. The co advised him decouple pp smart connect from his PayPal acct and not make any payments to them. How is that even possible. Would PayPal then block transfers to his bank acct for eBay sales. Something here sounds fishy. He would pay the debt settlement co over a period of 4 yrs payments totaling $20k the cc debt total is 27k. Their selling point is this is a federal program.

I feel he should liquidate all the coins he can to get mo pmts down to manageable level (without gutting most of IRA savings) so pension and social security can handle it, see a credit card attorney, and possibly default on one large acct hope shakeout to 25-50 pct settlement on dollar. Statute limitations in Texas is 4yr. He planned to work another 3 yr but Oil Price Crash and age bias (he has had a couple crap jobs, hostile work environments since they went few mo at most) has destroyed his career. He said I just need one of them go a $&@ year! He has suffered considerable depression but tries to keep drinking to 4-6 weeks a week. The coin market not performing has aggravated this. His wife has told him “you better hold on to savings what if u get cancer?” Pray your post retirement not like this. He does have a lot of money in the equity of his 95 pct paid off $225 k house which would more than pay this but his wife won’t consent to reverse mortgage.

Broadstruck

I don't think eBay and Paypal are connected any more, as I recall reading somewhere eBay was looking to use a new payment service soon?

291fifth

I hate to think of how much in interest charges he is running up on the credit cards. This is an unfortunate situation. The coin collection should probably be the first thing to go in order to reduce his debt. So far as eBay and PayPal go I have no idea. The age bias problem has been around for quite some time and is very real. I'm surprised it doesn't get more press.

Cougar1978

Yes ageism is rampant and they have all kind dirty tricks dodge age bias complaints.

blitzdude

No idea regarding ebay / paypal but will say not a good idea at all to be charging up a coin collection on credit cards. To me seems like ebay account should be the least of your friends worries. I do hope for the best.

BillDugan1959

"Losing" a stupid eBay account is the very very very least of your friend's worries.

I'm not saying that it is terribly moral, but in the northern states, you would file some form of bankruptcy and probably be able to borrow new money (like for an automobile) almost immediately. Your IRA used to be untouchable in this BK process, but I no longer know all the fine points. Texas is likely less loose than most places.

In the late nineteen eighties, it seemed like half the dealers at any reasonable-sized coin show had filed bankruptcies or done some kind of extensive debt restructuring with their lenders. That was one of the effects of the super-high interest rates under former FRB Chairman Paul Volcker.

daltex

@Cougar1978 said:
A friend in coin club has heavy cc debt, forced early retirement at age 65 in 2015 as result of Houston Oil Price Crash (his dept eliminated) and age bias in job market. A debt relief company want him include PayPal on a debt relief program. He would have to pay them to accumulate a fund to settle with creditors. I don’t like this even though the payments about 50 pct lower but no idea how will shake out. He could pay most if not all by liquidating his coins and a major portion of his savings. The co advised him decouple pp smart connect from his PayPal acct and not make any payments to them. How is that even possible. Would PayPal then block transfers to his bank acct for eBay sales. Something here sounds fishy. He would pay the debt settlement co over a period of 4 yrs payments totaling $20k the cc debt total is 27k. Their selling point is this is a federal program.

I feel he should liquidate all the coins he can to get mo pmts down to manageable level (without gutting most of IRA savings) so pension and social security can handle it, see a credit card attorney, and possibly default on one large acct hope shakeout to 25-50 pct settlement on dollar. Statute limitations in Texas is 4yr. He planned to work another 3 yr but Oil Price Crash and age bias (he has had a couple crap jobs, hostile work environments since they went few mo at most) has destroyed his career. He said I just need one of them go a $&@ year! He has suffered considerable depression but tries to keep drinking to 4-6 weeks a week. The coin market not performing has aggravated this. His wife has told him “you better hold on to savings what if u get cancer?” Pray your post retirement not like this. He does have a lot of money in the equity of his 95 pct paid off $225 k house which would more than pay this but his wife won’t consent to reverse mortgage.

Run. Don't walk. He can likely negotiate a better settlement with his various creditors than the company can or will, and not have to pay their fees besides. In any event, he's going to receive a 1099-C for any debt forgiveness. Before declaring bankruptcy, he really needs to know what he'd be allowed to keep, but I'll bet large sums of money he won't be able to keep his coin collection. Bankruptcy is state specific, so don't listen to any of us on the details of what Texas law is.

Smudge

Coin purchases are for spare money. Coins should never be bought on credit. Hobby, not investment. May be time to sell his coins.

Timbuk3

Sell the coins to reduce his debt. Everything else he has is to sustain his family and himself !!!

JBK

He needs to step back and review things one at a time. As mentioned, he can negotiate reductions himself - the "federal program" line is just the settlement company trying to boost their image, but he can in theory do this on his own.

Not sure of your PayPal question
Does not make total sense as stated. He can unlink PayPal from his bank account, and of course that will stop transfers to bank account if he sells on ebay. Unless he has a PayPal credit card I don't understand where PayPal is involved.

If he keeps running into "hostile work envirinments" in "crap jobs" then he might need to reexamine his own attitude on the job.

