Hi guys,
I was un-employed for a while, (8 months) and I got behind on my credit card payments. I informed them that I didn't have a job and I couldn't pay them but they didn't want to hear it. (I don't blame them a bit.) What can they do if I don't pay them or just pay what I can and not the minimum payment.

 

Paying anything is better than nothing. Send them $5 a month. It will show that you made an attempt at payment, and a reduced payment doesn't reflect as bad on your credit as non-payment.

 

They can default all your interest rates. Usually to 25-30 percent rate. If you dont pay for six months or more they can send yout account to collection.

 

Once you get your feet back up under you - you can make an "Offer in Compromise" that doesn't include the interest or service charges.

If you show them that you are willing to settle the account, they will be willing to work with you.

The alternative is to lose it all, or have you declare "BANKRUPTCY".

In which case, they recieve NOTHING.

 

That, and you end up screwing yourself for 7 years minimum.

 

my parents had baddd.... credit card debt, we had like 8 creditcards and just aboutt everyone of them was maxed out, we acutlly pulled our selves out , but it was so hard, but it would have been easier to go bankrupt,

 

I don't know exactly what resources are available to you in your area, but I am sure there has to be some non profit consumer credit organizations. Contact them, they can be of great help with credit problems, without bankruptcy. They will renegotiate interest rates and payment schedules with your creditors. You do need to be careful with which one you use, as some are not as non profit as others, and will charge some hefty fees. We have Colorado Consumer Credit here which has helped a few of my friends get things straightened out. Look in the Yellow Pages under "Credit and Debt Counceling". Again, be very cautious with these as some are for profit companies, and not non-profit.

Good Luck.

 

Bankruptcy is not a good solution if you can help it... my parents are a bit on the crazy side sometimes and were considering it, but when they realized that certain accounts, they CAN do something about to get money from you, plus it is not a good idea to try to say... co-sign the first year of your kids' student loans after this has happened, or to try to get another mortgage... well, they reconsidered. They're waiting on my brother and I to start our careers full-time and take care of them..

 

Sometimes bad things happen to good people ....
Not fair, but they do....
and sometimes it takes extreme measures to recover from it....

right now, the possibilty of bad credit for 7 years is NOT the end of the world... and from personal experience years ago when the same thing happened to me...
you actually CAN get auto loans and such....

The most important thing for you to do is chill,
re-think your priorities, and focus on them...

find some kind of support...
i know, I know, harder to look for THE job when you got a job, but at least keep yourself active and talking to people - that was my issue... got angry and hibernated - thank goodness for only a little while and then an old associate I worked with overseas offered me a position that was a short term contract, but got me going...

Good Luck !!!

 

Don't pay those people they are rip offs. I have 8 cards I have quit paying on. All they do is call call call. I bought a phone recorder and I just don't answer and I turned it down. Credit cards are non-secure debt. That means they are taking a chance on you. Call a bankruptcy lawyer, they will give free advice. They will tell you. They can't touch you or your house or your bank. I have gone bankrupt before it is nothing. I always own a new car and just bought a 200,000 dollar home at 4.75% There are banks out there that look to give credit to people who have bad credit.

 

my brother buried himself 2 years ago and filed bankruptcy and now he has an excellent car loan and credit cards with really low interest rates and high spending levels. his credit counselor said bankruptcy is so common now that although you have a black mark on your record for 7 years that the look at is as a fresh start and as long as you establish good credit from then on you are not going to miss out on much.

 

Well Traveler2, I greatly sympathize. Been there (unemployed). I hope you can work it out, sounds like you want to. Good on you.

Some good advice above. And some with no integrity at all. Your call.

 

Hello again,
Thanks for all the advice guys. The fact of the matter is I want to pay the credit card people. Heck, it's my debt. I used the card. I don't want to rip anyone off. At the time I needed the card to survive. I just can't pay the amount that they want me to pay. And whatever I pay it seems the interest overcomes it. So the debt never gets any smaller.
Thanks again anyway.

 

If you have decent credit and are dealing from a strenght, call the credit card companies up and inquire about a rate reduction. It has always worked for me. Granted I have excellent credit and my cards have super low rates (5 & 6%). A phone call never hurts. Tell them you are going to transfer the balance to a lower rate card. Usually they will ask you the rate you are thinking about transfering to and they will match it.

 

How about a post with a sensible plan of action?

* making partial payments doesn't help- the balance due that remains is rolled over as a late. The credit report's been trashed already, and will continue to be. Better to save the cash that's not going out in payments.
* if you stop paying, most lenders- after a period of time and umpteen phone calls, will offer to settle. Usually the settlement offer will be for a lower amount, or at a lower rate, or both. Offer to take the settlement (if you can), as long as they agree to report your account as current/paid as agreed, as long as you comply to the settlement terms. Get this in writing! For that matter, any contact your have with your lenders, or collection agencies as the case may be, should be in writing. Be prepared to get a 1099 if part of the debt is forgiven.
* consider your present financial situation- in particular your assets. If you own a home or have other attachable assets, your chances of getting sued increase. If the lender gets a judgement, that unsecured debt can quickly change to secured. Under no circumstances do you want a lender to get a judgement against you- that lasts on credit reports far longer than the other bad stuff.

The advice about re-focusing and establishing priorities was excellent. You will get through this.