Download Adobe PDF ReaderI am in debt. What are my options?
What if I don’t pay my credit card payments?
If you do not pay your credit card payments, after frequent calls from your credit card company,
as soon as 60 days after your missed payment your account can be charged off and sold to a
collection agency. After persistent attempts to collect, the collection agency will then file
a suit within the court system. Here you will have to reach some sort of agreement with the
collection agency for the amount you will pay, which now includes late fees, attorney fees, and
the collection agency’s fees. Once there is a judgment, the collection agency will be able to
obtain their judgment through liens, garnishment’s, etc.
What is settlement?
Settlement is when you reach an agreement with your creditor to pay an amount less than what is owed.
The problem is that your creditor frequently does NOT settle until you are late or never, which
then leaves settlement when your account goes to collection. Important to remember is that every
month that you are late waiting for your account to go into collection damages your credit score.
BEWARE of scams. There are plenty of settlement agencies promising the world to consumers in relationship to settlement of their debt. Typically, these settlement agencies, collect large upfront fees, wait for your account goes into collection (which may take months), and then attempts to settle-after your account has accrued interest, attorney fees, collection agency fees, and late fees, by this time it is likely that the amount you settle for the original amount of your debt due to the amount of fees.
If you choose to settle, you are highly encouraged to try to do it yourself. Doing it yourself, allows you to perhaps work with your creditor before you go into collections, avoid paying another agency high upfront fees, or a delay in your settlement if you account does go into collections. If you do it yourself, you should remember to always get EVERYTHING IN WRITING, all of the agreements between you and the creditor or collection agency should be in writing.