Best of luck to him. That debt is a huge burden but not insurnountable.

jmlanzaf

@daltex said:

@Cougar1978 said:

Run. Don't walk. He can likely negotiate a better settlement with his various creditors than the company can or will, and not have to pay their fees besides. In any event, he's going to receive a 1099-C for any debt forgiveness. Before declaring bankruptcy, he really needs to know what he'd be allowed to keep, but I'll bet large sums of money he won't be able to keep his coin collection. Bankruptcy is state specific, so don't listen to any of us on the details of what Texas law is.

He has more than enough assets to pay off the credit cards. Ruining his credit and paying fees to a debt firm is ridiculous. Sell the coins and/or take out a home equity loan on the house and just pay off the credit cards.

astrorat

Sad situation, but all the details muddy the original question.

If eBay shuts down his account, he likely will be able to open another eBay account. Hasn't there been a lot of scammers reported on this Board who have had eBay accounts close and yet they later appear with another account?

jmlanzaf

@astrorat said:
Sad situation, but all the details muddy the original question.

If eBay shuts down his account, he likely will be able to open another eBay account. Hasn't there been a lot of scammers reported on this Board who have had eBay accounts close and yet they later appear with another account?

This is true, but not that simple. You can open a new eBay account with a new email address. But if his PayPal account is axed, he will need new banking/credit credentials as well.

tommy44

Sell the coins, raise all the cash you can, pay as much as you can and negotiate the rest if necessary. Bankruptcy should be the last resort. Cut up the credit cards or put them in a zip lock full of water and freeze them if you can't cut them up. This is a sad situation and his age doesn't help matters but as Judge Judy says, "if you eat the steak you should pay the bill".

jt88

Don’t worry about negative PayPal balance. Every time someone file a claim I have negative PayPal balance. Once eBay make the decision they will charge to your credit card for the refund.

JBK

@Cougar1978 said:

He has suffered considerable depression but tries to keep drinking to 4-6 weeks a week.

Not to pile on the guy but this is not helping at all. His depression is very understandable, but alcohol is a depressant so he is only feeding the beast.

Not sure if you meant that he drinks 4-6 times a week, but if that is the case, aside from the health and sanity issues, if he is drinking at a bar then his annual bar tab would go a long way to paying off some of his debt.

Sounds like he needs a good friend or two to lean on and give him advice and support. You seem to be filling part of that role which is fantastic.

In my own experience, at times like this it is critical to separate the issues at hand and not conflate them, make positive steps no matter how small, and look forward instead of backward.

Broadstruck

As long as he isn't selling on eBay and has a automatic billing for his invoices set up as payment via PayPal and defaults he shouldn't loose his account.

Edthelorax

I thought credit cards were unsecured debt. I was under the impression that meant that if he quit paying them, there really isn't much they could do except ruin his credit score. If his house is almost paid for, and he has assets and income, then couldn't he tell the card companies to restructure or face default?

jmlanzaf

@Edthelorax said:
I thought credit cards were unsecured debt. I was under the impression that meant that if he quit paying them, there really isn't much they could do except ruin his credit score. If his house is almost paid for, and he has assets and income, then couldn't he tell the card companies to restructure or face default?

https://www.thebalance.com/what-will-happen-if-i-stop-paying-my-credit-card-960284

jmlanzaf

@Edthelorax said:
I thought credit cards were unsecured debt. I was under the impression that meant that if he quit paying them, there really isn't much they could do except ruin his credit score. If his house is almost paid for, and he has assets and income, then couldn't he tell the card companies to restructure or face default?

https://www.natlbankruptcy.com/credit-card-lawsuits/

cameonut2011

He should not do this, and he will hurt himself if he does. Even "legitimate" debt relief programs should be illegal as they are predatory in nature. The programs usually advise people to stop making payments to creditors for a few months to entice them to settle. In the process, they ruin your credit. They have no ability to bind your creditors. They make small payments which usually toll the statute of limitations, kicking the can down the road. Even while you make your plan payments, the creditors will continue to report you delinquent on your credit report and will likely charge off the debt. Worst of all, you will likely receive 1099-C forms in the mail and may need to pay federal income tax on the defaulted debt. The companies collect exorbitant fees for "services" that you don't need and that only hurt you. The companies don't really do anything you couldn't do yourself. If you default, most credit card companies would settle for 50% or less of the total balance. In many cases, he could settle for 25% or so.

In this case, he would be better served by selling the coins and attempting a settlement of his own. If that doesn't work, then he needs to investigate the possibility of a bankruptcy. If he has significant savings that cannot be exempted then he would lose it. Fortunately for him, Texas has the most liberal homestead exemption in the country and IRAs are usually exempt with very high value caps at the federal level. State law may even be more generous. A chapter 13 plan if he qualifies- even if he was forced to repay all of his creditors 100%- would bind his creditors and effectively allow him to pay no interest and no worry about owing the IRS anything. It could also allow him to restructure secured debt over three to five years and give him potential tools like cram downs, lien stripping, and other things that may also be of use. If he has non-exempt assets, he may be able to keep those as well if he pays the fair market value of the items into his plan or redeems in a liquidation proceeding. Tell your friend NOT TO DO ANYTHING until he speaks with a lawyer who can evaluate his case.

SamByrd

cameo offered the best advice by far in this thread.